2017 (8) TMI 720 - AT - Income Tax

Revision u/s 263 - addition on protective basis - amount already been assessed in the hands of Estate of Late Mr. Vrajlal C. Mehta - Held that - The amount which has been shown in the order of 263 of the Act has already been assessed in the hands of Late Shri. V.C. Mehta. Since, this amount has already been assessed in the hands of late Shri V.C. Mehta therefore, the same is not required to be assessed on protective basis in the hands of the Smt. Devaunshi Anoop Mehta as well as in the hands of the assessee Anoop Vrajlal Mehta.

Summary

Issues:
1. Invocation of provisions of Section 263 by the Principal Commissioner of Income Tax.
2. Addition of a specific amount on a protective basis for the assessment year 2006-07.

Issue 1: Invocation of provisions of Section 263
The appeal was filed by the assessee against the order passed by the Commissioner of Income Tax relevant to the assessment year 2006-07. The Principal Commissioner invoked the provisions of Section 263 of the Income Tax Act, finding the assessment order to be erroneous and prejudicial to the interest of revenue. The assessee challenged this invocation, arguing that the amount in question had already been assessed and taxed in the hands of another individual for the same assessment year. The Tribunal referred to a related case where it was established that the amount had indeed been assessed in the hands of the other individual, leading to the conclusion that there was no need for reassessment. Consequently, the Tribunal set aside the order passed by the Principal Commissioner under Section 263, ruling in favor of the assessee.

Issue 2: Addition of a specific amount on a protective basis
The second ground raised by the assessee was related to the addition of a specific amount on a protective basis for the assessment year 2006-07. The Principal Commissioner directed the Assessing Officer to make this addition, despite the amount having already been assessed in the hands of another individual for the same assessment year. The assessee contended that the addition was unwarranted as the amount had been taxed in the hands of the Estate of Late Mr. Vrajlal C. Mehta. The Tribunal referred to a previous decision where it was established that the amount had been assessed in the hands of the late Mr. V.C. Mehta, thereby rendering the protective addition unnecessary. Consequently, the Tribunal allowed the appeal of the assessee, setting aside the order of the Principal Commissioner and ruling in favor of the assessee.

In conclusion, the Tribunal found in favor of the assessee on both issues, setting aside the orders passed by the Principal Commissioner under Section 263 and the addition made on a protective basis for the assessment year 2006-07. The appeal of the assessee was allowed, and the judgment was pronounced in favor of the assessee on 17.07.2017.