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TMI Blog2021 (7) TMI 1005X X X X Extracts X X X X X X X X Extracts X X X X ..... the hands of the different persons/assessee and the AO is not sure enough about such person in whose hands the income is chargeable to tax. Where the legal ownership of the income is under suspicion, the AO can resort to make the addition in the hands of 2 persons or more than 2 persons on the basis of protective and substantive basis. But the demand of tax is not enforceable in the case of protective assessment until and unless it changes its shape by becoming substantive assessment. The concept of protective assessment also becomes important in a situation where the addition on substantive basis is deleted and in such an event, protective assessment shall change its colour by becoming substantive assessment. Had there not been such ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion of the Assessing Officer in holding that Appellant had opened Bank account with Dena Bank, Harij and deposited his own cash of ₹ 77,01,600/- even though the Appellant has clearly stated in his statement recorded u7s.!31 of the Act by the A.O. that the said account has been operated by four persons namely Smt. Jyotsanaben Sureshkumar Thakkar, Shri Rakeshkumar Sureshkumar Thakkar, Sunil Sureshkumar Thakkar and Shri Sureshkumar Nathalal Thakkar without his knowledge and the said cash deposits therein belongs to them. 3. The Learned Commisisoner of Income Tax (Appeals) has erred in not considering the fact that the amounts in cash deposited by the above stated four persons in the saving account of Appellant with Dena Bank, Harij ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r the assessment framed on protective base in the case of the assessee is sustainable in the eyes of law. Accordingly, a question was raised to the learned AR and the DR. 4. The ld. AR submitted that there cannot a valid protective assessment without having a substantive assessment. Therefore, the impugned assessment should be quashed. 5. However, the DR contended that the absence of substantive assessment cannot lead to draw an inference that the assessment framed on protective basis is not sustainable in the eyes of law. As per the learned DR once there was no substantive assessment in the case of other assessee, then the protective assessment will take the colour of substantive assessment. Therefore, such protective assessment is v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rsons on the basis of protective and substantive basis. But the demand of tax is not enforceable in the case of protective assessment until and unless it changes its shape by becoming substantive assessment. 6.2 The concept of protective assessment also becomes important in a situation where the addition on substantive basis is deleted and in such an event, protective assessment shall change its colour by becoming substantive assessment. Had there not been such protective assessment, then assessment with respect to such person (protective assessment) would have become barred by time. 6.3 From the above discussion, it is inferred that an assessment can be considered protective only when there is substantive assessment. Thus the substan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in his bank account which was subsequently transferred to the parties as discussed above through the mode of banking channel. Such amount of cash deposit was treated as unexplained investment in the hands of the assessee under the provisions of section 69 of the Act and therefore the same was added to the total income of the assessee on protective basis. 6.5 However, the AO was conscious while framing the assessment of the assessee about the fact that the substantive assessment has to be framed in the name of the persons as discussed above. The relevant observations of the AO as recorded in his order with respect to the substantive assessment reads as under: Sustantive addition is to be made on the same issue in the cases of 1) Shri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that matter that of assessment order passed under section 158BD in the case of the HUF were made on protective basis. All parallel additions were made in the case of R individually. The assessment made under section 158BC in the case of R did not survive at all, since it had been struck down being timebarred. The additions made on substantive basis had not been decided by deleting the same from assessee s individual hands rather they were thrown along with the block assessment order, meaning thereby, there was no substantive addition in existence at all; and the protective addition presupposed the existence of substantive additions. In another words whenever additions were made, they were only substantive additions. The term protective ..... X X X X Extracts X X X X X X X X Extracts X X X X
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