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TMI Blog2001 (4) TMI 167X X X X Extracts X X X X X X X X Extracts X X X X ..... e the CIT(A) against the order of the Assessing Officer, dated 28-8-1998, passed under section 158BC read with section 143(3) of the IT Act, 1961, for the block period 1987-88 to 1997-98 upto the date of search on 20-2-1997. In other words, the previous years relevant to the block period relate to the financial years 1986-87 to 1995-96 and a part of the financial year 1997-98 from 1-4-1996 to 20-2-1997. 2. Before coming to the specific grounds of appeal, it is necessary for us to put in brief the relevant facts of the case which have given rise to the disputes now raised before us. The assessee belongs to a business family engaged in textile business in Pallipalyam, Erode district of Tamilnadu. The assessee filed a return of income for the assessment year 1995-96 on 4-12-1996 declaring total income of Rs.4,56,200 and agricultural income of Rs.7,35,600. In the statement of total income filed with the return, a foot note has been given as under: "During the year the assessee has received NRI(E) Gifts amounting to Rs.1,51,28,998, the details of which viz., Donor, Bank remittances, details, etc., are enclosed. These gifts are exempt under section 5(1)(iib) of the Gift-tax Act. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... year 1995-96 was pending as on the date of search. He also was of the opinion that assessment under section 158BC had to be made in view of the search action under section 132 for the block period ending with the date of search. The regular assessment under section 143(3) was getting time barred by 31-3-1998. On the other hand, the block assessment under section 158BC was getting time barred only by February, 1999. As stated earlier, the regular assessment under section 143(3) was finalised on 31-3-1998 and the assessment under section 158BC for the block period was finalised by an order passed on 28-8-1998. In both the assessments, the Assessing Officer brought to tax inter alia, an amount of Rs.1,51,28,998, which he held as unexplained or undisclosed income in the hands of the late Sri. A.S. Sengoda Gounder. In other words, the assessee's theory of having received gifts from NRIs was disbelieved and it was treated as undisclosed income of the assessee for the purposes of assessment, both under section 143(3) and under section 158BC. While doing so, the Assessing Officer treated the regular assessment under section 143(3) as a protective assessment because at the relevant time th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ds, what has been brought to tax in the block assessment is nothing but what has already been assessed in the regular assessment under section 143(3) in respect of the same assessee and in respect of the same assessment year. The Assessing Officer has considered the regular assessment under section 143(3) as protective in nature whereas the block assessment has been treated by him as substantive assessment. The learned CIT(A) deleted the additions made in the regular assessment and considered that these additions are warranted only in the block assessment. 9. The case laws so far reported on protective assessments indicate that the department is not precluded from making protective assessment when there is a doubt regarding the assessability of the income either with respect to the assessment year or with respect to the identity of the assessee concerned. In other words, two parallel assessments, one protective and the other substantive, are justified when there is a doubt as to the exact assessment year to which the income relates in the case of the same assessee or when there is a doubt as regards the identity of the assessee to whom such income belongs. However, the case befo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ra. 12. In view of the above finding, we hold that the CIT(A) erred in law in deleting the addition made by the Assessing Officer in the regular assessment made under section 143(3). In reaching this conclusion, we have taken into account the fact that in the initial statement made during the course of survey under section 133A, at the business premises of the assessee on 8-10-1996, Shri A.S. Sengoda Gounder in answer to question No. 11 agreed to pay the tax on the income of Rs.6,94,89,000. Even though the plea of having received the NRI gifts from various persons was made at that time, the assessee was not able to substantiate this plea and the Assessing Officer, therefore, was well justified in disbelieving the genuineness of the gifts and treating them as unexplained income. In this view of the matter, we uphold the order of the Assessing officer framed under section 143(3) by reversing the order of the CIT(A) to the effect that these disputed items of income have to be considered only in the block assessment under Chapter XIVB. 13. In the result, the Departmental appeal is allowed for the asst. year 1995-96 in the case of late A.S. Sengoda Gounder. I.T. (SS) A. 17/Bang ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Tax already paid Nil ------------------ Balance payable Rs. 1,13,10,876 ------------------ ---------------------------------------------------------------------------------- 15. From the above, it is clear that what has been subject to tax in the block assessment is nothing but the NRI gifts of Rs.1,51,28,998 and the expenses by way of commission for arranging such gifts and also excess agricultural income treated as undisclosed income. As regards NRI gifts, we have also upheld the validity of the regular assessment wherein the same addition of Rs.1,51,28,998 has been made for the asst. year 1995-96 while disposing of the departmental appeal discussed supra. In the circumstances, for the very same reasoning, we have to hold that the addition in respect of the same item in another proceeding for the same assessment year amounts to double taxation and is, therefore, liable to be cancelled. 16. As regards expenses by way of commission relating to NRI ..... X X X X Extracts X X X X X X X X Extracts X X X X
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