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2020 (5) TMI 675 - AT - Income TaxValidity of the re-assessment proceedings - protective assessment done - assessee had not offered any capital gain to tax on 50% of right of land transferred to the developer and has offered capital gain to tax only for the flats sold during the relevant AY i.e. AY 2007-08 - HELD THAT:- AO has made the protective assessment in order to save the interest of the revenue if it fails before the higher forums. The Hon’ble Bombay High Court in the case of DHFL Venture Capital Fund [2013 (6) TMI 575 - BOMBAY HIGH COURT] has held that it would be impermissible for the AO to make protective assessment by reopening an assessment on the ground that a contingency may arise in future resulting in escapement of income. In this case also, the AO had reopened the assessment on the hypothesis that if the Tribunal were to grant relief to the assessee, it would escape assessment. Thus, it can be seen that an assessment completed u/s. 143(3) of the Act, cannot be reopened on a presumption that it may escape assessment in future, if the revenue failed in its litigation before the Hon’ble High Court. Thus, we are satisfied that the reassessment proceedings initiated and completed on protective basis are null and void. - Decided in favour of assessee.
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