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2020 (2) TMI 734 - HC - Income TaxAllowable expenditure under Section 37(1) - protective demand based on the assessment of the person who paid the amount - HELD THAT:- The question of making protective demand based on the assessment of the person who paid the amount the petitioner appears to be incorrect as assessment cannot be made subject to outcome of collateral proceedings of another person. Assessment has to be completed based on the accounts of the petitioner. It cannot be left open ended as has been done in the case of the petitioner. Since the assessment procedure adopted by the assessing officer for the petitioner was not proper order and had left it open ended,it is of the view, it was also unsustainable and is therefore liable to be quashed. Therefore, the consequential orders passed by the respondents against the petitioner based on collateral proceedings in the case of M/s. Eastman Exports Global Clothing Private Limited are also liable to be quashed and the case should be remitted back to the Assessing Officer to pass a fresh order of assessment on merits in accordance with law taking note of the facts. The impugned recovery proceedings dated 03.02.2016 and 28.03.2016 are quashed and the case is remitted back to the concerned assessing officer to pass a fresh order of assessment on merits in accordance with law taking note of all the facts. The concerned Assessing Officer is therefore requested to pass a fresh assessment order for the Assessment Year 2010-11 in the case of the petitioner within a period of three months from the date of receipt a copy of this order.
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