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2022 (8) TMI 789 - AT - Income TaxAddition on protective basis - addition has been confirmed on substantive basis in the hands of firm - assessee had introduced the capital in cash and received interest on partner’s capital and remuneration - addition of capital introduced by the firm in the hands of the firm and AO disallowed the interest and remuneration paid to the partners on substantive basis - HELD THAT:- It is imperative to mention that in the case of Jagannath Bawri and Others vs CIT and Others [1998 (8) TMI 83 - GAUHATI HIGH COURT] has explained the concept of protective assessment. We are of the view that protective assessments are a particular type of assessment that focuses on those assessments which is made to protect the interest of the Revenue. Although, there is no provision in the Income Tax Act authorizing the levy of income tax on a person other than whom income tax is payable but the object of the protective assessment is that in case substantive addition is made in the hands of other person and in case assessment fails then in that eventuality the Department must get the tax from the person in whose hands protective assessment is made or ultimately if substantive addition made is confirmed then in that eventuality protective addition cannot survive. Therefore, keeping in view the above proposition and also keeping in view the judgement discussed by us herein above , we are of the view that in the present facts and circumstances of the case, no loss is going to suffer by the assessee, in case, we uphold the order of the ld. CIT(A) in upholding the protective addition made by the AO in the hands of the assessee. In this view of the matter, the appeal of the assessee is dismissed.
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