TMI Blog2014 (2) TMI 804X X X X Extracts X X X X X X X X Extracts X X X X ..... ial basis- it is always advisable to adjudicate both the issues simultaneously. The CIT(A) has committed an error in confirming the addition in the hands of the assessee on substantive basis without examining the finality of the same income in the hands of the firm where department has assessed the same amount on substantive basis - No material has been brought on record to show that whether the said substantial assessment made in the hands of the firm has attained finality – thus, the matter remitted back to the AO for re-examination – Decided in favour of Assessee. - ITA No.1659/Mum/2011 - - - Dated:- 1-1-2014 - Shri I. P. Bansal And Shri D. Karunakara Rao, AM,JJ. For the Petitioner : Mr. Pramod Kumar Parida Ms. Sanjukta Cho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Balance Sheet of the firm. Therefore, mere lending of name should not convert the real active owner as a passive owner and vice versa. 2. Levy of Penal Interest The Appellant, on merits, denies her liability to penal interest. 3. The impugned assessment is order dated 28-12-2007, passed under Section 144 read with Section 147 of the Act. It was noticed by the AO that the assessee has received a sum of Rs.20,25,000/-, which was with regard to cancellation of a flat in Basant at Kandivali, which was not shown in the return of income. The assessee was required to submit the explanation. The explanation of the assessee is reproduced in the assessment order. According to the submission of the assessee, the said flat was booked by a firm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... expenditure claimed in the P L A/c for the year relevant to the A.Y. 2000-01 has been ascertained to have been inflated by the assessee firm to the extent of Rs.1,98,68,047/- and the same has been disallowed. Since the said inflation of expenditure is considered to have resulted in unaccounted income to find its application in such unaccounted assets, no separate addition has been made on account of investment in Flat as stated by Mrs. Usha Sharma. On receipt of such letter from AO, learned CIT(A) has converted the assessment of the assessee from protective to substantial with the following observations :- 2.2 I have gone through the contents of the impugned assessment order as well as arguments submissions of the Ld. AR of the ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed to the firm and all these facts were submitted before the AO, who after verification of the same, had assessed the assessee on protective basis. It was further submitted that learned CIT(A) without appreciating the facts has converted the protective assessment to substantial assessment in the hands of the assessee. He also submitted that since the addition has been made in the hands of the firm on substantive basis, the addition in the hands of the assessee should be cancelled. 7. On the other hand, relying upon the order passed by the CIT(A), it was submitted by the learned DR that learned CIT(A) has rightly held that the said amount is assessable in the hands of the assessee on substantive basis. 8. We have heard both the parties a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 250000 State Bank of Mysore Total 2025000 29. However, assessee firm could not substantiate the same. In the absence of any other details, and in the absence of any response from the assessee on this issue, the same has been considered to be the income of the assessee from unexplained sources and accordingly the entire amount of Rs.20,25,000/- has been added to the total income of the assessee. 9. From the above extract of the assessment order of the firm, it is clear that the substantial addition has been made in the hands of the firm. The same amount cannot be assessed in the hands of the assessee on substantial basis. There is no material on record by which it can be said that there was ..... X X X X Extracts X X X X X X X X Extracts X X X X
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