TMI Blog1994 (7) TMI 46X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessee filed a return of income declaring Rs. 5,995 as income. During the course of the assessment proceedings, it was found by the Income-tax Officer that the assessee was not having any capital to start the business and the investment was made by her mother-in-law and it was the income of the assessee's husband. In these circumstances, a protective assessment was made in the hands of assessee and unexplained cash credits and other items of Rs. 13,080 were added. The Appellate Assistant Commissioner upheld the order of the Income-tax Officer, but, on appeal the Tribunal observed as under: " 2. We have heard the representatives of the parties at length in this appeal. Without expressing any opinion on the actual income earned by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me-tax Officer must have made up his mind, as to in whose hands, the income has actually to be assessed. The directions which were given were that the substantive assessment shall be made on the assessee along with the assessment of Shri Laxmi Chand who, according to the Department, really earned this income. Learned counsel for the petitioner were not able to find as to what is the correct position now. An income which has been earned can be taxed in the hands of an assessee, who is liable to pay the tax. Protective assessments are also permissible, but they cannot continue to infinity. The observation of the Income-tax Appellate Tribunal was only to this effect that substantive assessment has to be made by the Department, and when the inc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rection to make a substantive assessment on the assessee along with the assessment of Shri Laxmi Chand, who according to the Department really earned the income. The observation of the Income-tax Appellate Tribunal could only mean that there could be one substantive assessment, either in the hands of the assessee or in the hands of Laxmi Chand, and because much time has already lapsed, the Department must have made up its mind. The object of making the protective assessment is that the assessment is also made in the hands of some other person, and if such other person objects to the assessment, or finally it is held that it is not liable for payment of tax on such income, then the Department must get the tax from the person in whose hands t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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