TMI Blog2015 (7) TMI 1394X X X X Extracts X X X X X X X X Extracts X X X X ..... 4/Kol/2012, ITA Nos.473-475/Kol/2011 - - - Dated:- 1-7-2015 - SHRI P.K.BANSAL, AM AND SHRI MAHAVIR SINGH, JM For the Assessee : Shri R.P.Agarwal, Sr.Advocate Shri K.K.Chhaparia, FCA For the Department : Shri Prabal Chowdhury, JCIT, Sr.DR. ORDER Per Shri Mahavir Singh, JM These appeals of the assessee and the Revenue are directed against separate orders of the CIT(A)-I, Kolkata in Appeal No.173-175/CIT(A)-I/Ward-3(2)/10-11 dated 20.12.2011 and Appeal Nos.509-511/CIT(A)-I/3(2)/09-10 dated 15.12.2010 respectively. Assessments were framed by I.T.O., Ward-3(2), Kolkata u/s 147/145(3) of the Income Tax Act, 1961 (hereinafter referred to as the act ) for A.Y. 2003- 04,2004-05 and 2008-09 vide its order dated 30.11.2010. 2. The first common issue in these appeals of assessee is against assumption of jurisdiction by AO u/s 147/145(3) or 143(3) of the Act for making protective addition despite the fact that there is no substantive addition. For this the assessee has raised common grounds in its appeals and the ground as raised in ITA NO.332/Kol/2012 for A.Y.2003-04 reads as under :- 1. For that in the facts and circumstances of the case, the Ld.A.O. erre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) vide para 5.1. of his appellate order which reads as under :- 5.1. The argument of the appellant is misplaced in view of the fact that addition has been made on the basis of information collected during the course of survey, enquiry and investigation made by the A.O. The protective addition was made in order to protect the interest of the revenue on the basis of the information received from the A.O. of the persons with whom the appellant has made transactions. Since the addition is protective and subject to outcome of assessment in the case of persons with whom appellant has made transactions, the appellant has no basis to be aggrieved. It amounts to the appellant s insistence to make the assessment on the basis of its own statement given without allowing for cross verification with the other persons transaction. In fact, the A.O. has resorted to protective addition only when the related persons did not corroborate to the statement given by the appellant on oath. In that case, the statement of the appellant on oath may require further probe. Thus, the addition of the A.O. on protective basis is held to be correct. Thus, the appellant fails to get relief on this issue. 4. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ings both against A and B. The Supreme Court, however, observed that in the proceedings taken against the one or the other, an exhaustive enquiry should be made and the question as to who is liable to pay the tax in question should be determined after hearing objections and that the proceedings against the other person may also continue and be concluded but until proceedings against the one has been finally determined, no assessment order should be passed. A final determination had, therefore, to be made in one of the proceedings. 25. The Tribunal thereafter opined that a Protective assessment is not confined to making assessment of same income in the hands of two different persons; but can also be made in the case of income of one person where the Assessing Officer is uncertain as to the year in which the income had been earned. The Tribunal thereafter held that protective assessment cannot be independent of substantive assessment but always has to be later in pint of time to the substantive assessment. Further he drew our attention to the findings of ITAT Mumbai Bench of this Tribunal in the case of M.P.Ramachandran vs DCIT (2009) 32 SOT 592 wherein it has held as under :- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ening assessment on the basis of an item of income or disallowance, which has already been made in block assessment of the assessee, thereby leaving no income escaping assessment. Under these circumstances we are satisfied that having made addition of ₹ 527.85 lakhs in the block assessment, the Assessing Officer was not justified in forming the belief, either on substantive or protective basis, that the same income has escaped assessment in the instant year. CIT VS. Wipro Finance Ltd. (2008) 10DTR (Kar) 281 relied on; 5. We have heard the rival contentions and gone through the facts and circumstances of the case. We find that the issue raised by the ld. Sr.Advocate has been answered by the Hon ble Supreme Court in the case of Lalji Haridas vs ITO [1961] 43 ITR 387 which reads as under :- The main argument which is urged by Mr.Nambiar in support of this appeal is that respondent No.1, the Income-tax Officer, who has issued the impugned notice, has no jurisdiction to assess the appellant for the income in question, because he contends that even according to respondent No.,1 the said proposed assessment would be in the nature of a precautionary or protective assessment, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by proper proceedings who is in fact responsible for the payment of tax, and that is all that is being done at the present stage. In cases where it appears to the income-tax authorities that certain income has been received during the relevant assessment year but it is not clear who has received that income and prima facie it appears that the income may have been received either by A or B or by both together, it would be open to the relevant income-tax authorities to determine the said question by taking appropriate proceedings both against A and B. That being so, we do not think that Mr.Nambiar would be justified in resisting the enquiry which is proposed to be held by respondent No.1 in pursuance of the impugned notice issued by him against the appellant. Under these circumstances we do not propose to deal with the point of law sought to be raised by Mr.Nambiar. We would, however, like to add one direction in fairness to the appellants. The proceedings taken against both the appellants should continue and should be dealt with expeditiously having regard to the fact that the matter is fairly old. In the proceedings taken against Lalji the Income-tax Officer should make an exha ..... X X X X Extracts X X X X X X X X Extracts X X X X
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