TMI Blog2022 (11) TMI 316X X X X Extracts X X X X X X X X Extracts X X X X ..... (JCIT) ORDER PER: B.R. BASKARAN, AM The assessee has filed this appeal challenging the order dated 17-06- 2020 passed by Ld CIT(A)-1, Udaipur for assessment year 2010-11. The assessee is challenging the decision of Ld CIT(A) in upholding the validity of reassessment proceedings initiated by the AO u/s 147 of the Act and is also challenging the addition of Rs.3,30,000/- partially confirmed by Ld CIT(A). 2. This is the second round of appeal proceeding before the Tribunal. In the first round, the Tribunal, vide its order dated 28-11-2019 passed in ITA No.75/Jodh/2019, had restored the matter to the file of Ld CIT(A) in order to adjudicate the legal ground relating to validity of reassessment proceedings, since the Ld CIT(A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of income filed by Ms Garima Jain was selected for scrutiny, wherein the above said amount of Rs.16.00 lakhs was assessed in her hands on substantive basis . The assessing officer of Ms Garima Jain sent information to the assessing officers of other joint holders about the details of deposits of Rs.16.00 lakhs made in the joint SB account. 5. Accordingly, in order to protect the interests of revenue, the AO reopened the assessment of assessee herein, vide notice dated 09-12-2013 issued u/s 148 of the Act, for the purpose of making addition of Rs.16.00 lakhs on PROTECTIVE BASIS. In the reopened assessment, the AO made the addition of above said amount on protective basis in the assessment order passed on 30-03-2015. It is pertinent to n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... substantive basis should be made in the hands of assessee herein. The settled proposition of law is that the tax liability can be enforced against the person in whose hands the addition was made on substantive basis. The AO cannot enforce payment of tax liability in respect of addition made on protective basis. If the addition made on substantive basis is deleted, then the protective addition made in the hands of other assessee shall become addition on substantive basis and tax liability could be enforced. 8. In view of the above said legal proposition, the Ld CIT(A) should have decided the appeal of Ms Garima Jain first and should have given a definite finding as to the assessee in whose hands, the addition should be made. We notice tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ding. The reasons for reopening of assessment recorded by the AO are extracted below:- Assessment u/s 143(3) of the I.T. Act has been completed on 31/01/2013 in the case of Kumari Garima Jain and addition of Rs.16,00,000/- has been made as unexplained cash deposit in bank account. The assessment of Kri Garima Jain was completed u/s 143(3) in which she stated that the cash of Rs. 16,00,000/- was deposited in her bank account by her father Sh. Prakash ji her mother Smt. Bimla Devi, her sister Kumari Pranita and her brother Sh. Nikhil. The sash deposit of Rs. 16.00 lacs were added substantially in the income of the assessee. However, since the assessee denied the ownership of these cash deposits, the deposited in bank are to be assessee pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0 lakhs is assessable in the hands of the assessee or not and further, when he wants to verify the transactions during the course of reopened assessment, in our view, it cannot be said that the AO had entertained definite belief that there was escapement of income. It is a case of reopening of assessment on suspicions. Thus, we are of the view that the AO has not satisfied the mandatory condition prescribed for initiation of reassessment proceedings. Accordingly, we hold that the impugned reassessment proceeding is bad in law. 11. We noticed that the AO has reopened the assessment for the purpose of making protective addition. The question as to whether reopening of assessment for making protective addition is valid or not was examined b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was having reason to believe that income has escaped in the hands of the assessee-company. Reassessment cannot be made on mere suspicion. The Assessing Officer has to form a belief that income has escaped assessment in the hands of the assessee. Once it has been held that such investment belonged to Shri G.P. Goyal, then there was no further material to come to the conclusion that such escaped income belonged to the assessee. 2.6 The Apex Court in the case of Lalji Haridas v. ITO[1961] 43 ITR 387 observed at page 392 as under :- In case 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 th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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