ACIT Vs Payal Properties Pvt. Ltd. (ITAT Surat)
No Double Addition for Same Income – ITAT Surat Upholds Deletion of Protective Additions
Revenue appealed against CIT(A)’s deletion of protective additions of ₹3.95 crore & ₹1.45 crore made in the case of M/s Payal Properties Pvt. Ltd., representing payments routed through M/s I.B. Enterprises & M/s Dashmesh Developers. AO had made these additions on a protective basis, pending determination of substantive liability in the cases of the other two entities.
Tribunal noted that the substantive additions in the hands of M/s I.B. Enterprises & M/s Dashmesh Developers had already been confirmed by ITAT & CIT(A), respectively. Therefore, there was no scope for retaining parallel protective additions in Assessee’s case.
ITAT held that once substantive additions are sustained elsewhere, protective additions automatically fail. Accordingly, CIT(A)’s deletion of both additions was upheld.
Held: No duplication of income can be permitted; protective additions deleted.
FULL TEXT OF THE ORDER OF ITAT SURAT
This appeal by the revenue and Cross Objection (CO) by the assessee therein emanate from the order passed under section 250 of the Income-tax Act, 1961 (in short, ‘the Act’) dated 14.11.2017 by the Commissioner of Income tax(Appeals)-Valsad [in short, ‘the CIT(A)’] for the assessment year (AY) 2006-07, which in turn arises out of assessment order passed by the Assessing Officer (in short, ‘AO’) u/s. 143(3) r.w.s. 254 of the Act on 30.03.2016.
