Surendra Kumar Jain Vs DCIT (ITAT Delhi)
The appeal concerned additions made on a protective basis for Assessment Year 2012-13 under Sections 147 and 143(3). The Assessing Officer treated Rs.160.49 crore as unexplained cash credits and further estimated 1.8% commission of Rs.2,88,88,200, alleging that the assessee was involved in providing accommodation entries. These additions were upheld by the CIT(A).
During the hearing, the Tribunal examined whether any substantive assessment existed in another person’s hands for the same alleged transactions. It noted that both additions had been made only on a protective basis and that the records did not show any corresponding substantive addition made before or alongside the impugned assessment.
Relying on the Supreme Court’s decision in Lalji Haridas, the Tribunal observed that a protective assessment is permissible only when a substantive assessment exists or is simultaneously made to safeguard revenue interests. It further referred to the Bombay High Court ruling in DHFL Venture Capital Fund, holding that reopening proceedings under Sections 147/148 cannot be initiated merely for protective purposes.
Since no substantive addition was identified, the Tribunal found merit in the assessee’s challenge and deleted both additions. The appeal was allowed, rendering other grounds academic.
FULL TEXT OF THE ORDER OF ITAT DELHI
