Delhi ITAT deletes
protective addition of Rs.371.34cr in respect of income of overseas companies
made in the hands of shareholder assessee (individual) while conducting search
and seizure operation u/s 132(1) for AYs 2006-07 to 2012-13; Notes that Revenue
had made addition in the hands of 3 persons – 1) overseas companies (on
substantive basis) 2) assessee’s husband (on protective basis on the grounds
that he exercised control and management of the affairs of the overseas
companies) 3) assessee (on protective basis on the ground that even though
profits of all the overseas companies were taxable in India being ‘Resident’
u/s 6(3), they did not admit to be in jurisdiction of India and hence no valid
return was filed by them); ITAT opines that “when addition was already made in
the hands of the overseas companies on substantive basis treating them as
residents in India, there is no justification for the Assessing Officer to make
such an addition in the hands of a share holder on protective basis, when no
benefit was derived by her from these companies to protect the interest of
revenue”; Further, noting that based on the assessment of assessee’s husband,
Revenue made addition of similar amount in case of assessee, ITAT opines that
“the Assessing Officer did not assess the income of the assessee based on the
details filed in her return u/s 153A, but assessed the income of the overseas
companies in her hands without any basis”; Observing that CIT(A) had deleted
entire protective addition in assessee’s husband’s case, ITAT states that the
same would apply mutatis mutandis to assessee’s case and thus deletes the
addition as ‘unwarranted and unjustified’:ITAT
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