Facts of the Case

The present appeal pertains to Assessment Year 2014–15. The Revenue challenged the order of the Income Tax Appellate Tribunal dated 19.04.2023.

The Assessing Officer had made a protective addition of ₹2,75,75,955/- in the hands of the respondent/assessee. This addition was made because a substantive addition on the same amount was already made in the case of a company, namely Everbez Business Inc., where the assessee was a director and sole shareholder.

The Commissioner of Income Tax (Appeals) deleted the protective addition on the ground that substantive proceedings were already initiated against the company under the Black Money Act, 2015. The Tribunal upheld this deletion.

Issues Involved

  1. Whether a protective addition can be sustained when a substantive addition exists in another entity.
  2. Whether proceedings under the Black Money Act against a company justify deletion of protective addition in the hands of an individual.
  3. Whether the Revenue should pursue parallel taxation remedies or await outcome under the 2015 Act.

Petitioner’s Arguments (Revenue)

  • The Revenue challenged the Tribunal’s order sustaining deletion of protective addition.
  • It was submitted that the matter should remain open in case proceedings under the Black Money Act fail.
  • The Revenue requested liberty to revive the appeal depending on the outcome of proceedings against the company. 

Respondent’s Arguments (Assessee)

  • The respondent was not represented during the hearing.
  • However, based on earlier findings, the assessee’s position stood that:
    • Substantive addition had already been made in the company’s hands.
    • Therefore, protective addition in the individual’s hands was unjustified.

 Court Order / Findings

  • Since substantive proceedings were ongoing against the company under the Black Money Act, continuing the present appeal was unnecessary at this stage.
  • The Court agreed with the Revenue’s suggestion to close the appeal with liberty.

Final Order

  • The appeal was closed.
  • Liberty was granted to the Revenue to approach the Court again if it fails in proceedings under the Black Money Act.

 Important Clarification


  • The Court did not adjudicate on merits of the addition.
  • The decision is procedural, allowing flexibility to the Revenue.
  • It reinforces that:
    • Protective additions are contingent in nature
    • They may not survive where substantive taxation is being pursued effectively elsewhere.

Sections / Law Involved

  • Income Tax Act, 1961 (Protective vs Substantive Addition Principles)
  • Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 

Link to download the order -https://delhihighcourt.nic.in/app/showFileJudgment/60814122023ITA7542023_173414.pdf

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