A protective assessment cannot be sustained in the absence of a substantive assessment for the same assessment year. Furthermore, the reopening of an assessment under Section 147 requires a reasonable belief of income escapement based on tangible evidence rather than mere suspicion.

For Revenue : Shri Badicala Yadagiri, CIT-DR

For Assessees : Shri MV Prasad, C.A.

Date of Hearing : 06.08.2025

Date of Pronouncement : 08.10.2025

ORDER

PER MANJUNATHA G, A.M. :

The above batch of 4 appeals are filed by the Revenue against the respective separate Orders dated 10.07.2024 and 30.09.2024 of the learned Commissioner of Income Tax (Appeals)-12, Hyderabad, relating to the assessment year 2016-2017 tabulated hereinabove in the above cause title. Since common issues are involved in all these 4 appeals, these appeals were heard together and are being disposed of by this single consolidated order for the sake of convenience and brevity. First, we take up Revenue’s appeal in ITA. No. 359/VIZ./2024 for the assessment year 2016-2017, in which, the Revenue has raised the following grounds :

i. “The Ld. CIT(A) ought to have upheld the addition made by the AO, as the assessee firm claimed to have given an amount of Rs.2,15,00,000/- as advance to M/s. Jaya Balajee Real Media Private Limited (JBRMPL) in the F.Y. 2015-16 relevant to A.Y. 2016-17 in the form of cash during the demonetization period, since the assessee has failed to discharge the onus to prove that the transaction is genuine.

ii. The addition of Rs.2,15,00,000/- has been confirmed in the hands M/s. Jaya Balajee Real Media Private Limited (JBRMPL), which went for further appeal before Hon'ble ITAT, Visakhapatnam (ITA.No.674/Hyd /2024 dtd.13.07.2024). In order to keep the issue alive in the hands of the assessee, since the assessment was done on protective basis, further appeal is necessary.

iii. Any other ground that may be urged at the time of appeal hearing.”

2. Briefly stated facts of the case are that, the assessee is a Firm engaged in the business of Cotton Trading & Ginning business along with investment in Films. In this case, consequent to deposit of Rs.40 Crores in Specified Bank Notes (SBNs)/old demonetized notes during the demonetization period in December, 2016 in the bank account of M/s Jaya Balajee Real Media Private Limited [in short “JBRMPL”], a search and seizure operation u/sec.132 of the Income Tax Act, 1961 [in short “the Act”] was carried out on that company, it’s Directors and other related parties on 31.12.2016. During the search and seizure proceedings, sworn statements were recorded u/sec.132(4) of the Act on 02.01.2017, 03.01.2017, 17.02.2017 and 24.02.2017 from Sri Thandra Ramesh, Director of JBRMPL, in which, he has mentioned the name of M/s. Vijaya Sai Laxmi Srinivasa Cotton Mills only in the written submissions filed on 17.03.2017 as source of Rs.2,15,00,000/- claimed to have given as advance for the movie rights during financial year 2015-2016. Therefore, the Assessing Officer has reason to believe that the income chargeable to tax has escaped assessment and the case was reopened u/sec.147 of the Income Tax Act, 1961 by issuing notice u/sec.148 of the Income Tax Act, 1961 on 22.03.2019. In response, the assessee vide email dated 18.07.2019 has sta