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2024 (2) TMI 1148 - ITAT RAJKOTAdjustment of "seized asset" against "existing liability" and levy of "interest u/s 234B" - outer time period of 120 days - HELD THAT:- It is undisputed fact that the AO accepted the returned income as the Assessed income of the respective assessees. The seized Cash and FDRs are from the disclosed source of income from the respective assessees only and therefore no addition or disallowance made by the AO while framing scrutiny assessments u/s. 143[3] of the Act. As the AO has not acted upon the Application for release/adjustment of Cash and FDRs, there was no occasion for him to record his satisfaction and prior approval from the Competent Authority for release of seized goods. The second proviso to section 132B(1)(i) makes it clear that the assets are required to be released within a period of 120 days from the date on which the last of the authorizations for search under section 132 or for requisition under s. 132A, as the case may be, was executed. In the present cases last date of search action concluded on 15-05-2010 and the outer time period of 120 days expired on 15-09-2010, but the Ld AO has not acted upon the Application for release of the seized goods and thereby retained the seized Cash and FDRs beyond the period of 120 days prescribed in the 2nd Proviso to section 132B(1)(i) of the Act. Coming to the main section 132B(1) of the Act, which prescribes that the assets seized u/s. 132 can be adjusted against any “existing liability” as per IT, WT or the amount of liability determined on the completion of regular assessment or reassessment including any penalty levied or interest payable in connection with such assessment or reassessment. As per this sub- section, AO ought to have adjusted against the tax liability of Rs. 6,39,620/- while framing the regular assessment as against the seized Cash of Rs. 5,39,000/- and FDRs of Rs. 99,99,999/-. In that event also, the assessee is entitled for release of surplus FDRs seized by the Department as per section 132B [3] of the Act and therefore there is no question of levy of interest u/s 234B and C of the Act. Thus in our considered view, the Ld AO miserably failed to adhere to the provisions of section 132B[1] and the CIT [A] is not justified in confirming the interest charged u/s. 234B of the Act for the period up to 15-09-2010. Therefore we direct the Ld AO to rework the computation in accordance with the provisions of law after providing proper opportunity of hearing to the assessees. Appeals filed by the assessees are allowed for statistical purpose. Non granting of Interest u/s 132B(4) on seized asset viz. FDR - CIT(a) held that mere seizure of the FDs, the appellant has not suffered any pecuniary loss by way of loss of interest, therefore, no interest u/s. 132B(4) can be granted to the assessee - HELD THAT:- Section 132(1)(c) of the Act reads "Any person is in possession of any Money, Bullion, Jewellery or Other Valuable Article or Things". Hence, Money is different from bullion, jewellery or other valuable article or things. Seized FDRs cannot be treated as “Money”, but only as “Other Valuable Article or Things”. As per section 132B[4][a] of the Act, the assessee is entitled to interest on the amount by which the aggregate amount of “Money” seized after 120 days. Thus the arguments of the assessee are not in consonance to the provisions of law and the same is liable to be rejected. The case law of Ajay Gupta-Vs-CIT [2007 (4) TMI 42 - HIGH COURT, NEW DELHI] relied by the assessee is not relating to seizure of FDRs but of “Money” and hence not applicable to the facts of the present case. Whereas the Madras High Court judgment in the case of Anil Kumar Kedia [2011 (1) TMI 1171 - MADRAS HIGH COURT]which was relied by the Ld. CIT(A) is squarely applicable to the facts of the present case. Thus we do not any infirmity in the orders passed by the lower authorities and the same does not require any interference and the assessee appeals are hereby dismissed.
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