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2008 (3) TMI 692 - AT - Income TaxAdjustment of cash seized at the time of search against the advance tax liability - completion of assessment u/s 153A - Interest charged u/s 234B and 234C - HELD THAT:- After going through the old provisions of law and the new provisions of law of s. 132B and cl. (d) of s. 158BC, it is amply clear that whatever the amount has been seized by the Department that has to be treated against any pending demand including penalty and against the demand of the block period of which the assessment has to be completed. As per the old provisions of law, the AO has to wait (sic) the order under s. 132(5) and then the order under s. 158BC. However, taking into the difficulties of the assessee in mind, the legislature has amended the provisions of s. 132B as well as cl. (d) of s. 158BC. Even as per the amended provisions of law, there is no requirement to seek any request from the assessee for adjustment. However, in the present case, the assessee has requested to adjust the remaining cash seized during the search against the tax liability of the assessee. Therefore, in our considered view the Department has to adjust the amount seized at the time of search towards the advance tax, etc., from the date when the amount was seized. It is incorrect on the part of the AO, who has taken into consideration the adjustment from the date of assessment. It is a matter of commonsense that once the amount is lying with the Department that has to be adjusted; otherwise that amount where will be adjusted and in which account the Department will keep the amount. The seizure of the amount is for the' obvious reason that the same has to be adjusted against any demand raised against the assessee or against any demand which is pending before the date of search. Therefore, we direct the AO to adjust the remaining cash seized by the Department from the date of seizure because if any amount is to be adjusted against any liability the date of payment of that liability shall be the date of seizure and not the date of adjustment and/or the date of order. The AO is therefore, directed to modify his order accordingly. Rate of interest under ss. 234A and 234B has to be applied - The rate of tax (sic-interest) is mentioned under the respective sections. It is also clearly mentioned that what rate is to be charged from which date and upto which date and what rate has to be charged from the date of amendment. Therefore, the AO is directed to ascertain the factual date that upto which date the current rate of interest is to be charged. The AO will also allow opportunity to the assessee for applicability of current rate of interest. We order accordingly. In the result, the appeals filed by the assessee are allowed in part.
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