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2011 (7) TMI 521 - HC - Income TaxLevy of interest under Section 158BFA(I) - Escaped income - unaccounted expenditure - Held that:- In so far as the expenditure of Rs.6,73,750-00 is concerned, it is not an expenditure incurred by the assessee at all. The slips on the basis of which the said claim is made, was not seized in the assessee's premises. They were seized in the premises of the partner of the assessee and categorically stated that the said amount do not relate to the assessee. There is nothing in those documents to connect those expenditure to the assessee. Thus when the said material was not seized at the time of search of the assessee's premises and in no way it is connected with the assessee, the same cannot be the subject matter of the block assessment. In so far as levy of interest is concerned, it is not in dispute that at the time of seizure, cash was seized and kept in the PD account. Without taking into consideration the aforesaid amount, interest is levied by the Assessing Authority up to the dale of filing of the return. It is in that context, it was held that when payment of interest is compensatory in nature, when the amount belonging to the assessee is also in possession of the Revenue it is kept in FD, the said payment is to be taken into consideration in order to determine the tax liability and thereafter they have to determine the delay in payment of tax which alone would give rise to payment of interest. In that regard the appellate Commissioner remanded the matter back to the Assessing Authority to consider that aspect and pass appropriate orders which order has been without any justification, interfered with by the Tribunal. In favour of assessee.
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