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2014 (11) TMI 906 - HC - Income TaxLiability for interest u/s 139(8)/217 and 234A, 234B, 234C - Whether the Tribunal was justified in holding that the assessee was liable for interest u/s 139(8)/217 for the AY 1988-89 and interest u/s 234A & 234B for the AY 1989-90 upto 26.3.91 the due date when the return was filed without giving credit of the amount retained by the department u/s 132(5) for meeting future tax liability which was seized on 7.7.1989 – Held that:- The scheme of the Act clearly suggests that the money seized during the course of the search is retained by the Revenue for the liability of the assessee which may be determined finally by the assessment or re-assessment or by final order of assessment or re-assessment, the existing liability of a previous time is only quantified and not a creation of liability on the date of passing of the assessment order - the retained amount also required to be given adjustment against the then liability of the assessee, which has been quantified subsequently by the order of assessment and re-assessment - This fact finds support of sub-section (4) of Section 132B, which for excess amount retained by the revenue, the Central Government shall pay the interest – thus, the Tribunal was not justified in holding that the assessee was liable for interest u/s 139(8)/217 for the AY 1988-1989 and interest u/s 234A & 234B for the AY 1989-1990 up-to 26.3.91 – Decided in favour of assessee.
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