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2017 (5) TMI 1423 - AT - Income TaxInterest on Advanced Tax - Non grant of credit for cash seized during search - charge of Interest u/s. 234B and 234C - Held that:- We find that it is not disputed that assessee has offered the amounts seized as undisclosed income during search. The revenue has also accepted the same as assessee’s income. In such situation when assessee has requested to adjust the cash seized against the assessee’s liability towards tax the authorities below have erred a not adjusting the cash seized against the tax liability including of tax liability. In this regard we note that Hon'ble jurisdictional High Court in the case of CIT vs. Shri Jyotindra B. Mody [2011 (9) TMI 97 - BOMBAY HIGH COURT ] had held that once assessee offers to tax undisclosed income including the amounts seized during search, the liability to pay advance tax in respect of that amount arises even before completion of the assessment. The Hon'ble High Court further held that section 132 B(1) of the Act does not prohibit utilization of amounts seized during the course of search towards the advance tax liability. Provision of Explanation 2 to Section 132 (B) (4) which excludes advance tax from the ambit of existing liability is applicable from 1st June 2013 and not applicable to the assessment years involved in this appeal. Thus we find that assessee was entitled to adjustment of cash seized and offered for taxation towards its liability for taxes including advance tax. Hence in our considered opinion the authorities below have erred in charging interest u/s. 234 B and 234 C on the facts of the circumstances of the case. - Decided in favour of assessee.
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