2023 (5) TMI 630 - ITAT DELHI

Interest u/s 234 B - Advance tax - Adjustment / Credit for cash as seized at the time of search - AO stated that the existing liability does not include advance tax payable and observed that by applying the provisions of Explanation 2 to section 132B of the Act, the assessee’s plea has been rightly rejected by the AO - HELD THAT:- Seized cash of Rs. 1.76 crores was not given credit by the ld AO in the assessment framed u/s 143(3) of the Act dated 31.03.2016. It is not in dispute that the assessee had indeed made a claim for adjustment of seized cashwith his self assessment tax payable by the assessee along with return of income on 31.08.2015 itself.

This was conveniently ignored by the lower authorities. From the bare reading of provisions of section 132B of the Act together with Explanation 2 thereon, there is no prohibition to adjust the seized cash with self assessment tax. What is prohibited is only adjustment of seized cash with the advance tax. Hence, we hold that the assessee is entitled for adjustment of seized cash of Rs. 1.76 crores with self assessment tax payable by the assessee in the return of income.

Our view is further fortified by the decision of ACIT Vs. Narendra N. Thacker [2015 (11) TMI 62 - ITAT KOLKATA] and in case of Spaze Towers (P) Ltd [2016 (11) TMI 1401 - PUNJAB AND HARYANA HIGH COURT]

Ground raised by the assessee is hereby allowed.