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2016 (8) TMI 866 - AT - Income TaxComputation of interest u/s 234B and adjustment of seized cash towards tax liability - Adjustment of seized cash towards the tax liability aroused on account of filing of revised returns u/s 153A - Held that:- Charging of interest without adjusting the seized cash is unjustified when the funds of the assessee are already with the department and the assessee had not enjoyed these funds from the date of search. We find force in the arguments of the assessee for the reason that as per the provisions of section 132B of the Act, the seized assets are to be adjusted towards any existing tax liability under the direct taxes and towards any liability that arises on completion of assessment etc. In the present case on hand, on perusal of the documents available on record, we find that at the time of search the department has seized about ₹ 15.99 crores. The assessee has made several requests even before the investigation department towards adjustment of seized cash towards the tax liability aroused on account of filing of revised returns u/s 153A of the Act. The A.O. without adjusting the seized cash computed the interest up to the date of assessment. As per the provisions of section 234B of the Act, interest is required to be charged up to the date of filing of return u/s 153A of the Act. It is due to the fact that in the returns of income, the assessee had clearly made a request to adjust the seized amount towards the liability of self assessment tax. Once the return is filed, any tax due on account of income disclosed is amounting to existing tax liability and the department is bound to adjust the seized cash towards the existing tax liability of the assessee to the extent of liability of self assessment tax. Therefore, the A.O. is not correct on charging interest on total income assessed up to the date of assessment. The CIT(A) after considering the relevant facts directed the A.O. to charge the interest on returned income, up to the date of filing return of income in response to notice u/s 153A after adjusting the seized cash, and wherever there is a tax liability on account of additions made to assessed income, the interest is to be charged up to the date of assessment. We do not see any error or infirmity in the order passed by the CIT(A). Therefore, we are inclined to uphold the CIT(A) order and reject the ground raised by the revenue. The assessee has filed cross objections for all the years challenging the order of CIT(A), confirming the levy of interest u/s 234B up to the date of filing return of income in response to notice under sec. 153A on returned income and up to the date of assessment wherever there is additions to returned income. Therefore, for the reasons recorded in the preceding paragraphs, we dismiss the cross objections filed by the assessee for all the assessment years.
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