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2018 (1) TMI 840 - AT - Income TaxLevy of interest under section 220(2) - amount seized from the accounts of various companies during the course of search - interest imposed from the date of original demand notice - Held that:- If the Department on its own volition has made the addition, both in the hands of the assessee as well as in the hands of the companies for the same amount and chooses to adjust cash seized out of the demand of the companies, which was denied by the companies in their hands; and ultimately has been found to be not sustainable in their assessments, then charging of interest under section 220(2) from the assessee for such a huge delay of payment of demand cannot be attributed to the assessee, especially when finally Revenue in the wake of appellate orders had accepted that the amount seized from the companies belong to the assessee and instead of refunding the same to the said companies should have adjusted the cash in the hands of the assessee that very time under the given facts and circumstances of the case. Now finally, when Revenue has admitted that the amount seized belong to the assessee and tax liability was upon the assessee only, then, in our opinion, such cash seized/ offered to settle the cash liability, should have been accepted and assessee should be deemed to have made the payment specified in the demand notice within the period of limitation as provided u/s 220(1); and cannot be treated in default for not making the payment and thereby shift the adjustment of seized cash after expiry of more than 10 years from the date of demand created by the Assessing Officer. Thus, we hold that the interest u/s 220(2) under the given facts and circumstances of the case cannot be imposed from the date of original demand notice - Decided in favour of assessee.
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