TMI Blog2009 (11) TMI 83X X X X Extracts X X X X X X X X Extracts X X X X ..... s leave to add, alter, amend the grounds of appeal at or before the hearing." 2. In the present case income of the assessee was assessed under s. 158BC at a sum of Rs. 2,40,88,635 by making an addition of Rs. 2,39,23,988 as against returned income of Rs. 1,64,667. Pursuance to such assessment a demand of Rs. 1,57,89,832 was created. The assessment was subject-matter of appeal before CIT(A) and after giving effect to the order of CIT(A) the demand was reduced to Rs. 32,556. The seized cash of Rs. 25,65,000 was adjusted against the demand. Upon receiving appeal effect order, the assessee found that interest was not granted to him as under s. 132B(4)(a). Accordingly, the assessee filed an application under s. 154 to claim the interest receiv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... effect to the appellate order. 4. Learned Authorised Representative also referred to the following decisions: 1. Mohd. Usman vs. Union of India (1997) 143 CTR (Del) 133 : (1997) 224 ITR 730 (Del) to contend that assessee otherwise is also entitled to be compensative for deprivation of the use of money which was seized by the Department, against which there was no tax liability. 2. CIT vs. Narendra Doshi (2002) 174 CTR (SC) 411 : (2002) 254 ITR 606 (SC) to contend that Revenue is liable to pay interest on the amount of interest which it should have paid to the assessee but has unjustifiably failed to do so. 3. R.K. Jain Sons (HUF) vs. CIT (2005) 193 CTR (Del) 659, wherein following the decision of Hon'ble Supreme Court in the case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ions in the light of material placed before us. The relevant provisions of s. 132B are reproduced below for the sake of convenience: "132B. (1) The assets seized under s. 132 or requisitioned under s. 132A may be dealt with in the following manner, namely- (i) the amount of any existing liability under this Act, the WT Act, 1957 (27 of 1957), the Expenditure Tax Act, 1987 (35 of 1987), the GT Act, 1958 (18 of 1958) and the Interest-tax Act, 1974 (45 of 1974), and the amount of the liability determined on completion of the assessment (under s. 153A and the assessment of the year relevant to the previous year in which search is initiated or requisition is made, or the amount of liability determined on completion of the assessment under Ch ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ious year either assessment framed under s. 158BC or framed under new provision of s. 153A can be recovered from the seized assets. Clause (a) of sub-s. (4) of s. 132B states that Central Government, shall pay interest at the rate described in that section on the aggregate amount of seized money which is found to exceed the existing tax liability described in cl. (i) of sub-s. (1) of s. 132B. In other words, if the seized money is in excess of existing liability determined on completion of assessment, than Central Government shall pay simple interest at the rate mentioned for relevant period. Clause (b) of sub-s. (4) of s. 132B describes that such interest shall run from the date immediately following the expiry of 120 days from the date on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nnot be accepted for the reason that whenever any appellate order is passed against such assessment then the assessment gets merged with that order. According to procedure prescribed in the statute the effect has to be given to the appellate order and after giving effect to that appellate order, the assessment will be considered to be completed. Undisputedly, the finally assessed income in the case of the assessee as per order giving effect to appellate order is an income of Rs. 2,10,817 on which tax payable has been computed at Rs. 30,461. Therefore, the entire cash seized was not subject-matter of any legal demand. Only upto the lawful tax liability, which in the present case is a sum of Rs. 30,461, no interest was required to be paid by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ithout legal liability, for which the assessee has to be compensated by way of interest and provisions of s. 132B(4)(a) itself speaks of payment of such interest. Therefore, non-grant of interest to the assessee is totally unjustified. Here, it may be mentioned that there is no provision in the IT Act by which assessee is eligible for interest on interest but according to the decisions relied upon by learned Authorised Representative, Hon'ble Courts have granted the interest on interest due which was not paid to the assessee. Therefore, we find no force in the contention of learned Departmental Representative that the case law relied upon by learned Authorised Representative has no bearing on the facts of the present case. 12. In view of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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