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TMI Blog2012 (7) TMI 457X X X X Extracts X X X X X X X X Extracts X X X X ..... d of appeal raised in these two appeals read as under:- " The ld. CIT (A) erred in not giving credit to the cash seized by the department with effect from 19- 11-2008 and consequently not charging interest u/s 234 B and 234C." 3. Facts of the case, in brief, are that the assessee is an individual filed his return of income for assessment year 2008-09 declaring an income of Rs.5,77,900/-. A search and seizure operation was conducted in the residential premises of the assessee on 7-8-2008. In the course of search and seizure operation, cash amounting to Rs.1,13,00,000/- was found at the residential premises and an amount of Rs.1,10,00,000/- was seized. After the search and seizure operation, a statement was recorded from the assessee u/s 13 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d examine the issue in the light of section 132B of the Act. Not satisfied with the findings of the CIT (A), the assessee is in appeal before us. 5. In course of hearing before us, the learned counsel for the assessee contended that cash was seized from the assessee on 7-8-2008 on the date of search and was retained by the department. The assessee during the recording of statement u/s 131 had made a specific request to adjust the same towards his Income-tax liability for assessment years 2008-09 and 2009-10. Even thereafter, in response to a letter issued by the AO the assessee vide letter dated 8-10-2009 has specifically stated that the amount of cash seized to be sufficient to discharge tax liability of the assessee on the declared incom ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce u/s 153A, the assessee also computed his tax liability after adjustment of cash seized and as per the computation for the assessment years 2008-09 and 2009-10 which are at pages 4 and 6 of the paper book submitted by the assessee, the assessee is to get a refund of Rs.16,41,157/- for the assessment year 2009- 10 and there will be no tax liability so far assessment year 2008-09 is concerned if the cash seized will be adjusted. In spite of request of the assessee to adjust the cash seized, the AO while completing the assessment though had accepted the income declared by the assessee, he nevertheless did not adjust the cash seized. On the contrary, he raised a demand and charged interest u/s 234B and 234C of the Act. We find from the order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... quest for adjustment having been made on 28th Aug. 1989 and reminder on 12th Sept. 1989, no interest was exigible u/ss 234A and 234B of the Act. The Tribunal has rightly held that the assessee was entitled to adjustment of the said amount and no interest could be charged on that basis. Therefore, no fault could be found with the approach adopted by the Tribunal." In the case of Nikka Mal Babu Ram vs. ACIT (2010) 41 SOT 407 (Chd), Chandigarh Bench of the Tribunal held as under:- "In our considered opinion, the doctrine of purposive construction has to prevail in this situation. In the present situation, it is evident that cash was seized from the assessee during search operation and, assessee requested the Department to adjust a part of suc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s in his opinion were sufficient to satisfy the aggregate amounts referred to in cls. (ii), (iia) and (iii) of S. 132(5) and obligated him to release the remaining seized assets. In this background, the Hon'ble High Court, on the facts of the case before it, held that unless an order under s. 132(5) of the Act is passed, the AO could not direct that the assets seized be adjusted towards advance tax liability. The Hon'ble High Court specifically noted that it is only after an order under s. 132(5) is passed that the assessee can make a request that the seized amount which is sought to be released in his favour be adjusted or appropriated towards the liability to pay advance tax. Though, in the context of the present assessment year before us ..... X X X X Extracts X X X X X X X X Extracts X X X X
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