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2015 (3) TMI 543 - ALLAHABAD HIGH COURT

2015 (3) TMI 543 - ALLAHABAD HIGH COURT - TMI - Interest under Section 234A, 234B & 234C - default in payment of advance tax - cash seized in the course of search - Adjustment to the cash lying in the P.D. account against the advance tax - Tribunal deleted interest observing that the cash belongs to the assessee was already in the government account so there is no question to charge the interest - Held that:- As during the search, a huge cash was recovered. The assessee, while making statement u .....

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that before the due date, the cash was available with the department. The same could have been adjusted against the advance tax. The return was filed on or before the due date so the interest for default in furnishing the return of income under Section-234A was not desirable. Similarly, the interest for default in payment of advance tax is also not leviable under Section-234B for the reason that assessee had already made a request for adjustment of the amount against the advance tax which was a .....

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livered by Dr. Satish Chandra,J.) The present appeal is filed by the department against the impugned order dated 28.02.2004, passed by the Income Tax Appellate Tribunal, Agra in I.T.A. No. 290/Agra/2013 for the assessment year 2010-2011. The brief facts of the case are that on 10.03.2010, a search and seizure operation was conducted at the residence and business premises of the assessee. The bank lockers were also searched. During the search, a sum of ₹ 4,31,36,000/- was found in cash and .....

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rged the interest under Section-234A, 234B & 234C of the Act. The said interest was deleted by the first appellate authority by observing that the cash was available with the department before filing the return and the same could have been adjusted against the demand of the advance tax. The Tribunal has confirmed the same by observing that the cash belongs to the assessee was already in the government account so there is no question to charge the interest and to this effect the Tribunal has .....

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ets seized under section 132 or requisitioned under section 132A may be dealt with in the following manner, namely- (i) The amount of any existing liability under this Act, the Wealth Tax Act, 1957,(27 of 1957), the Expenditure Tax Act, 1987(35 of 1987), the Gift Tax 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 section 153A and the assessment of the year relevant to the previous year in which .....

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of the month in which the asset was seized, for release of asset and the nature and source of acquisition of any such asset is explained] to the satisfaction of the Assessing Officer, the amount of any existing liability referred to in this clause may be recovered out of such asset and the remaining portion, if any, of the asset may be released, with the prior approval of the Chief Commissioner or Commissioner, to the person from whose custody the assets were seized. [Explanatio2.- For the remov .....

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propriated against the amount of any existing liability which does not include the advance tax. Accordingly, the cash seized during the course of search cannot be appropriated against the advance tax. On the other hand, Sri S.D. Singh, learned Senior Counsel assisted by the Sri Rahul Agarwal, learned counsel for the assessee-respondent had justified the impugned order passed by the Tribunal. At the strength of written submission, learned counsel for the assessee submitted that the cash was seize .....

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iability of the tax was about ₹ 3 Crore, out of which a sum of ₹ 4,31,36,000/- was seized and deposited by the department in the P.D. account controlled by the department. At least on the 03 occasions, requests were made for the adjustment but the department neither replied nor adjusted the amount. It is injustice to the assessee to hold on to the cash belonging to the assessee in the government account and, at the same time, charge interest for non payment of advance tax on the due .....

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course of search towards the advance tax liability. Lastly, he made a request to uphold the order passed by the Tribunal. We heard both the parties at length and carefully gone through the materials available on records from which it appears that, during the search, a huge cash was recovered. The assessee, while making statement under Section-134 of the Income Tax Act, offered to pay the tax on an undisclosed income of ₹ 10 Crore for which the tax would come to approve ₹ 3 Crore but .....

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