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Hemal Dilipbhai Shah Versus Assistant Commissioner Of Income-Tax

Unexplained cash - release of seized articles (cash) belonging to the petitioner - Held that:- It is not in dispute that the seized articles (cash) belong to the petitioner, who has also disclosed the unexplained cash of ₹ 21,73,000/- for taxation in the year under consideration, and in fact, the respondent, in the assessment proceedings, has also accepted such fact and has given credit of ₹ 8,84,040/- to the petitioner against the seized amount. The person from whom the cash had bee .....

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laim to the seized amount, the Department would be put in a precarious situation, the court is of the view that the said apprehension can be allayed by calling upon the petitioner to file an undertaking to the effect that in case Shri Vinod Sen stakes such claim, the petitioner would indemnify the Department. - The respondent is directed to forthwith refund the balance amount after adjusting the tax dues of the petitioner with interest (if any) in accordance with law subject to the petitione .....

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JUDGMENT (Per : Ms. Harsha devani) 1. By this petition under Article 226 of the Constitution of India, the petitioner seeks a direction to the respondent to release the cash of the petitioner amounting to ₹ 15,84,020/- with interest forthwith. 2. The petitioner who is assessed in the capacity of an individual derives income from salary and interest. On 16th February, 2012, ₹ 26,00,000/- in cash came to be seized by the Department from one Vinod Shan .....

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ome of ₹ 27,52,100/- including the income declared of ₹ 21,73,000/- on account of unexplained cash. The petitioner filed an application dated 14th June, 2012 to the Jurisdictional Assessing Officer to adjust the tax liability from the seized amount. On 21st October, 2013, the assessment order came to be passed under section 143(3) wherein the petitioner was assessed at a total income of ₹ 31,79,100/- against the returned income of ₹ 27,52,100/-. A penalty order dated 1st .....

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and. By a communication dated 17th December, 2013, the Assessing Officer informed the petitioner that the Department is not in a position to issue the refund until completion of the assessment of Shri Vinod Sen. The petitioner made two more representations dated 31st December, 2013 and 31st January, 2014 to the Assessing Officer requesting that the cash be released. However, since there was no response thereto, the petitioner has filed the present petition seeking release of the amoun .....

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Act and hence, the excess cash of ₹ 15,84,020/- must be returned forthwith in view of the provisions of section 132B(3) of the Act. It was, accordingly, urged that the petition deserves to be allowed by granting the relief as prayed for therein. In support of his submissions, the learned advocate placed reliance upon the decision of the Punjab & Haryana High Court in the case of Rajinder Kumar Verma v. Union of India, (2009) 181 Taxmann 215 (P&H), for the proposition that where the .....

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hat the said provision was intended to apply in case of a dispute of title or absence of title and not where the title of the party is undisputed. It was submitted that the above decision would be squarely applicable to the facts of the present case, inasmuch as there is no dispute about the ownership of the seized cash, and hence, the respondents are not justified in not returning the same to the petitioner. 4. On the other hand, Mr. M.R. Bhatt, Senior Advocate, learned counsel for t .....

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statement of Shri Vinod Sen during the proceedings under section 132A of the Act attributing the ownership of the goods to the petitioner and the admission of the petitioner to that effect, proceedings under section 153C of the Act had been carried out in the case of the petitioner and a demand of ₹ 8,81,010/- has been raised in the case of the petitioner, which has remained unpaid as on date. It was submitted that at this stage, as per the provisions of section 132B(1)(i), only the exist .....

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sets which remain have to be made over to the person from whose custody the assets were seized . It was reiterated that the cash was seized from the custody of Shri Vinod Sen and not the petitioner and, therefore, the requisitioned assets (cash) can be adjusted or released only in favour of Shri Vinod Sen as per the provisions of the Act and that the Act does not give any discretion to the income tax authorities to deal with the seized/requisitioned assets in any other manner. 4.1 It .....

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e field office of Bhilwara region, it was reported that no such village exists in the Bhilwara district and hence, they were unable to trace Shri Vinod Sen. It was submitted that the petitioner was requested to provide details of Shri Vinod Sen s whereabouts so that pending proceedings under section 153A of the Act could be completed; however, the petitioner has failed to produce any details, in the absence of which, the Department is not in a position to carry out and finalise the proceedings u .....

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on. It was, accordingly, urged that the petitioner has no locus standi to request for release of the seized assets and the petition being devoid of merits, deserves to be dismissed. 5. From the facts noted hereinabove including the averments made in the affidavit-in-reply filed by the respondent, it is evident that it is an admitted position that the person from whom the cash of ₹ 26,00,000/- was seized namely, Shri Vinod Sen has, in his statement recorded during the proceedings .....

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the petitioner in the application for release of the seized assets (cash) has requested the respondent to adjust the pending dues against the cash and to refund the balance amount with interest thereon. The request made by the petitioner is not acceded to by the respondent by placing reliance upon the provisions of sub-section (3) of section 132B of the Act which provides that any assets or proceeds thereof which remained after the liability referred to in clause (1) of sub-section (2) is discha .....

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on an application for rectification made by the petitioner under section 154 of the Act, the respondent has accepted the contention of the petitioner that the seized cash amount of ₹ 26,00,000/- was not considered while computing the tax liability. Accordingly, by an order dated 4th November, 2013 made under section 154 of the Act, the Assistant Commissioner of Income Tax has allowed credit of ₹ 8,84,040/- to the petitioner for the purpose of computing interest under section 234B con .....

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s have themselves treated the cash amount of ₹ 26,00,000/- as belonging to the petitioner and have adjusted the same against the demand raised against the petitioner. Therefore, the averments made in the affidavit-in-reply to the effect that the demand of ₹ 8,81,010/- remains unpaid as on date does not appear to be correct, inasmuch as, credit of such amount has been given to the petitioner out of the cash seized. 6. Apart from the fact that the Department has also accepte .....

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to the effect that the cash having been requisitioned from Shri Vinod Sen can be released only in his favour and that the cash so seized can be adjusted only against the dues of Shri Vinod Sen. 7. At this juncture, reference may be made to the decision of the Punjab & Haryana High Court in the case of Rajinder Kumar Verma v. Union of India (supra), wherein the court was dealing with a case involving a similar set of facts where there was no dispute that the seized articles belonge .....

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