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2016 (6) TMI 380 - GUJARAT HIGH COURT

2016 (6) TMI 380 - GUJARAT HIGH COURT - [2016] 386 ITR 91 - 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 agai .....

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eized from Shri Vinod Sen, in case Shri Vinod Sen stakes a claim 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 inter .....

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For the Respondent: STANDING COUNSEL ORAL 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 .....

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sessment year 2012-13 on 30th July, 2012 declaring total income 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 return .....

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he seized amount along with interest after adjusting the demand. 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 .....

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ted by the respondent in the order under section 154 of the 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) 1 .....

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ision cannot defeat the substantive rights of a person and that 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 .....

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vestigation), Kochi from Shri Vinod Sen. On the basis of the 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, .....

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section 132B(3) of the Act which clearly states that the assets 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/ .....

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Central Circle - 2, Surat. However, upon verification by the 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 n .....

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nt, the Department would be put in a very precarious situation. 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 Vin .....

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elonged to the petitioner. As noted hereinabove, 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 liab .....

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ed. However, the record of the case reveals that 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 .....

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order under section 143(3) of the Act. Thus, the respondents 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. .....

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r, in the present petition, a contrary stand has been taken 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 .....

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