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Pravinchandra N Kamdar Versus Dy. Commissioner of Income Tax-7 (3) , Mumbai

2017 (11) TMI 798 - ITAT MUMBAI

Non-granting of credit of cash seized and pay orders as advance tax against the income tax liability on the income offered in the statement u/s 132(4) - interest charged under section & 234B and 234C - Held that:- Money lying with the department amounting to ₹ 75,50,860/- deserved to be adjusted as advance tax liability and the interest charged under section 234C qua third quarter for non payment of advance tax is not at all legal and justified. u/s 234C, we are of the considered opinion, .....

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e tax if any. Appeal of the assessee stands allowed. - I.T.A. No.5194/Mum/2015 - Dated:- 13-11-2017 - SHRI D.T.GARASIA, JM AND SHRI RAJESH KUMAR, AM For The Assessee : Shri Paresh Shaparia For The Revenue : Shri H N Singh ORDER PER RAJESH KUMAR, A. M: This is an appeal filed by the assessee challenging the order dated 9.9.2015 passed by the CIT(A), Mumbai-49 whereby the ld.CIT(A) confirming the non-granting of credit of cash seized of ₹ 17,50,000/- and pay orders of ₹ 58,00,860/- as .....

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ferrous and non-ferrous metals. During the search proceedings cash of ₹ 17,50,000/- and jewellery worth ₹ 56,36,873/- were found. The cash was seized and a pay orders of ₹ 58,00,860/- dated 19.1.2012 was given to the search team for non seizure of jewellary. Thereafter, the assessee filed revised return of income on 25.7.2012 declaring total income of ₹ 2,90,54,548/- showing therein the undisclosed cash and jewellery as has been found during the course of search. The AO i .....

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of written communications requested the department to treat the same as payment towards advances of tax. It is pertinent to note that the cash seized on 24.11.2011 and pay orders dated 19.1.2012 were declared by the assessee in the statement recorded u/s 132(4) on 19.1.2012. The assessee disclosed income and offered to tax to the tune of ₹ 73,86,873/- comprising the cash seized as well as jewellery of ₹ 56,36,873/- and the return was filed on 25.9.2012 u/s 139 of the Act and requeste .....

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imed credits against the tax liability by way of advance tax, of cash seized of ₹ 17,50,000/- on 24.11.2011 and pay orders of ₹ 58,00,860/- dated 19.1.2012 submitted to the IT Department, in view of unreconciled jewellery/ornaments and silver articles etc. arising on account of disclosure of additional income made u/s 132(4} of the Act. The appellant has made various requests/application to adjust the cash seized and pay orders deposited against the tax liability to the A.D.I.T(lnv.} .....

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installment became due. In this case the request for adjustment of the seized assets was made by the appellant before the AD on 15.3.2012. However, it is noted that the above said decisions cited by the appellant and reproduced in para No. 34.2 above, can be distinguished since these decisions have not considered the Explanation 2 to section 132B inserted by the Finance Act 2013. The Explanation 2 is reproduced as under:- 132B(1) - The assets seized u/s 132 or requisitioned u/s 132A may be deal .....

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f the assessment under Chapter XIVB for the block period, as the case may be (including any penalty levied or interest payable in connection with such assessment) and in respect of which such person is in default or is deemed to be in default, or the amount of liability arising on an application made before the Settlement Commission under sub-section (1) of section 245C may be recovered out of such assets . ........ ... Explanation 2 - For the removal of doubts, it is hereby declared that the ex .....

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n explanation once enacted as part of an existing provision becomes part and parcel of such provision from the date of the provision itself, since it is ordinarily intended to remove an ambiguity and make the intention of Parliament clear, as a principle of interpretation of law Further, an explanation can have effect even for a period prior to its insertion, though it may not have been made retrospective in its operation, as was pointed out in CIT V P Doraisamy Chetty 1990 183 ITR 559 (SC). It .....

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e provisions of Part C of Chapter XVII and the amendment have made effective from 1.6.2013. Similarly, amendment to section 9 Explanation 4 was made in Finance Act 2012 with a language as for the removal of doubts, it is hereby clarified … and it was expressly provided that the amendment would be retrospective w.e.f 01.06.1976. I find that the above comparison is not appropriate since section 9 is a charging section and therefore, the retrospective effect was given by specific mention of .....

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ed with respect to ground no. 3 and the same is dismissed. Since non-granting of credit of ₹ 75,50,860/- has been upheld, relief u/s 234B on this count claimed in ground no. 4 of the appeal cannot be allowed. However, the AO would allow a consequential relief u/s 2348 while giving effect to this appellate order. Accordingly these grounds are dismissed on above terms. Dismissed. 4. The ld.AR vehemently submitted before us that the order of the ld.CIT(A) is wrong as it is passed without foll .....

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for non seizure closing jewellery/ornaments and silver articles. The ld. AR submitted that the income has been offered to tax in the return of income filed u/s 139 on 25.7.2012 and therefore the pay order and cash which was already taken into possession by the department should have been adjusted towards the advance of tax liability of the assessee. The ld. AR while referring to the pages 10 to 15 of the paper book submitted that the assessee has specifically requested The Assistant Director of .....

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and dismissed the appeal of the assessee. The ld. AR submitted that since l the money of the assessee was lying with the department to the tune of ₹ 75,50,760/-, the same should have been adjusted towards the advance tax liability at least for the third installment which fell due on 15.3.2013. In defense of his argument, the ld. AR relied on the series of judgement which are as under : a) CIT vs Sunil Chandra Gupta (TS-244-SC-2016) (SC) b) ClT vs Sunil Chandra Gupta (TS-123-HC-2015)(All HC .....

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ment of Income ITA No.3458/Mum/2011 dated 2 March, 2012 j) Nitin M Jadia vs. ACIT 107 Taxman 203 (Mum.) k) Sudhakar M. Shetty vs. ACIT 10 DTR 173 (Mumbai)(Trib) Lastly, the ld. AR prayed that in view of the facts and case laws relied upon by the ld. AR that the order of the ld.CIT(A) be set aside and direct the AO to treat the money lying with the department towards the advance tax liability and be directed to delete the interest component levied u/s 234B and 234C of the Act. 5. The ld.DR on the .....

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jewellery worth ₹ 56,36,873/- were found during search proceedings on 24.11.2011. The said cash was seized and a pay order ₹ 58,00860/- dated 19.01.2012 was given to the search team in lieu of non seizure of jewellery. The assessee filed return of income on 25.7.2012 offering the cash seized and jewelry in the said income. The assessee has specifically requested to The Assistant Director of Income Tax (Inv) Unit VIII(2), Mumbai vide letter dated 13.2.2012, The Asstt. Commissioner of .....

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,860/- deserved to be adjusted as advance tax liability and the interest charged under section 234C qua third quarter for non payment of advance tax is not at all legal and justified. u/s 234C, we are of the considered opinion, that the interest for non-default for non payment of tax should not be charges for he last 3rd installment and same is the position with regards to charging interest u/s 234B of the Act. The case of the assessee is also supported by the plethora of judgments, which are di .....

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