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2023 (9) TMI 1613 - AT - Income TaxUndisclosed money - Assessee was found to be owner of currency notes -Demonetisation of Old High Denomination Currency Cash Deposits in Bank Accounts - As argued amount of normal household savings which was even allowed by CBDT Press Release/Instruction dated 18.11.2016 and 21.02.2017 to all households at the time of demonetization - HELD THAT - CBDT has clarified that the genuine persons depositing their own household savings in cash into the bank accounts would not be questioned. Further, it is also mentioned that the Unless all citizens of the country help the Government in curbing black money, this mission of black money will not succeed. Also the people who are against the black money should give information of such illegal activities going on to the Income-tax Department so that immediate action can be taken and such illegal transfer of cash can be stopped and seized. Black money is a crime against humanity. We urge every conscientious citizen to help join in the Government in eradicating it. Then, the Instruction dated 21.02.2017 issued by CBDT prescribed a Standard Operating Procedure for on-line verification of cash- transactions. Thus, the Press Release/Instruction do not save the assessee s case of transferring hefty cash of Rs. 49.99 lakh in bags from one place to another. The assessee himself admitted not only the ownership of cash but also to have earned from undisclosed sources of current financial year 2016-17 and it was not even the case of assessee that the impugned cash represented saving of household or past savings or savings of somebody else like his wife. Therefore, we are not convinced by AR s submission that the assessee s case deserves any relief. Being so, we uphold the addition made/upheld by lower-authorities. This ground is dismissed. AO has rightly assessed the income u/s 69A along with higher rate of tax u/s 115BBE. Levy of interest u/s 234A, 234B and 234C - In a recent decision in CIT Vs. Arun Bansal 2023 (6) TMI 39 - ITAT DELHI held on a reading of section 132B of the Act, though it transpires that the assets seized can be adjusted against any existing liability under the Act and advance tax may not be an existing liability, however, in our view, self assessment tax is certainly an existing liability created on 1st April once the financial year ends. Therefore, the AO should have adjusted the tax liability relating to the undisclosed income declared by the assessee by way of self assessment tax on 1st April, 2019. In that eventuality, there could not have been levy of interest u/s. 234B, as interest u/s. 234B of the Act has to be computed from first day of April following the financial year, for which, advance tax was required to be paid. We remit this ground back to AO with a direction that the AO shall give benefit of the decision to assessee in calculation of interest and re-compute interest accordingly. Thus, this ground is allowed partly for statistical purpose. Levy of interest u/s. 234B of the Act by observing that the cash seized should have been adjusted against self assessment tax payable with the return of income. We hold that interest charged u/s. 234B of the Act in the peculiar facts and circumstances of the present case, deserves to be deleted. We, accordingly, delete the addition. We remit this ground back to AO with a direction that the AO shall give benefit of the decision to assessee in calculation of interest and re-compute interest accordingly. Thus, this ground is allowed partly for statistical purpose.
Issues Involved:
1. Validity of the assessment order due to alleged lack of application of mind by the JCIT under section 153D. 2. Addition of Rs. 2,40,000/- as undisclosed income. 3. Application of higher tax rate under section 115BBE. 4. Imposition of interest under sections 234A, 234B, and 234C. 5. Initiation of penalty proceedings under section 271AAB. Issue-wise Detailed Analysis: Issue 1: Validity of Assessment Order The assessee initially contested the validity of the assessment order, claiming it was null and void due to the alleged lack of application of mind by the JCIT when granting approval under section 153D. However, this ground was not pressed during the hearing and was dismissed as non-pressed. Issue 2: Addition of Rs. 2,40,000/- The assessee challenged the addition of Rs. 2,40,000/-, arguing it was a normal household saving, citing CBDT Press Release/Instruction during demonetization. The CIT(A) upheld the addition, noting that the cash was found in Jaipur, not Ratlam, and the Press Release/Instruction was only applicable for bank deposits, not for carrying cash. The tribunal agreed with the CIT(A), emphasizing that the assessee admitted the cash was from undisclosed sources and not recorded in books, thus dismissing the ground. Issue 3: Application of Higher Tax Rate under Section 115BBE The assessee contested the application of a 60% tax rate under section 115BBE, arguing the amendment was effective from 15.12.2016, while the cash was seized on 14.11.2016. The tribunal referred to the decision of the Hon'ble Kerala High Court, which held the amendment applied to the entire previous year 2016-17. The tribunal followed this decision, rejecting the assessee's contention and upholding the higher tax rate. Issue 4: Imposition of Interest under Sections 234A, 234B, and 234C The assessee argued against the imposition of interest, stating the entire cash was seized and requested its adjustment against tax liabilities. The tribunal noted the prohibition against adjusting seized assets against advance tax liability post-01.06.2013, but acknowledged the possibility of adjusting against self-assessment tax. The tribunal remitted the issue back to the AO to recompute interest, allowing this ground partly for statistical purposes. Issue 5: Initiation of Penalty Proceedings under Section 271AAB The assessee did not press this ground during the hearing, and it was dismissed as non-pressed. Conclusion: The appeal was partly allowed for statistical purposes, specifically regarding the recalculation of interest under section 234B, while other grounds were dismissed. The tribunal upheld the additions and tax rate applied by the AO and CIT(A), aligning with the legal provisions and judicial precedents.
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