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TMI Blog2011 (11) TMI 480X X X X Extracts X X X X X X X X Extracts X X X X ..... nd final tax liability of the assessee and not against the advance tax liability. Therefore, interest u/s 234B & 234C are rightly charged - Decided in favor of Revenue. X X X X Extracts X X X X X X X X Extracts X X X X ..... partners of the assessee firm voluntarily offered pay orders of the equal amount of Rs. 95 lacs. The partners of the assessee have also made a request that the unexplained cash found and seized as well as the pay orders given against the seized jewellery may be adjusted as advance tax against the tax liability of the assessee firm of the current year. He has further submitted that the unexplained cash and jewellery found in the hands of the partners of the assessee firm was out of the income disclosed by the assessee. Thus, the ld AR of the assessee has submitted that against the returned income of Rs. 11,81,10,720/-, the assessee had prepared the total tax of Rs. 4,61,05,921/-. He has referred the details and submitted that the unexplained cash seized of Rs. 57,86,000/- plus pay orders given by the partners of Rs. 95 lacs in lieu of jewellery seized total amounting to Rs. 1,52,86,000/-whereas the assessee made the payment by way of advance tax and TDS of Rs. 3,08,19,921/-. Thus, the total pre-paid tax in the case of the assessee is Rs. 4,61,05,921/- but the Assessing Officer did not give the adjustment of Rs. 1,52,86,000/- as advance tax while deciding the petition of the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the unexplained cash and jewellery were seized from the partners of the assessee firm and not from the assessee. Therefore, the unexplained cash and jewellery seized during the course of search and seizure action has to be adjusted against the tax liability, if any, of the partners, at the first place; and if any amount remains as surplus, the same has either to be refunded or adjusted against tax liability of the other co-assessee, if so requested/consented. 6.1 In the case in hand, the liability of the partners was to be finally determined on completion of the respective assessments. Therefore, before the assessment of the partners were completed, it would not be determined as to how much amount from the seized cash and jewellery (later on realized against cash/DD) had to be adjusted against the tax liability of the partners. The CIT(A) had discussed and adjudicated the issue in para 1.7 to 1.12 as under:- "1.7 Perusal of the various computations filed by the partners of Sumer Group of cases before the CIT - Central-III, Mumbai on 23.04.2007, it transpired that the cash of Rs. 57,86,000/- was seized and D.D. obtained in lieu of jewellery not seized pertain to various perso ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to sell seized gold ornaments and jewellery and appropriate same towards advance tax. Department did not take any action at all but ultimately saddled assessee with interest u/s. 234B and 234C. The assessee was not liable for levy of interest against payment of advance tax to extent of value of seized gold ornaments and jewelry w.e.f. 17.12.1990. The facts of this case are different from the case of the appellant. In the case of the appellant, the gold was seized from the assessee and he has made statement that the gold ornament has been purchased from the undisclosed income declared during search and tax may be collected after sale of jewellery. In the case of the appellant, no cash was seized from the appellant and therefore, there was no request appellant also for the adjustment of cash. The assets seized from other persons cannot be adjusted against the advance tax demand of the appellant unless their assessment is completed u/s. 143(3) and there is no liability against them. The appellant has further relied on the decision of Hon'ble ITAT Mumbai Bench in the case of Vipul D Dosi v. ACIT 5754 (Mum.) of 1998 decided on 23.10.2000 on similar facts and not applicable in the case o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... om the end 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:- Provided further that such asset or any portion thereof as is referred to in the first proviso shall be released within a period of one hundred and twenty days from the date on which the last of the authorizations for search under section 132 or for requisition under section 132A, as the case may be, was executed; (ii) if the assets consist solely of money, or partly of money and partly of other assets, the Assessing Officer may apply such money in the discharge of the liabilities referred to in clause (i) and the assessee shall be discharged of such liability to the extent of the money so applied; (iii) the assets other than money may also be applied for the discharge of any such liability referred t ..... 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