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TMI Blog2012 (7) TMI 516X X X X Extracts X X X X X X X X Extracts X X X X ..... k place - appeals filed by the assessee stand dismissed. - ITA Nos.3904 2 & 3664/Del./2011 - - - Dated:- 8-6-2011 - SHRI U.B.S. BEDI, AND SHRI B.C. MEENA, JJ. ASSESSEE BY : Shri V.K. Bindal, CA REVENUE by : Shri Niranjan Kouli, CIT DR ORDER PER B.C. MEENA, ACCOUNTANT MEMBER : ITA No.3904/Del/2011 This appeal filed by the assessee emanates from the order of the CIT (Appeals)-I, New Delhi dated 22.07.2011 for the Assessment Year 2001-02. 2. Assessee is an individual and partner in M/s. Ganga Jamuna Trading Agency and M/s. Suvidha Supplies. A search operation u/s 132 was carried out on 22.11.2006. During the search at residence of assessee, cash of Rs.27,31,000/- was found and out of which, cash of Rs.27 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e-tax Act, the Gift-tax Act and the Interest Tax Act and the liabilities determined on completion of the assessment under section 153A and the assessment of the year relevant to the previous year in which search is initiated or requisition;' is made, or the liabilities determined on completion of the assessment under Chapter XIV-B for the block period, as the case may be (including any penalty or interest payable in connection with such assessment). On going through the section 132B(1)(ii) it is very clear that this section does not state that cash seized should be considered as self assessment tax paid and be adjusted against any income-tax demand that may arise in future on the assessee. The amount of seized cash should be adjusted ag ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment of seized cash against payment of self assessment tax is a debatable issue. In fact this issue had been decided against the assessee in the case of Ramjilal Jagannath Vs. Asstt. CIT [2000] 241 ITR 758 (MP) where the court has observed that sec. 132B permits adjustment only of existing liabilities and such amount against any demand that may become due on assessments warranted by the search and it is made clear u/s 132B(1)(b). In this case, the claim of the assessee that interest u/s 234B and 234C should not be charged on the amount which has seized by Income Tax Department and was not adjusted even after a specific/request. The Court observed that the law is such that such a request of the assessee cannot be entertained, The Hon'ble M.P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 132B are clear in this regard. Thus, necessary directions should be issued to adjust the cash seized as prayed against tax liability. 2. The Learned CIT (Appeals) erred in law of fact in confirming the action of the AO of charging interest u/s 234B and 234C of the Act on Rs.27,00,000/- seized at the time of search on 23/11/06, by disregarding the judgments in Sandvik Asia Ltd. Vs ITO 280 ITR 643 (SC) and CIT Vs Pranoy Roy (2009) 309 ITR 231 (SC). Thus, necessary direction should be issued to carry out the reduction of interest as prayed. 3. The appellant craves the leave to add, substitute, modify, delete or amend all or any ground of appeal either before or at the time of hearing. 5. We have heard the assessee on these grounds and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f Ramjilal Jagannath vs. ACIT 241 ITR 758 (MP) and where the issue was related to the cash seized during the search operation u/s 132 of the Income-tax Act, 1961. The Hon'ble High Court has dismissed the assessee s petition by holding that irrespective of the seizure, the petitioners were obliged to pay advance tax in accordance with the law and if they had not paid the advance tax in view of the provisions of income-tax, they could not avoid the liability either u/s 234B or 234C. As regards the assessee s request for adjustment towards the self assessment tax, it would be useful to state that in the scheme of income-tax, the existing liability for which the adjustment can be made comes into existence only when the assessments are made an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dence of the assessee. Cash of Rs.27,31,000/- was found and out of which, Rs.27,00,000/- was seized. In the assessee s appeal, the only issue involved is taxability of the cash found of Rs.27,31,000/- at the time of the search. The assessee has filed a cash flow statement, which shows the cash balance of Rs.29,02,730/- as available on 14.11.2005. A cash flow statement of M/s. Kirti Trading Co. (firm in which wife of assessee Mrs. Prem Trehan was partner) was also filed where a deficit cash balance of Rs.11,14,119/- was shown on the date of search. As per Assessing Officer, large scale of cash payments for unaccounted purchases made, hence no credit was considered to be given for the deficit cash at the business premises of M/s. Kirti Tradin ..... X X X X Extracts X X X X X X X X Extracts X X X X
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