9911796707
TMI Blog2012 (7) TMI 516X X X X Extracts X X X X X X X X Extracts X X X X ..... rch at residence of assessee, cash of Rs.27,31,000/- was found and out of which, cash of Rs.27,00,000/- was seized. The assessee made an application u/s 154 of the Income-tax Act, 1961 to rectify a mistake by adjusting the seized cash with demand and also re-computing the interest charged under different sections for the Assessment Year 2001-02. This request was with reference to the earlier request dated 25.10.2007 wherein it was requested that seized sums should be considered as self assessment paid and be adjusted against any income-tax demand for Assessment Year 2001-02 that may be arisen in future on him. The Assessing Officer rejected the assessee's contention and has also observed as under :- "After going through the application dt. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... emand that may arise in future on the assessee. The amount of seized cash should be adjusted against the existing demand as on the date of search or the demand determined on completion of search assessments. The legislature has used the words "existing liability" in section 132B (l)(ii) which shows that there should be a liability against the assessee then only the money seized can be appropriated for adjustment. In other word, the amount of seized cash would have to be adjusted either against the existing demand or the demand determined on completion of the assessments u/s 153A and the assessment of the year relevant to the previous year in which search is initiated or requisition is made. In this case there was no existing demand as on th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the law is such that such a request of the assessee cannot be entertained, The Hon'ble M.P High Court has laid down the law that the seized cash can be adjusted only against the liabilities arising after completion of assessment warranted by the search. This being the position of law the issue raised by the appellant is debatable and outside the purview of sec. 154. 7. The reliance placed by the appellant on the decision of the Hon'ble Apex Court in the case of Sandvik Asia Ltd Vs ITO 280 ITR 643 (SC) and CIT Vs. Pranoy Roy (2009) 309 ITR 231 (SC)I is not applicable on the, facts of the case. The issue in Sandvik Asia Ltd was on the issue of interest due u/s 214(1) and the issue in the case of Dr. Pranoy Roy was regarding the charging o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... efore or at the time of hearing." 5. We have heard the assessee on these grounds and we have also heard the ld. DR. We have also gone through the case laws relied upon by both sides and therelevant provisions of law. We would like to state that the assessee counsel's reliance on the decision to Hon'ble Supreme Court in the case of Sandvik Asia Limited vs. CIT reported in 280 ITR 643 (SC) is of no help. In that case, the issue involved was interest due under section 214 (1) of the Income-tax Act, 1961. The Hon'ble Supreme Court reversed the order of the Hon'ble High Court by holding that the assessee was entitled to interest on the amount of interest paid u/s 214 and/or section 244 and the department was bound to grant interest which had ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the adjustment can be made comes into existence only when the assessments are made and demand is raised by way of issuing notice of demand u/s 156 of the Income-tax Act, 1961. Section 156 of the Act reads as under:- "156. When any tax, interest, penalty, fine or any other sum is payable in consequence of any order passed under this Act, the [Assessing] Officer shall serve upon the assessee a notice of demand in the prescribed form specifying the sum so payable : [Provided that where any sum is determined to be payable by the assessee or by the deductor under sub-section (1) of section 143 or sub-section (1) of section 200A, the intimation under those subsections shall be deemed to be a notice of demand for the purposes of this section.]" ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d to be given for the deficit cash at the business premises of M/s. Kirti Trading Co. to explain the cash found at the residence of the assessee. The Assessing Officer added whole of the amount to the income of assessee as unexplained cash u/s 69 of the Income-tax Act, 1961. The CIT (A) accepted the assessee's contention in respect of the negative cash balance of M/s. Kirti Trading Co. where assessee's wife, Mrs. Prem Trehan was a partner. With regard to the balance of cash of Rs.16,16,881/-, the assessee stated that it was earned from the undisclosed sources and has been offered for taxation in the Assessment Years declaring this income. The CIT (A) has observed that assessee failed to correlate the cash found with the undisclosed income f ..... X X X X Extracts X X X X X X X X Extracts X X X X
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