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TMI Blog2016 (5) TMI 1363X X X X Extracts X X X X X X X X Extracts X X X X ..... ction 132B of I.T. Act which clarifies that existing liability does not include advance tax payable. 3. The order of CIT(A) may be vacated and that of the Assessing Officer be restored. 4. The appellant craves leave to add, alter, amend and modify any of the above grounds of appeal." 3. Briefly stated, the assessee is an individual who inter-alia derived income from partnership firm. A search action under section 132 of the Act was conducted on the residential premises of the assessee on 21.01.2004. During the course of search, cash of Rs. 76,00,000/- and jewellery of Rs. 82,32,047/- was seized. In response to notice under section 153A of the Act, the assessee had filed a return disclosing an amount of Rs. 1,60,02,180/- as income for the assessment year 2004-05. The assessment under section 143(3) r.w.s. 153A of the Act was completed accepting the returned income. The additions/disallowances made by the Assessing Officer were accepted by the assessee. However, interest charged under section 234B & 234C of the Act were contested before the CIT(A). In the meanwhile, the assessee vide letter dated 13.03.2004 requested the Assessing Officer to adjust the advance tax liability for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecision in the case of Shri Lodha Vijay Shantilal, ITA No. 80 & 81/PN/2008 for AY 2004-05 & 2005-06 order dated 16th April 2008. ITAT 'A' Bench Pune wherein we have cited two decisions of respected co ordinate Benches in the following manner reproduced below:- Extracted from Head Note:- Held 'Seizure of asset is certainly a recovery from the assessee and the order under sub section (5) of section 132 furnishes to the assessee on account of liabilities and how seized assets are to be adjusted against the liabilities of the assessee for the current year or some other year. It is difficult to appreciate that despite the directions to adjust seized amount under section 132(5) against the liabilities of the account above adjustments and make payment otherwise due. The assessee should treat statutory provision and orders passed there under and amount recovered and retained as of no consequences. This approach defies all logic and rationality. It is, therefore, only reasonable to allow the assessee to the credit for the seized amount as per recovery made by the revenue authority and make payment accordingly. There is no basic difference between 'payment' or ' ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lating the interest u/s 234B & 234C of I. T. Act." 3.2.1 In the case of Ram Sarda Vs DCIT (cited supra), the Rajkot ITAT has held as under : "15. .................................................................................................. The expression existing liability in s.132B(1)(i) cannot be read to exclude a particular tax liability if it can be shown to have existed on a particular date. If the liability to pay, the advance tax had arisen it would certainly constitute a part of existing liability as per s.132B(1)(i). According to the scheme of s. 132B, the seized assets to be applied to the discharge of existing liabilities in respect of which the assessee was in default or was deemed to be in default as well as the liability in respect of regular assessment or reassessment for the years relevant to the previous years to which the income related and in respect of which the assessee was in default or was deemed to be in default. However, during the search, money had been seized and retained by the Revenue, such money can be applied for the discharge of both liabilities. On the other hand, if money seized was not sufficient for the purpose of discharge of the liab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of law, there is no requirement to seek any request from the assessee for adjustment. However, in the present case, the assessee has requested to adjust the remaining cash seized during the search against the tax liability of the assessee. Therefore, the Department has to adjust the amount seized at the time of search towards the advance tax etc., from the date when the amount was seized. It is incorrect on the part of the AO, who has taken into consideration the adjustment from the date of assessment. It is a matter of commonsense that once the amount is lying with the Department that has to be adjusted; otherwise where it will be adjusted and in which account the Department will keep the amount. The same has to be adjusted against any demand raised against the assessee or against any demand which is pending before the date of search. In view of the above facts and circumstances the AO is directed to adjust the remaining cash seized by the Department from the date of seizure because if any amount is to be adjusted against any liability the date of payment of that liability shall be the date of seizure and not the date of adjustment and/or the date of order .." 3.2.4 Similar vie ..... X X X X Extracts X X X X X X X X Extracts X X X X
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