2010 (12) TMI 1296 - AT - Income Tax

ITAT upholds CIT(A)'s order adjusting seized cash against advance tax, interest recomputed per sec. 234B & 234C

The ITAT dismissed the revenue's appeal and upheld the CIT(A)'s order directing the AO to adjust the seized cash against the advance tax liability from ... - Issues involved: Appeal against order u/s 154 of the Income-tax Act, 1961 for Assessment Year 2009-10.Summary:The only issue raised in the appeal was whether the CIT(A) erred in directing the AO to recomputed the levy of interest u/s 234B and 234C by adjusting the seized cash against the advance tax liability of the assessee.In this case, a search u/s 132 of the Act was conducted, and cash amounting to Rs. 90 lakh was seized. The assessee requested to adjust the seized cash against the tax liability for the assessment year 2009-2010. The return filed showed total income of Rs. 3,09,60,420/- with tax payable of Rs. 81,87,091/-. The AO created a demand of Rs. 83,55,014/- without allowing the adjustment sought by the assessee from the seized cash.The assessee filed an application u/s 154 challenging the AO's order. The AO, in the rectification order, allowed the credit of seized cash only from September 2009 and charged interest u/s 234B and 234C. The assessee appealed to the CIT(A) against this order.The CIT(A) directed the AO to adjust the seized cash against the advance tax liability from the date of request and recomputed the interest u/s 234B and 234C. The department appealed this decision.The ITAT held that the seized cash was to be adjusted against the advance tax liability, following precedents and the decision of the Delhi High Court. The interest under sec. 234B and 234C was to be computed accordingly. The appeal by the revenue was dismissed, upholding the CIT(A)'s order with the mentioned observations.