ITAT Delhi: Interest under section 234B of Income-tax Act deleted in appellant's favor.

The Appellate Tribunal ITAT DELHI ruled in favor of the appellant, holding that the interest charged u/s. 234B of the Income-tax Act should be deleted in the peculiar circumstances of the case. The appeal was allowed.

---

---

Issues involved:
The dispute in the present appeal is confined to the levy of interest u/s. 234B of the Income-tax Act, 1961.

Summary:

Issue 1: Levy of interest u/s. 234B of the Income-tax Act, 1961

The appellant, a resident individual, had cash amounting to Rs.1,07,00,000/- found in a locker during a search and seizure operation. The appellant offered the cash as income, but faced challenges in including it in the return of income due to system constraints. The Assessing Officer levied interest u/s. 234B alleging non-payment of advance tax. The appellant contended that the tax liability should have been adjusted from the seized cash as per section 132B of the Act, which would have prevented the levy of interest. The Tribunal noted that the tax due was only adjusted from the seized cash at a later date. Considering the circumstances and a similar case involving the appellant's brother, the Tribunal held that the interest charged u/s. 234B should be deleted, as the seized cash should have been adjusted against the self-assessment tax liability. Therefore, the Tribunal allowed the appeal and deleted the addition.

Conclusion:
The Appellate Tribunal ITAT DELHI ruled in favor of the appellant, holding that the interest charged u/s. 234B of the Income-tax Act should be deleted in the peculiar circumstances of the case. The appeal was allowed.

---