Interest on seized money becomes payable after the 120-day period under section 132B, satisfying the contempt proceedings.

Interest is payable on seized money under section 132B of the Income-tax Act, 1961 once the prescribed 120-day period after execution of a search or requisition authorisation expires, subject to the statutory adjustments and exceptions governing seized assets. The Delhi High Court applied that framework to treat the refunded amount as carrying interest for the relevant period, and a cheque for the calculated interest was handed over and accepted. The principal amount remained open to be sought separately from the Registrar General, and the contempt petition was treated as satisfied.

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Issues: Whether interest was payable on the seized amount under section 132B of the Income-tax Act, 1961 after the expiry of 120 days from execution of the authorisation under section 132 or requisition under section 132A, and whether the contempt petition stood satisfied.

Analysis: The statutory scheme of section 132B provides for adjustment of seized assets towards existing liabilities and mandates payment of simple interest by the Central Government on the balance amount where the period of 120 days from execution of the search or requisition authorisation has expired and the statutory conditions are met. Applying that framework, the amount directed to be refunded earlier was treated as carrying interest for the relevant period, and a cheque for the calculated interest was handed over to the petitioner and accepted. The principal amount was left open to be sought from the Registrar General.

Conclusion: Interest on the seized amount was held payable in accordance with section 132B, and the contempt petition was treated as satisfied.

Final Conclusion: The statutory liability to pay interest on the seized sum was affirmed, the interest component was released, and the contempt proceedings were brought to an end.

Ratio Decidendi: Under section 132B of the Income-tax Act, 1961, interest becomes payable on seized money after the expiry of the prescribed 120-day period, subject to the statutory adjustments and exceptions governing seized assets.

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