TaxTMI 
TaxTMI 
2011 (11) TMI 480
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....0,000/- and of not treating the same as advance tax being amount of voluntary payments made by the partners of the appellant firm in lieu of unexplained Jewellery found during the course of the search u/s.132 of the Act from the partners of the appellant firm between period from 6.11.2006 to 2.01.2007. 3. Without prejudice to the ground No.1 and 2 above, on the facts and in the circumstances of the case and in law the learned CIT (A)-41, Mumbai has erred in law in confirming action of the A.O. of charging interest u/s.234B and 234C of the Income Tax Act, 1961". 3. The only issue arises for our consideration and adjudication is whether in the fads and circumstance of the case interest u/s 234B and 234C is chargeable to tax or not 4. The brief facts relating to the controversy of levy of interest are as under: There was a search action in the case of the assessee u/s 132 of the I T Act on 6.11.2006. During the course of search proceedings, cash of Rs. 57,86,000/- and other documents from business premises as well as from the residence premises of the partners of the assessee firm were seized. Apart from cash and documents, unexplained jewellery were also....
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....of the assessee is Rs. 4,61,05,921/- but the Assessing Officer did not give the adjustment of Rs. 1,52,86,000/- as advance tax while deciding the petition of the assessee u/s 154. The ld AR of the assessee has further submitted that once the partners of the assessee firm requested to adjust the seized unexplained cash of Rs. 57,86,000/-and pay order of Rs. 95 lacs given in lieu of unexplained seized jewellery total amounting to Rs. 1,52,86,000/- to be adjusted against the advance tax vide their letter dated 23.4.2007, then the said amount of Rs. 1,52,86,000/- ought to have been treated as advance tax. 5.1 The ld AR of the assessee has further contended that the Assessing Officer instead of adjusting the said amount of Rs. 1,52,86,000/- as advance tax has allowed the credit of the said amount only as regular tax paid and as a result, interest u/s 234B/234C was charged. He has further contended that as per the amended provisions of law, there is no requirement to seek any request from the assessee for adjustment. However, in the case of the assessee a request was made to adjust the unexplained cash seized as well as pay orders given in lieu of the seized jewellery towards a....
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....omputations filed by the partners of Sumer Group of cases before the CIT - Central-III, Mumbai on 23.04.2007, it transpired that the cash of Rs. 57,86,000/- was seized and D.D. obtained in lieu of jewellery not seized pertain to various persons as under:- (i) Shri Manak Chand Loankar Rs. 29,00,000/- (ii) Shri Ram Ji Shah Rs. 36,75,000/- (iii) Shri Bharat K. Shah Rs. 50,21,000/- (iv) Shri Kishormal H. Shah Rs. 3,50,000 (v) Shri Sumermal H. Shah Rs. 1,00,000/- 1.8 Perusal of the assessment order in the case of the appeal ant passed u/s 143(3) dated 27.06.2008 it is seen that no ash was seized from the premise of the appellant i.e. Sumer builders, It is claimed that the person mentioned above who has requested for adjustment of cash seized or lieu jewelry are partners in the firm. However, the return of these persons were also due and unless the return is filed and assessment u/s 143(3) is completed it cannot be said that there is any surplus cash available with them. The request for adjustment of cash seized against advance tax by the assessee can be made in each individual hand only unless he files his return of income and its assessment is co....
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.... their assessment is completed u/s. 143(3) and there is no liability against them. The appellant has further relied on the decision of Hon'ble ITAT Mumbai Bench in the case of Vipul D Dosi v. ACIT 5754 (Mum.) of 1998 decided on 23.10.2000 on similar facts and not applicable in the case of the appellant. 1.12 In view of this fact, the AO has rightly rejected petition u/s 154 dated 20.2.2009. The order passed by the Assessing Officer is confirmed. The grounds of appeal no.1 to 4 are not allowed." 6.2 The CIT(A) has considered and adjudicated the issue in right prospective in the light of the relevant provisions of the Act. Even otherwise, the request for adjustment of the amount of PD has been made by the concerned persons/partners on 19.4.2007 which was after the date of payment of advance tax. Therefore, the request so made would be considered only against the regular and final tax liability of the assessee and not against the advance tax liability. 6.3 The decisions relied upon by the ld AR of the assessee are not applicable in the facts and circumstances of the case because in those cases, the amount seized was from the assessee and therefore, it was....
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....olely of money, or partly of money and partly of other assets, the Assessing Officer may apply such money in the discharge of the liabilities referred to in clause (i) and the assessee shall be discharged of such liability to the extent of the money so applied; (iii) the assets other than money may also be applied for the discharge of any such liability referred to in clause (i) as remains undischarged and for this purpose such assets shall be deemed to be under distraint as if such distraint was effected by the Assessing Officer or, as the case may be, the Tax Recovery Officer under authorization from the Chief Commissioner or Commissioner under sub-section (5) of section 226 and the Assessing Officer or, as the case may be, the Tax Recovery Officer may recover the amount of such liabilities by the sale of such assets and such sale shall be effected in the manner laid down in the Third Schedule. (2) Nothing contained in sub-section (1) shall preclude the recovery of the amount of liabilities aforesaid by any other mode laid down in this Act. (3) Any assets or proceeds thereof which remain after the liabilities referred to in clause (i) of sub-section ....