2014 (4) TMI 247

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....ld bars weighing 6 kilograms seized on 10 December 2013 for adjustment "towards the automatic tax liability" of the first petitioner has been rejected. The Assessing Officer, while rejecting the application, has observed that such action can be taken only after the assessment is completed and a demand has been quantified against the petitioners. A search took place at the business and residential premises of the petitioners on 5 December 2013. Gold bars were seized from the locker of the second petitioner. According to the petitioners, the first petitioner has voluntarily disclosed an undislcosed income of Rs.12.01 crores during the course of the search. The locker was opened on 10 December 2013 in continuation of the search proceedings ....

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....ion of the asset has been explained, the existing liability can be recovered out of the asset. Consequently, it has been submitted that the Assessing Officer was in error in dismissing the application. Section 132B deals with the application of seized and requisitioned assets. For convenience of reference, it would be appropriate to extract Clause (i) of sub-section (1) of of Section 132B on which the controversy turns and the same is as follows:- "Application of seized or requisitioned assets. 132B. (1) The assets seized under section 132 or requisitioned under section 132A may be dealt with in the following manner, namely :-- (i) the amount of any existing liability under this Act, the Wealth-tax Act, 1957 (27 of 1957), the Ex....

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....ted legislations) and the amount of liability determined on completion of the assessment under Section 153A and the assessment of the year relevant to the previous year in which the search is initiated or the amount of liability determined on completion of the assessment under Chapter XIV-B for the block period including penalty or interest. The crucial words which are used in Clause (i) are "the amount of any existing liability" and "the amount of the liability determined". The words "existing liability" postulates a liability that is crystallized by adjudication. Similarly, a liability is determined on completion of the assessment or as the case may be, the block assessment. Until the assessment is complete, it cannot be postulated that a....