TaxTMI 
TaxTMI 
2017 (5) TMI 1423
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....uncil members of SIES (hereinafter referred to as SIES Group). The residential premises of office bearers of SIES viz. Shri V. Shankar (Ex Hon. Secretary), Shri G. Chidambaram (Ex-Treasurer), Shri G.R. Ramachandran (Ex Jt. Secretary), Shri KA Vishwanathan (Ex Managing Council Member), Shri N. Venkatanathan (Life member of SIES and personal aide of Shri Y Shankar) were also covered under section 132 of the Act. The appellant was also covered in the above mentioned search action. After the search action, return was filed on 31.07.2010 showing income of Rs. 172,80,810/- Notice u/s.153A of the Income Tax Axt 1961, was issued on 04.11.2011 calling for a true and correct return of total income to A.Y. 2010-11. N.Venkatanathan 4. During the course of search proceedings cash was found and seized from appellant's residence and bank lockers being. Panchanama dated Amount Place 11/05/2010 Rs. 51,00,000 Residence 12/05/2010 2,28,00,000 Indian Bank Locker No. 320H 14/05/2010 Rs. 67,00,000 Lakshmi Vilas Bank Locker No. 10 During the course of search proceedings statement on oath was recorded on 11/5/2010, 12/05/2010 & 14/05/2010. In stat....
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....g liability from the said seized cash of Rs. 2.28 Crores. The AO had levied interest u/s. 234B up to the date of issue of orders u/s. 143(3) rws 153A i.e. till 19.03.2013. The interest leviable u/s. 234B should have been up to 29.07.2010 i.e. when application for cash seized adjustment was made by the appellant. N.Venkatanathan The AO out of cash seized of Rs. 2.28 Crores has subsequently adjusted Rs. 113,38,628/- on 22.03.2013 against the total demands raised including interest charged up to 19.03.2013 u/s. 234B. The year wise breakup of adjustment of seized cash by department on 22.03.2013 is as under; Assessment Year Demands as per order Tax adjusted out of cash seized 2005-06 74,525 74,525 2006-07 5,80,516 5,80,516 2007-08 8,51,863 8,51,863 2008-09 12,23,361 12,23,361 2009-10 12,82,411 12,82,411 2010-11 73,11,048 73,11,048 2011-12 14,904 14,904 Total 1,13,38,628 1,13,38,628 5. Before the Ld. CIT-A assessee submitted that the cash seized u/s. 132 can be adjusted against the amount of any existing tax liability. The self assessment tax is clearly an existing liability when offer of....
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....ssessment of the person concerned from whom the money, bullion, jewellery or other valuable article or thing was seized in the course of search. Further he was required to retain in his custody such assets which was sufficient to meet the aggregate demand based on this provisional assessment and release the balance asset. The provision for provisional assessment is longer on statute. Only the assessment u/s. 153A/153C is now required to be passed. It is only when the assessment order is passed that the assessing officer can determine whether the asset seized is accounted or not and also the ownership of such asset. What if another claimant comes up to claim the money or assets later? Money credited towards an assessee's tax liability will not be available to the real and correct owner when the same is determined. In the present case the case seized was claimed to be partly belonging to South India Education Society and part of it was claimed belong to the appellant. The sources of the cash found in the search was explained to be out of capitation fee in cash charged from the students seeking admission to the courses N.Venkatanathan run by colleges under SIES. Therefore, the ....
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....xisting liability referred to in this clause may be recovered out of such asset and the remaining portion, if any, of the asset may be released, with the prior approval of the Chief Commissioner or Commissioner, to the person from whose custody the assets were seized: Provided further that such asset or any portion thereof as is referred to in the first proviso shall be released within a period of one hundred and twenty days from the date on which the last of the authorisations for search under section 132 or for requisition under section 132A, as the case may be, was executed; (ii ) if the assets consist solely 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....
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....Act does not prohibit utilization of amounts seized during the course of search towards the advance tax liability. 6.1 Furthermore in a recent decision in the case of principal CIT vs. S.K. Khindri in ITA 25 of 2016 vide order 28.02.2017 Hon'ble Punjab & Haryana High court held as under:- N.Venkatanathan We do not find any merit in the submission made by the learned counsel for the appellant-revenue. The issue has already been decided by this Court against the revenue in Income Tax Appeal No. 36 of2004 Commissioner of Income Tax Vs. Ashok Kumar, (2011) 334 ITR355 wherein it was recorded as under:- "In Commissioner of Income Tax (Central), Ludhiana Vs. Arun Kapoor, ITA No. 149 of 2003 decided on 27.07.2010,this Court had occasion to consider similar issue where it has been held that the assessee is entitled to adjustment of seized amount towards advance tax liability from the date of making the application in that regard. In the present case, the assessee had made request for adjustment of the advance tax liability of Rs. 3,14,312/- against the seized amount of Rs. 5,90,000/- on28.08.1989. Since the first instalment of advance tax was payable on 15.09.1989 and the reque....