TaxTMI 
TaxTMI 
2021 (12) TMI 931
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....503, 10502 and 10501/2017-18, involving proceedings u/s. 154 of the Income Tax Act, 1961 [in short, 'the Act'], respectively. Heard both the parties. Case files perused. 2 We come to the lead assessee Shri Anand Kumar Jain's appeal ITA 416/Hyd/2021 raising the following substantive grounds : "1. The learned First Appellate Authority, in the facts and circumstances of the case, is not justified in rejecting the appellant's claim for adjustment of seized cash towards self-assessment tax for the purpose of charging interest u/s 234B of the Act in the order passed u/s 153A. 2. The learned First Appellate Authority, failed to appreciate the fact that since the appellant claimed the adjustment of seized cash as self-assessment tax, the Ld. ....
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....rest u/s 234B as per law. The relevant provisions of Section 132B which deals with application of seized or requisitioned assets are reproduced as under: 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 Expenditure-lax Act, 1987 (35 of 1987), the Gift-tax Act, 1958 (18 of 1958) and the Interest-tax Act, 1974 (45 of 1974), and the amount of the liability determined on completion of the assessment under section 153A and the assessment. of the year relevant to the previous year in which search is initiated o....
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....ing liability' does not include advance tax payable. Further, the Central Board of Direct. Taxes ('CBDT') has issued Circular No. 20/2017, date 12-6-2017 in which it has been clarified that Explanation 2 to section 132B of the Act, inserted with effect from 1-6-2013 and which states that "existing liability does not. include advance tax payable in accordance with the provisions of Part-C of Chapter XVII of the Act", shall have prospective application. The circular is brought out as under: "Subject: Applicability of Explanation :3 to Section 132B of the I. T. Act, 1961reg. - Section 132B of the Income Tax Act 1961, provides for adjustment of seized assets requisitioned assets against the amount under the Income Tax Act, 196....
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.... prospective applicability. 3. Several Courts have held that the insertion of Explanation 2 to section 132B of the Act, is prospective in nature and not applicable to cases prior to 06.2013. The SLPs filed by the Department against the judgement of the Hon'ble Punjab and Haryana High Court in the case of Cosmos Builders and Promoters Ltd'! and the Hon'ble Allahabad High Court in the case of Sunil Chandra Guptas, have been dismissed. Subsequently, the CBDT has also accepted the judgment of the Hon'ble Punjab & Haryana High Court in the case of Spaze Towers Put. Ltd. dated 17.11.2016, wherein it was held that the Explanation 2 to Section 132B of the Act is prospective in nature. 4. Accordingly, it has now been settled that ins....
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....ng credit of seized cash as advaces) to the tune of Rs. 15,795/- only The question as to whether the learned lower authorities would invoke section 154 rectification in such an instance, in our considered opinion, goes in assessee's favour and against the department. Hon'ble apex court's landmark decision in T.S. Balram Vs M/s. Volkart Brothers (1971) 82 ITR 50 (SC) has settled the law that a mistake apparent on record must be an obvious and patent one than something which could be established by a long drawn process of reasoning involving more than one opinions. The factual position is no different before us wherein the assessee's case all along has sought to treat the cash seized as self-assessment and not advance tax covered u/s 132B Exp....