TaxTMI 
TaxTMI 
2007 (10) TMI 261
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....urvey action carried out at the business premises of the petitioner. During the course of the search cash amounting Rs.1,28,34,090 was found at the business premises of the petitioner. The petitioner explained that out of the said amount, a sum of Rs.1.14 crores belonged to Bipin Vimalchand Jain, HUF carrying on business in the name of M/s. Vimalson Jewellers. Thereupon, search was carried out at the business premises of M/s. Vimalson Jewellers at 1.10 a.m. on 30/12/2006. On verification of the books of accounts maintained by M/s. Vimalson Jewellers, it was noticed that in the books there was cash balance of Rs.1,22,41,740/- but the cash actually found was Rs.8,38,980/-. The search party found a chit recording transfer of Rs.1.14 crores fro....
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...., learned counsel appearing on behalf of the petitioner submitted that once the explanation given by the petitioner that out of the seized cash a sum of Rs.1.14 crores belongs to M/s.Vimalson Jewellers and the same is verified and found to be correct, the respondent No.2 could not have retained that amount. The presumption under section 292C of the Act that the amount found during the course of search belongs to that person is rebuttable presumption and the same has been rebutted in the present case. In the absence of any existing liability the respondent No.2 could not have rejected the application of the petitioner. Mr. Inamdar further submitted that in the present case the condition precedent for retaining the seized cash are not fulfill....
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....isition is made, or the amount of liability determined on completion of the assessment under Chapter XIV-B for the block period, as the case may be (including any penalty levied or interest payable in connection with such assessment) and in respect of which such person is in default or is deemed to be in default, may be recovered out of such assets. Provided that where the person concerned makes an application to the Assessing Officer within thirty days from the end of the month in which the asset was seized, for release of asset and the nature and source of acquisition of any such asset is explained to the satisfaction of the Assessing Officer, the amount of any existing liability referred to in this clause may be recovered out of such ....
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....s and found that the explanation given by the petitioner was correct. Once the explanation given by the petitioner regarding the nature and source of acquisition of the seized cash is on verification found to be correct, then the amount of Rs.1.14 crores which belongs to M/s.Vimalson Jewellers, could not be retained by the respondent No.2 by rejecting the application filed by the petitioner. 11. Only reason given in the impugned order for rejecting the application is that the assessment under section 153A of the Act is yet to be finalised. In the absence of any material on record to suggest that the seized cash represents the undisclosed income of the assessee, the respondent No.2 could not have rejected the application made under sectio....