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Income Tax Appellate Tribunal, HYDERABAD BENCHES “A” : HYDERABAD
Before: SHRI S.S.GODARA & SHRI LAXMI PRASAD SAHU
PER S.S.GODARA, J.M. : The instant batch of three cases pertains to a single assessee M/s.Sri Venkatesh Granites Pvt. Ltd. herein. The Revenue’s appeal arises against the CIT(A)-11, Hyderabad’s order dt.19-03-2018, passed in case No.0303/2017-18/DCIT-Central Circle-1(2), Hyd/CIT(A)-11, Hyd/17-18. Its next appeal followed by assessee’s cross- appeal ITA Nos.1251/Hyd/2018 and 1278/Hyd/2018 are directed against CIT(A)-11, Hyderabad’s order(s) dt.19-03- 2018, passed in case No.0019/2017-18/DCIT-Central Circle-
:- 2 -: 1251 & 1278/Hyd/2018 1(2), Hyd/CIT(A)-11, Hyd/17-18, relevant proceedings are u/s.143(3) in first and u/s.271AAB of the Income Tax Act, 1961 [in short, ‘the Act’] in latter twin cases; respectively. Heard both the parties. Case files perused.
Coming to the Revenue’s quantum appeal we find that its sole substantive grievance seeks to revive the Assessing Officer’s action denying application of seized cash during survey on 25-02-2014.
Learned CIT-DR vehemently reiterated the Revenue’s pleadings that the CIT(A) has erred in law and on facts in holding the assessee’s cash seized as eligible for adjustment against advance tax along with Section 234A, 234B and 234C interest(s) involving varying sums. She quoted Section 132B, Explanation-2 inserted in the Act, vide Finance Act, 2013 w.e.f.01-06-2013 that an “existing liability” does not include advance tax payable in accordance with the provisions of part- C. She further sought to buttress the point that the CBDT has also issued its circular dt.06-12-2017 throwing ample light on the issue and therefore, the Assessing Officer had rightly denied the impugned adjustment relief.
Learned authorised representative on the other hand has drawn strong support from the CIT(A)’s findings under challenge. She first of all stated that the survey in question involved cash seizure of Rs.2.1 crores. The assessee filed its letter dt.02-12-2014 requesting the department to adjust its seized cash against advance tax liability. And that the CIT(A)’s lower appellate order under challenge has granted the impugned relief to the extent of the latter three heads of :- 3 -: 1251 & 1278/Hyd/2018 Section 234A, 234B and 234C interest(s) only in paras 4.1 and 5 in pg.10 and 11 of his order. The vexed question that arises for our apt adjudication therefore is as to whether the foregoing three heads i.e., Sec. 234A, 234B and 234C interest(s) deserve to be adjusted against the seized cash or not? Our adjudication to the same goes in assessee’s favour and against the department. This is for the reason that Section 132(B)(1)(i) itself includes “the amount of liability determined on completion of the assessment u/s.153A and the assessment of the year relevant to the previous year in which search is initiated or requested is made ………….. or interest payable in connection with such assessment”. That being the statutory position, we hold that the clinching statutory expression “advance tax” (supra) in Explanation-II thereof does not deemed to have included any interest which is already treated as allowable in sub-section (1)(i) herein above. We therefore find no merit in the Revenue’s sole substantive grievance going by the principles of stricter interpretation as per hon'ble apex court’s recent landmark judgment in Commissioner of Customs Vs. Dilip Kumar (2018) 9 SCC 1 (FB)(SC). We thus adopt the very principle mutatis mutandis to reject Revenue’s instant sole grievance as well as the earlier appeal ITA No.1250/Hyd/2018.
Next comes the Revenue’s and assessee’s cross appeals and 1278/Hyd/2018 dealing with Section 271AAB penalty issue. Suffice to say, it transpires at the outset that the Assessing Officer’s penalty order dt.31-08- 2016 had nowhere specified as to whether the alleged un- disclosed income satisfied that the corresponding statutory
:- 4 -: 1251 & 1278/Hyd/2018 parameters prescribed in Section 271AAB, Explanation (C)(i)(A) & (B) and (ii) “not been recorded or before the date of search in the books of accounts or other documents maintained in the normal course relating to such previous year or otherwise not disclosed before the specified authority (ies) or it had surfaced, either wholly or partly by ……….. in respect of expense recorded…….” We therefore find no reason to sustain the impugned Section 271AAB penalty as well for this sole reason alone. The Revenue’s appeal fails and assessee’s cross appeal succeeds therefore.
To sum-up, both the Revenue’s appeals 1250 & 1251/Hyd/2018 are dismissed and assessee’s appeal is allowed. A copy of this common order be placed in the respective case files.