SURYANARAYAN GOPI KRISHNA,NEW DELHI vs. ACIT, NEW DELHI

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ITA 1115/DEL/2015Status: DisposedITAT Delhi01 October 2018AY 2012-134 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that cash seized prior to June 1, 2013, can be adjusted against advance tax liability, as the relevant amendment is prospective. Therefore, the seized amount should be treated as advance tax for calculating interest.

What were the facts?

During a search, Rs. 1.70 crores cash was seized from the assessee. The Assessing Officer did not adjust this seized cash as advance tax when calculating the tax demand, leading to interest charges. The CIT(A) dismissed the assessee's appeal, stating seized cash can only be adjusted against existing tax liability.

What were the issues?

Whether seized cash can be adjusted against advance tax liability when the assessment is made for a period prior to the insertion of Explanation II to Section 132B. Whether interest under Sections 234A, 234B, and 234C is leviable when seized cash is not adjusted as advance tax.

Which sections of the Income-tax Act were involved?

Section 132,Section 132B,Section 234A,Section 234B,Section 234C

AI-generated summary — verify with the full judgment below

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Income Tax Appellate Tribunal, DELHI BENCH: ‘G’ NEW DELHI

Before: SHRI H.S. SIDHU & SHRI P. MAHARISHI

For Respondent: Shri K. Tewari, Sr. DR
Hearing: 03.07.2018Pronounced: 01.10.2018

ORDER

PER PRASHANT MAHARISHI, ACCOUNTANT MEMBER:

1.

This appeal is filed by the assessee passed the order of Ld. CIT(Appeals)-XXVI, New Delhi dated 30.12.2014 for AY 2012-13. The assessee has raised in all five grounds of appeal, however, the only grievance which respect to the adjustment of seized cash of Rs. 1.70 crores not adjusted by the Assessing Officer as tax deposited – advance tax and thereby charging interest u/s 234A, B & C of the Act.

2. The brief facts of the case that assessee is an individual. Search u/s 132 of the Act was carried out on 17.01.2012 at the residential premises of the assessee. During the course of search, Rs. 1.75 crores cash was found out of which Rs. 1.70 crores was seized. The assessee filed his return on 02.12.2013 for Rs. 1,65,35,333/-. The assessment u/s 143(3) of the Act was made on 26.03.2014 at Rs. 1,78,87,607/-. The Ld. Assessing Officer while working out the tax demand has not considered the prepaid tax of cash seized of Rs. 1.70 crores. Therefore, the assessee was agreed and filed appeal before the Ld. CIT(A). The Ld. CIT(A) dismissed the appeal of the assessee holding that cash seized can only be adjusted against the existing tax liability but not towards the advance tax. Therefore, assessee aggrieved is in appeal before us.

3.

The Ld. AR submitted that now the issue is squarely covered in favour of the assessee by Circular No. 20/2017 issued by the CBDT on 12.06.2017. The Ld. DR supported the order of the Ld. CIT(A) and Assessing Officer.

4.

We have carefully considered the rival contentions and also perused the orders of the lower authorities. The issue is now squarely covered in favour of the assessee by Circular No. 20/2017 which says that Explanation II to Section 132B inserted w.e.f. 01.06.2013 is prospective in nature. Therefore, prior to 01.06.2013 it is apparent that cash seized can be adjusted against advance tax liability of the assessee. Such view is also taken by the coordinate bench in Happy Home Developers vs. ACIT 87 taxmann.com 10 (Pune). In view of the Circular of CBDT and the decision of the coordinate bench the issue is squarely covered in favour of the assessee. Accordingly, we direct the Ld. Assessing Officer to treat Rs. 1.70 crores cash seized as advance tax and adjust interest u/s 234A, B & C considering it as tax paid.

5.

In the result, the appeal filed by the assessee is allowed.

Order pronounced in the open court on 01.10.2018

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