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Shri Ram S Sarda Vs DCIT (ITAT Rajkot)- ITAT, Mumbai Bench in the case of Sudhakar M Shetty vs ACIT held that the department has to adjust the seized amount towards the advance-tax from the date when it was seized and accordingly directed the assessing officer to adjust the seized cash from the date of seizure. In the case under consideration we find that the assessee claimed adjustment of seized cash in the return of income filed by the assessee.
The assessee also made the request for the adjustment of cash seized against the advance-tax with effect from 21-02-2008 vide letter dated 30-07-2009. To maintain consistency we follow the above order of ITAT and we issue similar direction to assessing officer that should adjust the seized cash against advance-tax liability from the date of seizure itself.
As regards the third issue whether cash seized from third party can be adjusted against the liability of the assessee, this issue becomes academic as the cash seized from third party was found to be the cash of the assessee and this fact is not disputed. Under the circumstances, cash seized from third party or cash seized from the assessee would retain the same character, we have to hold that it does not affect processing of such seized cash. The same is to be treated as cash seized from the assessee. In the case under consideration, thee AO himself has given credit of that amount against liability created against assessee. A copy of letter dated 21-03-2011 of AO addressed to the assessee filed by the Id.AR has been placed on record. As the amount seized has been adjusted against the demand created against assessee, the interest under sections 234A, 234B and 234C have to be calculated as per the above discussion. The AO is directed accordingly.
In the light of above discussion we hold that under the facts and circumstances, the appeal is maintainable against the levy of interest u/s 234A, 234B and 234C of the Act. The cash seized is adjustable against the due liability of advance-tax. The cash seized from third party, which was ultimately found belonging to the assessee, is adjustable against the demand created on the assessee.
INCOME TAX APPELLATE TRIBUNAL, RAJKOT
I.T.A. No. 1172/Rjt/2010
(Assessment year 2008- 09)
Shri Ram S Sarda vs Dy. CIT, Cent. Cir.II
Date of pronouncement- 02-11-2011
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