Kamla Mehta Vs CIT (Punjab and Haryana High Court)
Punjab and Haryana High Court held that cash seized cannot be adjusted against tax liability as advance tax and hence interest under section 234B of the Income Tax Act on delayed payment of advance tax duly leviable.
Facts- The respondent-Revenue on 17.07.2007 conducted search at different premises of both the appellants as well as one person namely Sarup Chand. Thereafter, the appellant filed her return pursuant to notice issued u/s. 153A of 1961 Act. The appellant disclosed undisclosed income of Rs.77,25,000/- as short term capital gain arising on account of sale of a residential property. The surrendered income included cash seized from the bank account of Sarup Chand.
AO framed assessment for the assessment year 2007-08 qua both the appellants herein. The assessment order was also passed with respect to tax liability of Sarup Chand. No tax liability was found of Sarup Chand though a sum of Rs.43,73,136/- was found in his bank account. The said amount was claimed by appellants as their capital gain arising out of sale proceeds of house, thus, AO requested CIT for adjustment of seized amount towards the tax liability of appellants. CIT permitted AO to adjust seized cash against tax liability of appellants. AO, accordingly, adjusted seized cash against the tax liability of appellants, however, AO charged interest u/s. 234B from both the appellants.
