{"id":4106,"date":"2011-12-29T09:28:13","date_gmt":"2011-12-29T09:28:13","guid":{"rendered":"http:\/\/itatonline.org\/archives\/?p=4106"},"modified":"2011-12-29T09:28:13","modified_gmt":"2011-12-29T09:28:13","slug":"ram-s-sarda-vs-dcit-itat-rajkot-s-132-cash-seized-in-search-has-to-be-adjusted-against-advance-tax","status":"publish","type":"post","link":"https:\/\/itatonline.org\/archives\/ram-s-sarda-vs-dcit-itat-rajkot-s-132-cash-seized-in-search-has-to-be-adjusted-against-advance-tax\/","title":{"rendered":"Ram S. Sarda vs. DCIT (ITAT Rajkot)"},"content":{"rendered":"\n\n
Click here to download the judgement (ram_sharda_132_cash_advance_tax.pdf) <\/strong> <\/a><\/p><\/td>\n<\/tr>\n<\/table>\n


\nS. 132: Cash seized in search has to be adjusted against \u201cAdvance Tax\u201d
\n<\/strong><\/p>\n

Pursuant to a search u\/s 132, cash was seized from the assessee and third parties and assessed as the assessee\u2019s income. Though the assessee requested that the said seized cash be treated as payment of \u201cadvance tax\u201d, the AO ignored the same and levied interest u\/s 234A, 234B & 234C on the basis that advance tax had not been paid<\/em>. On appeal, the CIT (A) relied on Central Provinces Manganese<\/strong> 160 ITR 961 (SC) and held that the ground was not maintainable. It was also held that cash seized from third parties could not be treated as the assessee\u2019s payment of advance tax<\/em>. On appeal by the assessee, HELD allowing the appeal:<\/p>\n

(i) S. 246 permits an appeal to be filed when the assessee \u201cdenies his liability to be assessed<\/em>\u201d. The levy of interest u\/s 234A to 234C is a part of the process of assessment. The expression \u201cdenies his liability to be assessed<\/em>\u201d does not mean a total denial of liability. Even a partial denial of the assessment i.e. of the liability to pay interest is covered and the appeal is maintainable<\/strong> (C. P Manganese<\/strong> 160 ITR 961 (SC) explained, Kanpur Coal Syndicate<\/strong> 53 ITR 225 (SC) & JK Synthetics<\/strong> 119 CTR 222 (SC) followed);<\/p>\n

(ii) On merits, s. 132B (1) provides that the assets seized u\/s 132 may be adjusted against the amount of any \u201cexisting liability<\/em>\u201d and the liability determined on completion of the assessment. The expression \u201cexisting liability\u201d cannot be ascribed a restricted meaning. The liability to pay advance tax is an \u201cexisting liability\u201d and so the cash seized ought to have been adjusted against that liability<\/strong>. The cash seized from third parties, having been assessed in the assessee\u2019s hands, retains the same character as cash seized from the assessee (Sudhakar Shetty<\/strong> 10 DTR (Mum) 173 followed). <\/p>\n

<\/p>\n","protected":false},"excerpt":{"rendered":"

On merits, s. 132B (1) provides that the assets seized u\/s 132 may be adjusted against the amount of any \u201cexisting liability<\/em>\u201d and the liability determined on completion of the assessment. The expression \u201cexisting liability\u201d cannot be ascribed a restricted meaning. The liability to pay advance tax is an \u201cexisting liability\u201d and so the cash seized ought to have been adjusted against that liability<\/strong>. The cash seized from third parties, having been assessed in the assessee\u2019s hands, retains the same character as cash seized from the assessee (Sudhakar Shetty<\/strong> 10 DTR (Mum) 173 followed)<\/p>\n

Read more ›<\/a><\/div>\n

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