A search was conducted at premises of assessees, and one Sarup Chand. Department discovered cash in Sarup Chand’s accounts. Both Sarup Chand and assessees vide an affidavit claimed that seized money actually belonged to assessees as part of house sale proceeds. Assessees requested that cash be adjusted against their tax liabilities. However, until assessment of both parties was completed, cash was treated as belonging to Sarup Chand.  Revenue eventually adjusted cash against assessees tax liability but charged interest for delayed payment of tax under section 234B  of the Act. Assessee contended  that cash should have been adjusted earlier as advance tax and that no interest should be charged. The AO has not accepted the contention of the assesse.  On appeal the CIT(A) held that  the money seized from Sarup Chand could not be adjusted against the assesee’s advance tax liabilities. Tribunal affirmed the order of CIT(A). On appeal the Court held that in view of sub-section (3) of Section 132B, person from whose custody assets are seized is entitled to adjustment thereof against tax liability and as per explanation, existing liability does not include advance tax. Thus, contention of assessees that amount seized from possession of another person should be treated as advance tax paid by assessees was misconceived. Since seized cash was concededly lying deposited in bank account of Sarup Chand therefore, till determination of liability of all parties, there was no question of adjustment of seized cash against liability of assessees and accordingly, they were liable to pay interest in terms of Section 234B on account of delayed payment on advance tax. Appeal of  assessee is dismissed.   (AY. 2007-08)