The Commissioner Of Income Tax-Iii, Nagpur v. Heard.2.Following Question Has Been Pressed Intoservice Before This Court

IN THE HIGH COURT OF JUDICATURE AT BOMBAYNAGPUR BENCH AT NAGPUR INCOME TAX APPEAL NO. 74 OF 2009 (The Commissioner of Income Tax-III, Nagpur Vs. Smt. Sitadevi w/o Purananlal Agrawal & 2 others) - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Shri S. N. Bhattad, Advocate for the appellant.Shri K. P. Dewani, Advocate for the respondents. CORAM: B. P. DHARMADHIKARI ANDP. N. DESHMUKH, JJ.DATED:09 OCTOBER, 2015 Heard.2.Following question has been pressed intoservice before this Court.: Whether on the facts and circumstancesof the case and in law, the Income TaxAppellate Tribunal erred in not appreciatingthat the payment of any tax by assessee canonly be considered if the assessee has madespecific offer in this regard from the date ofmaking such offer and in absence of such anoffer, the department cannot appropriate theseized amount towards a liability proposed tobe created in future and no payment can bedeemed to have been made by the assessee till the creation of such liability?3.After hearing the learned Counsel, we findthat the Income tax Appellate Tribunal (ITAT) inparagraph 10 of its order has noted the facts. The factsshow that during search on 25/8/2004, assesseesurrendered income of Rs.2.00 crores approximately,which included cash amount of Rs.28.80 lakh. This cashamount was seized on 25/8/2004 itself. The ITAT hasfurther mentioned that this amount of Rs.28.80 lakhremained available with the Government from the dateof search and it was adjusted by Department against thetax liability arising as a consequence of search operation.The ITAT expressly noted that “subsequently” (Emphasisadded) the Commissioner of Income Tax (CIT) exercisedjurisdiction under Section 263 of the Act and withdrewdeduction under Section 80-IB.. The Assessing Officer,while giving effect to this order of CIT, recalculated theinterest chargeable under Sections 234-A and 234-B ofthe Act without giving credit for the amount of cash soseized and appropriated. 4.We find that rectification order is passed on15/12/2008 after the order of Commissioner, IncomeTax-III, Nagpur under Section 263 of the Act dated 26/12/2007. 5.The facts noted supra, therefore, clearly showthat A.O. ignored the earlier adjustment of tax liabilityagainst cash of Rs.28.80 lakh already with theDepartment from 25/8/2004. The demand for interest isfor the period from 25/8/2004 till January, 2007. Assaid amount was already appropriated towards interestby the Department itself, there is no need of any specificoffer by assessee authorizing that course of action.Assessee never objected to it and thus impliedly, ratifiedthe same. that A.O. ignored the earlier adjustment of tax liabilityagainst cash of Rs.28.80 lakh already with theDepartment from 25/8/2004. The demand for interest isfor the period from 25/8/2004 till January, 2007. Assaid amount was already appropriated towards interestby the Department itself, there is no need of any specificoffer by assessee authorizing that course of action.Assessee never objected to it and thus impliedly, ratifiedthe same. 6.It is therefore apparent that on the facts notedsupra, the question raised does not arise from the orderof ITAT. supra, the question raised does not arise from the orderof ITAT. 7.The appeal is rejected. No costs. JUDGEJUDGE