The Commissioner Of Income Tax v. Shri Ashok Kumar

ITA No. 36 of 2004 IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH The Commissioner of Income Tax Versus Shri Ashok Kumar ITA No. 36 of 2004 Date of Decision: 30.9.2010 ....Appellant. ...Respondent. CORAM:-HON'BLE MR. JUSTICE ADARSH KUMAR GOEL.HON'BLE MR. JUSTICE AJAY KUMAR MITTAL. PRESENT: Mr. Vivek Sethi, Advocate for the appellant. Mr. G.R. Sethi, Advocate for the respondent. AJAY KUMAR MITTAL, J. 1.The appeal was admitted by this Court vide order dated9.9.2004 for determination of the following substantial question of law:-“Whether the amount seized at the time of searchunder section 132 can be adjusted towards theadvance tax liability of the year during which searchhad been conducted?” 2. Briefly the facts necessary for deciding the appeal asculled out from the record are that a search was conducted at thebusiness premises of the assessee on 27.7.1989. During the course ofsearch, a cash amount of Rs.6,20,580/- was found out of whichRs.5,90,000/- was seized. The assessee surrendered a sum of Rs.5,75,000/- in his statement recorded under Section 132(4) of the Actas income for the assessment year in question. The assessee filed itsreturn on 5.3.1992 declaring an income of Rs.5,72,370/-. The assesseevide letters dated 28.8.1989 and 12.9.1989 requested that the advancetax payable in respect of the assessment year under considerationamounting to Rs.3,14,213/- may be adjusted out of cash seized and hemay not be held liable for interest under Sections 234B and 234C. Theassessee did not receive any response that the aforesaid applicationshad been rejected. However, in the assessment order, interestamounting to Rs.1,04,412/- and Rs.1,47,024/- under Sections 234A and234B was charged. Being aggrieved, the assessee filed appeal againstdeduction made and also charging of interest under Sections 234A and234B before the Commissioner of Income Tax (Appeals) [in short “theCIT (A)”] who vide order dated 5.1.1996 deleted the interest chargedunder Sections 234A and 234B of the Act. Feeling dissatisfied, thedepartment took the matter in appeal and the Tribunal vide order dated23.7.2003 dismissed the appeal which gave rise to the revenue toapproach this Court by way of instant appeal. 3.We have heard learned counsel for the parties. 4.It is not in dispute that the assessee had made a requestvide letter dated 28.8.1989 and reminder dated 12.9.1989 foradjustment out of the seized amount towards advance tax liability inrespect of the assessment year in question, i.e. 1990-91. 5.In Commissioner of Income Tax (Central), Ludhiana v.Arun Kapoor, ITA No. 149 of 2003 decided on 27.7.2010, this Courthad occasion to consider similar issue where it has been held that the ITA No. 36 of 2004 assessee is entitled to adjustment of seized amount towards advancetax liability from the date of making the application in that regard. In thepresent case, the assessee had made request for adjustment of theadvance tax liability of Rs.3,14,312/- against the seized amount ofRs.5,90,000/- on 28.8.1989. Since the first installment of advance taxwas payable on 15.9.1989 and the request for adjustment having beenmade on 28.8.1989 and reminder on 12.9.1989, no interest was exigibleunder Sections 234A and 234B of the Act. The Tribunal has rightly heldthat the assessee was entitled to adjustment of the said amount and nointerest could be charged on that basis. Therefore, no fault could befound with the approach adopted by the Tribunal. 6.Accordingly, the substantial question of law is answered infavour of the assessee and against the revenue.7.Consequently, the appeal is dismissed. (AJAY KUMAR MITTAL) JUDGE September 30, 2010gbs (ADARSH KUMAR GOEL)JUDGE