Dinaz A. Sethna, GANDHIDHAM V. The Asstt. Commr. Income Tax, Gandhidham Circle, GANDHIDHAM

ITA 135/RJT/2015

• Counselvise Citation: [2024] 100 COUNSELVISE.COM (IT) 4042 (ITAT-RAJKOT)
• Duration Of Justice: 8 year(s) 9 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-01-2024
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 23-01-2024
• Assessment Year: 2010-2011
• Appeal Filed On: 12-04-2015
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: I RAM S. SARDA VS. DCIT TAXMANN.COM RAJKOT
• Keywords: Principle of natural justice; Competent authority
• Section: 132; 154; 143(3); 244A; 153A; 234B; 208; 139(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL RAJKOT BENCH, RAJKOT (Conducted Through Virtual Court) Before: Shri Waseem Ahmed, Accountant Member And Shri T.R. Senthil Kumar, Judicial Member Nune Trimurtulu Rayudu PAN: ABPPR7976J Plot No. 79, Sector-2, Gandhidham-Kutch. Vs The ACIT, Central Circle-2, Rajkot. Dinaz A. Sethna PAN: AENPS9072H Rankers House, Plot No. 12, Sector-2, Gandhidham-Kutch Vs The ACIT, Central Circle-2, Rajkot Adil F. Sethna PAN: AGNPS9105R Rankers House, Plot No. 12, Sector-2, Gandhidham-Kutch Vs The ACIT, Central Circle-2, Rajkot Benaben M. Patel PAN: AMUPP0185D House No. 10, Plot No. 62, Sector-4A, Adipur Gandhidham Vs The ACIT, Central Circle-2, Rajkot N. Sujatha Rani PAN: ABPPR7975M Plot No. 79, Sector-2, Gandhidham-Kutch Vs The ACIT, Central Circle-2, Rajkot ITA Nos. 526 to 531/Rjt/2012 Assessment Year 2010-11 I.T.A Nos. 526 to 531/Rjt/2012 and Ors. A.Y. 2010-11 Page No Shri Nune Trimutulu Rayudu and Ors. vs. ACIT 2 Madhubhai B. Patel PAN: AMHPP3544M House No. 10, Plot No. 62, Sector-4A, Adipur-Gandhidham Vs The ACIT, Central Circle-2, Rajkot Appellants Respondents Dinaz A. Sethna PAN: AENPS9072H Rankers House, Plot No. 12, Sector-2, Gandhidham-Kutch Vs The ACIT, Gandhidham Circle, Gandhidham Adil F. Sethna PAN: AGNPS9105R Rankers House, Plot No. 12, Sector-2, Gandhidham-Kutch Vs The ACIT, Gandhidham Circle, Gandhidham N. Sujatha Rani PAN: ABPPR7975M Plot No. 79, Sector-2, Gandhidham-Kutch Vs The ACIT, Gandhidham Circle, Gandhidham Nune Trimurtulu Rayudu PAN: ABPPR7976J Plot No. 79, Sector-2, Gandhidham-Kutch, Vs The ACIT, Gandhidham Circle, Gandhidham Appellants Respondents Assessee Represented: Shri Tushar Hemani, A.R. Revenue Represented: Shri Shramdeep Sinha, CIT-DR Date of hearing : 24-01-2024 Date of pronouncement : 31-01-2024 ITA Nos. 135 to 138/Rjt/2015 Assessment Year 2010-11 I.T.A Nos. 526 to 531/Rjt/2012 and Ors. A.Y. 2010-11 Page No Shri Nune Trimutulu Rayudu and Ors. vs. ACIT 3 आदेश/ORDER PER BENCH:- These appeals are filed by different Assessees as against two sets of Common Appellate orders dated 30.07.2012 and 13.02.2015 passed by Commissioner of Income Tax (Appeals)-IV, Ahmedabad arising out of the assessment order passed under section 143(3) and section 154 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) relating to the Assessment Year 2010-11. The Appellants/Assessees herein are all Partners of a Firm and identical issue is involved in these appeals, therefore the same are disposed off by this consolidated order. 2. ITA No.526/RJT/2012 filed by Sri Nune Trimurtulu Rayudu is taken as the lead case. Brief facts of the case is that a search and seizure action under section 132 of the Act was conducted at the premises of the appellants on 18.03.2010. During the course of search, Cash and Fixed Deposit Receipts [FDRs] were seized, the details are as under: S.No. Name of the Appellants Cash (Rs.) FDRs (Rs.) 1 Shri Nune Trimurtulu Rayudu 5,39,000/- 99,99,999/- 2 Smt. Binaben M. Patel -- 2,00,00,000/- 3 Shri Madhubhai Bhagwanbhai Patel -- 1,20,00,000/- 4 Smt. Dinaz Adil Sethna -- 1,10,12,221/- 5 Smt. N. Sujatha Rani -- 2,99,99,997/- 6 Shri Adil Faramroz Sethna 3,50,000/- 5,15,01,000/- 2.1. The appellants vide letter dated 28-04-2010 submitted before the AO on 30-04-2010, requesting for release of disclosed Cash and FDRs seized during the course of search in terms of section 132B of I.T.A Nos. 526 to 531/Rjt/2012 and Ors. A.Y. 2010-11 Page No Shri Nune Trimutulu Rayudu and Ors. vs. ACIT 4 the Act which clearly states that as on date, there is no disputed demand that has not been paid by the assessee and the assessee is not an assessee in 'default’ as defined in the Act and therefore all the disclosed FDRs, Cash and Deed of Immovable property sought to be released and returned immediately to the assessee. It is further contended by the appellants that the seized Cash and FDRs are recorded in the books of accounts and accordingly the same are duly accounted for by the assessee in its books of account. However, no action was taken by the AO for the release of seized Cash and FDRs in terms of section 132B of the Act in spite of reminders sent by the assessees on 17.08.2010, 06.08.2010 & 09.08.2010. 2.3. The assessments in all these cases were finalized vide order dated 11-03-2011 under section 143(3) of the Act and interest u/s.234B was levied without making any adjustment of seized Cash and FDRs against the tax liability of the appellants. For better understanding, the assessment order in the case of Sri. Nune Trimurtulu Rayudu and tax computation reads as follows: “2. The assessee is having income from salary, share from partnership firms and income from other sources, Copies of audited accounts and tax audit report along with P&L account and balance sheet, which was filed originally with the return filed u/s. 139(1) were also filed. Various issues were discussed at length. 3. After verification, the total income is determined as under: Total income as per return of income Rs 22,76,780/- Total assessed income Rs 22,76,780/- Agricultural income for rate purpose Rs 1,99,560/- I.T.A Nos. 526 to 531/Rjt/2012 and Ors. A.Y. 2010-11 Page No Shri Nune Trimutulu Rayudu and Ors. vs. ACIT 5 4. Assessed u/s. 143(3) of the IT Act, 1961. Charge tax. Charge interest u/s. 234A, 234B and 234C of the IT Act, if any. Give credit for prepaid taxes after due verification. Demand notice and challan issued accordingly. 5. This order is passed after obtaining approval of the Addl. CIT, Central Range, Baroda, which was conveyed vide his approval No. 203/121 conveyed vide letter No. BRD/AddI. CIT/CR/ Approval/ 10-11 dated 11.3.2011. ” (Demand Notice under section 156 of the Act) Tax 6,20,990 Rebate 0 6,20,990 SC 0 Edu. Cess 18,630 6,39,620 234A 0 234B 35,294 234C 10,882 234D 0 244A with 0 6,85,796 Tax paid 3,45,505 Tax payable 3,40,291 3. Aggrieved against the assessment orders, the assessees filed appeals before Commissioner of Income Tax [Appeals]. The Ld CIT[A] by his common appellate order held that the appellants are entitled to the adjustment of seized Cash/FDRs against the self assessment tax liability from the said date on which the said period of 120 days is over in terms of section 132B of the Act and charge interest u/s.234B of the Act by observing as follows: “ ... 7.2 It is an undisputed fact that no specific request has been made for adjustment of seized Cash/FDRs against tax liability in I.T.A Nos. 526 to 531/Rjt/2012 and Ors. A.Y. 2010-11 Page No Shri Nune Trimutulu Rayudu and Ors. vs. ACIT 6 these cases prior to the date of filing returns of income. In the present cases, however, request for release of assets i.e, Cash/FDRs was made vide letter dt. 28-04-2010 within the allowed period of 30 days from the end of the month in which the assets were seized, explaining the source of acquisition of such assets seized. Further, subsequent reminders were also given. However, it is contended by the appellants that no action has been taken by the AO within the allowed period of 120 days for the release of such seized assets after adjustment against tax liability as per section 132B (1)(i) of the Act. In this connection, the reliance of the appellants on the decision of Hon'ble Gujarat High Court in the case of Mitaben R. Shah v. DCIT (2010) 42 DTR (Guj) 124 is quite relevant. As per the said decision, it is held that petitioner having made an application within the permissible time limit for release of seized gold ornaments and jewellery explaining the nature and source of acquisition thereof, respondents have no authority to retain these assets after the prescribed period of 120 days by rejecting the petitioner's application after the expiry period, the respondent authorities are directed to release the seized ornaments and jewellery forthwith. 7.3 In view of the above, once no action has been taken by the AO within the prescribed time limit of 120 days from the date on which last of the authorizations for search u/s 132 was executed for the release of seized assets, the seized assets cannot be legally retained by the Department once he period of 120 days is over. 7.4 In view of the above, coming to the specific request of the appellants for making of adjustment of seized Cash/FDRs towards the self-assessment tax liability of the appellants is quite justified particularly from the date, when the period of 120 days from the last date of authorization for search u/s 132 was executed, is over considering the fact that self-assessment tax liability is a continuing liability which can be paid from 1 st of April of the relevant AY upto the date of filing of return of income. Had the AO released the said Cash/FDRs seized after adjustment with the tax liability in terms of section 132B of the Act during the prescribed period, the appellants could have utilized the Cash/FDRs for the purpose of payment of self-assessment tax liability. The non-adjustment of seized Cash/ FDRs against the self-assessment tax liability of the appellants and I.T.A Nos. 526 to 531/Rjt/2012 and Ors. A.Y. 2010-11 Page No Shri Nune Trimutulu Rayudu and Ors. vs. ACIT 7 charging of interest u/s 234B of the Act for non-payment of self- assessment tax liability when the corresponding amount of seized Cash/FDRs is retained by the Department beyond the period of 120 days is simply against the principles of natural justice. In the present cases, it is submitted that period of 120 days from the last day of search concluded ends on 15-09-2010 considering the fact that last date of search concluded is on 15-05-2010. 7.5 In view of the above, I am of the considered opinion that the appellants are entitled to the adjustment of seized Cash/FDRs against the self-assessment tax liability from the said date on which the said period of 120 days is over in terms of section 132B of the Act. In view of the above, the AO is directed to give credit to the appellants for the payment of self-assessment tax out of the seized cash/FDRs with effect from the date on which 120 days gets over in terms of section 132B of the Act after due verification and charge interest u/s.234B of the Act after making above adjustments. Accordingly, this ground of appeal is partly allowed subject to above findings.” 4. Aggrieved against the common appellate orders, the assessees are in appeals before us raising the following Grounds of Appeal in ITA No.526/Rjt/2012: 1. The Ld. CIT(A) IV grossly erred in Law and on the facts of the case in not adjudicating the ground of appeal with respect to the illegality of the search & seizure operation u/s.132 and consequential illegality of the assessment order u/s.143(3) dated 11/03/2011 which was passed pursuant to such illegal search & seizure operation. a) That the impugned assessment order u/s 143(3) was passed on the basis of a search carried out u/s 132 of the Income Tax Act, 1961 at the business premises of the appellant assessee on 18/03/2010, which action has no sanctity in the eyes of law for the reason that no warrant of authorization u/s 132 was furnished to the appellant assessee till to date and therefore the search u/s 132 and subsequent assessment proceedings are null and void in the eyes of law. The appellant is not aware whether a legally valid warrant of authorization for search u/s 132 of the Income Tax Act, 1961 was issued at all in the case of the appellant assessee because the appellant had not been furnished copy of any search authorization. The appellant is also unaware whether any I.T.A Nos. 526 to 531/Rjt/2012 and Ors. A.Y. 2010-11 Page No Shri Nune Trimutulu Rayudu and Ors. vs. ACIT 8 satisfaction. note was ever recorded for authorizing search u/s 132 in the case of the appellant. b) The appellant submits that the search u/s 132 of the Income Tax Act, 1961 and the subsequent proceedings did not reveal any unaccounted/ undisclosed income for any of the assessment years, referred to in section 153A or search related assessment year, which is evident from the fact that no addition whatsoever had been made in any of the seventy assessment order passed in the group cases of the appellant. As a matter of fact, in all the assessments made u/s 153A and 143(3) for the search related assessment years, the income assessed is the same as the income returned which is based as per the books of accounts maintained by the appellant assessee. There is no addition whatsoever on account of the "UNDISCLOSED/ UNACCOUNTED INCOME' detected as a result of search or seizure of the books of accounts and documents. c) It is therefore, prayed that the assessment order under appeal passed without sanction of law deserves to be quashed. 2. The Ld. CIT(A) IV had grossly erred in law and facts in upholding the action of the AO in charging interest u/s 234B for the period up to 15/09/2010 in utter disregard to the fact that the appellant was prevented from paying the Advance Tax by the Income Tax Department which had ILLEGALLY seized the DISCLOSED FDR's of Rs.99,99,999/- during Search which was supposed to be used for payment of taxes, and the assessee immediately requested the department for the release and/or adjustment of the same towards the payment of Income tax. This request for adjusting the FDR towards income tax liability for the year under consideration was never expressly rejected by the department. The AO adjusted the FDR's on completion of the assessment and after issuing of demand notice u/s 156, by charging interest u/s 234B. In fact FDR's should be adjusted immediately when assessee expressly in writing lawfully instructed for adjustment of FDR's towards Income Tax Liability. Therefore, the learned CIT(A) is not justified in confirming the interest charged u/s 234B for the period up to 15.09.2010. It is therefore prayed that the interest charged u/s 234B may please be deleted. 3.1 The Learned CIT(A) grossly erred in Law and facts of the case in not directing the AO to release the seized Cash/FDRs which are still retained by the department despite the fact that the assessment proceedings & penalty proceedings for all the assessment years covered by the search u/s 132, including the assessment for A.Y.2010-11 had been finalized and concluded. 3.2 The Learned CIT(A) grossly erred in Law and facts of the case in not directing the AD to release the seized Cash/FDRs in accordance with the second proviso to section 1328 of the Income Tax Act which provides that I.T.A Nos. 526 to 531/Rjt/2012 and Ors. A.Y. 2010-11 Page No Shri Nune Trimutulu Rayudu and Ors. vs. ACIT 9 the assets are required to be released within a period of 120 days from the date on which the last of the authorization for search u/s 132 was executed. It is therefore prayed that the assessing officer may please be directed to release the seized cash and FDRs which are still in the custody of the department along- with interest u/s 1328(4) r.w.s. 244A of the Income Tax Act and such interest may be granted upto the date of release of the seized assets. 4 The appellant craves leave to add, amend, alter, delete, change, modify or withdraw any or all grounds of appeal before or at the time of hearing. 5. Learned Senior Counsel Sri Tushar Hemani appearing for the assessee submitted that the assessee is not pressing ground no. 1 namely legality of the search action and consequent assessment. Thus Ground No. 1 raised by the assessee is hereby dismissed. 6. Regarding Ground No. 2, Ld. Senior Counsel submitted that Section 132B of the Act provides for “Application of seized or requisitioned assets”. As per Section 132B(1)(i), amount of “existing liability” may be recovered out of the “assets seized u/s.132 or requisitioned u/s.132A”. As per 1 st Proviso to S.132B[1][i], the assessee concerned can make an application for release of assets or requisitioned assets within a period of 30 days from the end of the month in which the assets were seized. In this case, the search action was taken place on 18.03.2010 cash of Rs.5,39,000/- and FDRs of Rs.99,99,999/- were seized by the department. The assessee vide application dated 30.04.2010 requested to release or adjust the Cash and FDRs against the advance tax payable by the assessee. The assessee also sent reminders on 17.08.2010 and 09.10.2010. However the Assessing Officer has not acted upon the request to adjust the Cash and FDRs against the tax liability. I.T.A Nos. 526 to 531/Rjt/2012 and Ors. A.Y. 2010-11 Page No Shri Nune Trimutulu Rayudu and Ors. vs. ACIT 10 6.1. Ld Senior Counsel submitted that the assessment pertaining to the Assessment Year 2010-11 was completed based on the Returned Income which is accepted as the Assessed Income and no addition or disallowance made in the Assessment orders. In so far as the issue as to adjustment of "seized asset" against "existing liability" and levy of "interest u/s 234B" is concerned, the same is covered in favor of the assessee by followings judgements: (i) Shri Ram S. Sarda vs. DCIT-(2012) 17 taxmann.com 23 (Rajkot); (ii) Kanishka Prints (P.) Ltd. vs. ACIT-(2013) 34 taxmann.com 307 (Ahd); (iii) Marble Centre International P. Ltd. vs. ACIT (2020) 117 taxmann.com 208 (Karnataka); (iv) Happy Home Developers vs. ACIT-(2017) 87 taxmann.com 10 (Pune); (v) Nikka Mal Babu Ram vs. ACIT- (2010) 41 SOT 407 (Chandigarh); 6.2. As far as the issue of insertion of Explanation 2 to S.132B w.e.f. 01.06.13 being "prospective" in nature by the following Circular and judicial decisions: (i) CBDT's Circular No.20/2017 dated 12.06.17 (ii) CIT vs. Cosmos Builders & Promoters Ltd. - (2016) 76 taxmann.com 374 (P&H); (iii) CIT vs. Cosmos Builders & Promoters Ltd.(2016) 76 taxmann.com377 (SC)-SLP dismissed; (iv) CIT vs. Sunil Chandra Gupta- (2016) 76 taxmann.com 372 (All): (v) CIT vs. Sunil Chandra Gupta- (2016) 76 taxmann.com 373 (SC)- SLP dismissed. 7. Per contra, Ld. CIT-DR Shri Shramdeep Sinha appearing for the Revenue supported the orders passed by the Ld. CIT(A) and requested to up hold the same. 8. We have given our thoughtful consideration and perused the materials available on record. The details of Cash and FDRs seized I.T.A Nos. 526 to 531/Rjt/2012 and Ors. A.Y. 2010-11 Page No Shri Nune Trimutulu Rayudu and Ors. vs. ACIT 11 at the time of search, Returned and Assessed Income of the assessees, applicable Income Tax and Interest charged by the AO are as follows: Name of the Appellants Returned Income Assessed Income Tax and Edu. Cess 234BC Interest Sri Nune Trimu tulu Rayudu 22,76,780 22,76,780 6,39,620 46,176 Smt. Binaben M. Patel 22,56,080 22,56,080 6,38,419 89,718 Shri Madhubhai Bhagwan Patel 33,39,320 33,39,320 9,77,036 1,40,190 Smt. Dinaz Adil Sethna 17,69,320 17,69,320 4,44,750 34,682 Smt. N. Sujatha Rani 53,41,420 53,41,420 15,79,375 2,23,510 Shri Adil Faramroz Sethna 71,63,180 71,63,180 21,14,543 1,89,630 9. Taking into account above details, let us analyze the facts of the case with the Provisions of law. Section 132B(1) prescribes the procedure for application of assets seized u/s.132 of the Act. It prescribes that the assets seized u/s.132 can be adjusted against any “existing liability” as per IT, WT or the amount of liability determined on the completion of regular assessment or reassessment including any penalty levied or interest payable in connection with such assessment or reassessment. Let us deal with this main section little later and first consider the provisions attached with the section. I.T.A Nos. 526 to 531/Rjt/2012 and Ors. A.Y. 2010-11 Page No Shri Nune Trimutulu Rayudu and Ors. vs. ACIT 12 9.1. The first proviso to section 132B(1)(i) enables the assessee to make an application within 30 days from the end of the month in which the asset was seized. In these cases Search and Seizure action made on 18-03-2010 and Application for release/adjustment of Cash and FDRs are made 28-04-2010 which is well within the prescribed period 30 days from the end of the month in which the asset was seized. 9.2. First proviso further provides for release of the assets, the assessee is required to explain the nature and source of acquisition of such assets to the satisfaction of the AO. On such satisfaction and with prior approval of the Competent Authority, the AO is empowered to release the assets to the person from whose custody the assets were seized. It is undisputed fact that the Assessing Officer accepted the returned income as the Assessed income of the respective assessees. The seized Cash and FDRs are from the disclosed source of income from the respective assessees only and therefore no addition or disallowance made by the AO while framing scrutiny assessments u/s.143[3] of the Act. As the AO has not acted upon the Application for release/adjustment of Cash and FDRs, there was no occasion for him to record his satisfaction and prior approval from the Competent Authority for release of seized goods. 9.3. The second proviso to section 132B(1)(i) makes it clear that the assets are required to be released within a period of 120 days from the date on which the last of the authorizations for search under section 132 or for requisition under s. 132A, as the case may be, I.T.A Nos. 526 to 531/Rjt/2012 and Ors. A.Y. 2010-11 Page No Shri Nune Trimutulu Rayudu and Ors. vs. ACIT 13 was executed. In the present cases last date of search action concluded on 15-05-2010 and the outer time period of 120 days expired on 15-09-2010, but the Ld AO has not acted upon the Application for release of the seized goods and thereby retained the seized Cash and FDRs beyond the period of 120 days prescribed in the 2 nd Proviso to section 132B(1)(i) of the Act. 9.4. Now coming to the main section 132B(1) of the Act, which prescribes that the assets seized u/s.132 can be adjusted against any “existing liability” as per IT, WT or the amount of liability determined on the completion of regular assessment or reassessment including any penalty levied or interest payable in connection with such assessment or reassessment. As per this sub- section, the Ld AO ought to have adjusted against the tax liability of Rs.6,39,620/= while framing the regular assessment as against the seized Cash of Rs.5,39,000/= and FDRs of Rs.99,99,999/=. In that event also, the assessee is entitled for release of surplus FDRs seized by the Department as per section 132B [3] of the Act and therefore there is no question of levy of interest under section 234 B and C of the Act. Thus in our considered view, the Ld AO miserably failed to adhere to the provisions of section 132B[1] of the Act and the Ld CIT [A] is not justified in confirming the interest charged u/s.234B of the Act for the period up to 15-09-2010. Therefore we direct the Ld AO to rework the computation in accordance with the provisions of law after providing proper opportunity of hearing to the assessees. I.T.A Nos. 526 to 531/Rjt/2012 and Ors. A.Y. 2010-11 Page No Shri Nune Trimutulu Rayudu and Ors. vs. ACIT 14 10. In the result the appeals filed by the assessees are allowed for statistical purpose. 11. In ITA Nos. 527 to 531/Rjt/2012 filed by the assessees, wherein identical issue is involved, therefore the decision rendered in ITA No. 526/Rjt/2012 will be squarely applicable to the present appeals. Therefore the appeals filed by the assessees are allowed for statistical purposes. ITA Nos. 135 to 138/RJT/2015 12. After the first round of litigation and order giving effect to CIT[A] Order on 13-08-2012, the assessee filed rectification applications vide letter dated 28-09-2012 and 02-09-2012 that the following mistakes apparent from record: (i) Interest u/s.244A of the IT Act has not been granted on the excess payment as per the provisions of section 244A of the IT Act. (ii) Interest u/s 132B(4) of the IT Act has not been granted. 13. The Ld AO considered the above rectification applications and rejected the same by his order dated 08-10-2013 observing as follows: “... 2. So far as granting of interest u/s. 244A of the IT Act is concerned the provisions of section 244A(1)(b) are very clear in this regard. In the explanation to section 244A(1) of the IT Act it is clearly mentioned that "1) date of payment of tax or penalty means the date on and from which the amount of tax or penalty specified in the notice of demand under section 156 is paid in excess of such demand. 2) no interest shall be payable if the amount of refund is less than ten per cent of the Tax as determined sub-section (1) of I.T.A Nos. 526 to 531/Rjt/2012 and Ors. A.Y. 2010-11 Page No Shri Nune Trimutulu Rayudu and Ors. vs. ACIT 15 section 115WE or] sub-section (1) of section 143 or] on regular assessment. In the case of the assessee, notice of demand u/s.156 was issued on 13.08.2012 and seized FDRs were apportioned against the self- assessment liabilities of the assessee on 11-03-2011 as per Hon'ble CIT(A) order and refund granted of Rs.11,816/-. The refund amount was below the ten per cent of the tax as determined as per the order of Hon'ble CIT(A)'s order. Therefore, the claim of the assessee for interest u/s.244A of the IT Act is not sustainable and accordingly no interest u/s.244A of the IT Act is payable in the case of the assessee. 3. Th assessee's submission with regard to interest u/s.132B(4) of the IT Act is also considered. The same was not dealt with while giving effect to appeal order as the same was not subject matter of appeal before the CIT(A)-IV, Ahmedabad. Therefore, not granting interest u/s.132B(4) of the IT Act while giving effect to appeal order cannot be said to be mistake apparent from records. However, the issue relating to allowbility of interest u/s. 132B(4) of the IT Act is also considered. The FDRs were seized from the premises of the assessee on 18-03-2010. The period of 120 days expires on 20-07- 2010. The payment has been deemed as self-assessment tax liability and substantial relief in interest u/s.234B of the IT Act has also been granted as per the directions of the CTT(A). Since the said FDRs are deemed to have been apportioned against the self-assessment tax liability of the assessee, prior to expiry of 120 days, from the date of seizure, interest u/s 132B(4) of the IT Act is not allowable. Therefore, also the claim of the assessee for interest u/s.132B(4) of the IT Act is not sustainable and accordingly no interest u/s. 132B(4) of the IT Act is payable in the case of the assessee. 5. In view of the above, assessee's application u/s 154 is rejected.” 14. Aggrieved against the rectification orders, the assessee filed appeal before Commissioner of Income Tax [Appeals]. The Ld CIT[A] by his appellate order held that the by mere seizure of the FDs, the appellant has not suffered any pecuniary loss by way of loss of I.T.A Nos. 526 to 531/Rjt/2012 and Ors. A.Y. 2010-11 Page No Shri Nune Trimutulu Rayudu and Ors. vs. ACIT 16 interest, therefore, no interest u/s.132B(4) can be granted to the assessee by observing as follows: “...4.4 I have carefully considered the contention of the appellant. The only issue required to be decided upon is whether the appellant is entitled to interest u/s.132B(4) on the unutilised seized FDs after 120 days. It would be very relevant to reproduce s.132B(4) of the I. T. Act, 1961 before proceeding further. Section 132B(4) reads as under.- (4) (a) The Central Government shall pay simple interest at the rate of [one- half per cent for every month or part of a month] on the amount by which the aggregate amount of money seized under section 132 or requisitioned under section 132A, as reduced by the amount of money, if any, released under the first proviso to clause (i) of sub-section (1), and of the proceeds, if any, of the assets sold towards the discharge of the existing liability referred to in clause (1) of sub-section (1), exceeds the aggregate of the amount required to meet the liabilities referred to in clause (i) of sub-section (1) of this section. (b) Such interest shall run from the date immediately following the expiry of the period of one hundred and twenty days from the date on which the last of the authorizations for search under section 132 or requisition under section 132A was executed to the date of completion of the assessee [under section 153A or) under chapter XIV-B" 4.5 Careful perusal of the section indicates that interest has to be paid on the aggregate amount of money seized u/s 132 "Money' is a separate and distinct entity as per the Income Tax Act, 1961. In s.132(1)(c) reads "Any person is in possession of any money, bullion, jewellery or other valuable article". Hence, money is different from bullion, jewellery or other valuable article. In the case of Anilkumar Kedia vs. Settlement Commission 33 taxmann.com 624, the Hon'ble Madras High Court has held as under: "Therefore, while the powers given to the authorities under sections 132(1) and 132A are wider relating to the seizure of I.T.A Nos. 526 to 531/Rjt/2012 and Ors. A.Y. 2010-11 Page No Shri Nune Trimutulu Rayudu and Ors. vs. ACIT 17 money and other assets, section 132B(4)(a) imposes an obligation on the Government to pay interest only in respect of those seized matters which are either money or being reduced into the amount of money. The term "money" is not defined in the Income-tax Act In respect of payment of advance tax under section 234B of the Act, the assessee in liable to pay interest on the amount of tax. The word, "amount" used under the said provision has to be necessarily construed to mean "cash". Such cash seized under section 132(1) of the Act. if not utilized even for payment of advance tax which falls due after seizure of cash, also would come within the term "money" for the purpose of enabling the assessee to claim interest under section 132B(4)(a) of the Act. Therefore, in the absence of the words like, assets or shares which are capable of being reduced into the value of money, specifically incorporated in the said provision, it is not possible to accept the contention of the learned counsel for the petitioner that the shares seized should also be treated as money. Therefore, the construction for the purpose of payment of interest under the said provision, viz, section 132B(4)(a) shall be only in respect of money which has been seized in the form of cash or any other assets like, bullion which are capable of being assessed in terms of cash, which can alone be covered for the purpose of payment of interest. The shares held by the petitioner which were seized may form part of capital assets of the business in his day-to-day business, but that will become money only if the amount contemplated under the shares is encashed and that encashment from the shares requires the process of sale to ascertain their value and, in my considered view, it cannot be stated to be either "money" or "assets" which can be reduced into money." 4.6 From the above decision, it is clear that money is equated with hard cash which is seized. All the decisions relied upon by the appellant are also in respect of cases where cash was seized and not utilised. In none of the cases referred to by the appellant, the FDs have not been seized. The question which now requires to be answered is that whether an FD is an asset which can be reduced I.T.A Nos. 526 to 531/Rjt/2012 and Ors. A.Y. 2010-11 Page No Shri Nune Trimutulu Rayudu and Ors. vs. ACIT 18 into money as held by the Hon'ble Madras High Court. While this may be generally true, the situation in case of FD which has been seized is quite different. If the FD was prematurely encashed and the proceeds deposited in the PD account of the CIT, the assessee would definitely be entitled to interest u's 132B(4) as the case may be. However, in the present case, the FDs were only seized and not prematurely encashed. The government has thus worked only as a custodian of the FDs. The FDs have continued to have claimed interest from the banks. No restriction on the same was placed by the department. When the FDs were receiving the interest from the bank and not lying idle, they definitely cannot be construed to be money as contemplated in s.132B(4). By mere seizure of the FDs, the appellant has not suffered any pecuniary loss by way of loss of interest. Therefore, no interest u/s. 132B(4) can be granted to the appellant. This point has not been considered by the Ld. CIT(A) in the appellant's group cases in the appeal order on this issue and therefore I respectfully beg to differ from the ratio decidindi of that order. The A.O's action of rejecting the application u/s.154 is upheld. The grounds of appeal are dismissed.” 15. Aggrieved against the appellate orders, the assessees are in appeals before us raising the following Grounds of Appeal in ITA No. 138/Rjt/2015: 1. The Ld. CIT(A) has erred in law and on facts of the case in confirming the actions of Ld. AO in not granting interest u/s 132B(4) of the Act on seized asset viz. FDR as per the law. 2. The Ld. CIT(A) ought to have appreciated the fact that seized FDR was encashed and adjusted towards the liability determined on completion of assessment of the year relevant to the previous year in which search is initiated and such liability is covered u/s 132B(1) of the Act. 3. The Ld. CIT(A) ought to have appreciated that any surplus created out of adjustment of seized asset after discharging liability u/s 132B(1) shall be eligible for interest u/s 132B(4) of the Act. 4. Without prejudice to the above the Ld. CIT(A) has erred in law and on facts of the case in holding that FDR is not included within the definition of "money". I.T.A Nos. 526 to 531/Rjt/2012 and Ors. A.Y. 2010-11 Page No Shri Nune Trimutulu Rayudu and Ors. vs. ACIT 19 5. Alternatively and without prejudice to the above if the above claim is accepted the appellant is entitled to interest u/s 132B(4) for Rs.3,68,829/- instead of Rs.3,16,139/-. In the facts and circumstances of the case the appellant is entitled to interest u/s 132B(4) for a period of 7 months instead of 6 months. 6. Both the lower authorities have passed the orders without properly appreciating the facts and that they further erred in grossly ignoring various submission, explanations and information submitted by the appellant from time to time which ought to have been considered before passing the impugned order. The action of the lower authorities is clear breach of law and Principles of Natural Justice and therefore deserves to be quashed. 16. Ld. Senior Counsel Shri Tushar Hemani appearing for the assessee submitted that since FDRs were seized during the course of search and were released after completion of assessment, the assessees are eligible for interest u/s.132B[4] of the Act. The Ld CIT[A] denied the benefit of interest u/s.132B[4] broadly on the count that section 132B[4][b] refers to “money” which does not include “FDRs”. Our attention was invited to section 132[1][iii] wherein also, FDRs are not specifically included, however Department treats FDRs as “money” for the purpose of seizure, then same view should be adopted for the purpose of granting interest u/s.132B[4] of the Act. The Ld Counsel relied upon decision of the Delhi High Court in the case of Ajay Gupta -Vs- CIT reported in 297 ITR 125 [Del]. Thus pleaded that FDRs would fall within the ambit of “money” and resultantly, the assessee shall be eligible for claiming interest u/s.132B[4] of the Act. 17. Per contra, Ld. CIT-DR Shri Shramdeep Sinha appearing for the Revenue supported the orders passed by the Ld. CIT(A) and also clarified that seized FDRs were not treated as “money” but as “other valuable article or things” as provided under section I.T.A Nos. 526 to 531/Rjt/2012 and Ors. A.Y. 2010-11 Page No Shri Nune Trimutulu Rayudu and Ors. vs. ACIT 20 132[1][iii] of the Act. Further seized FDRs continue to earn interest from the Bank or Financial Institution, therefore FDRs cannot be equated with “Money” and no question of granting interest u/s.132B[4] of the Act and requested to uphold the order of the lower authorities and dismiss the appeals filed by the asseessees. 18. We have carefully considered the submissions of the rival parties and perused the provisions of law. Section 132(1)(c) of the Act reads "Any person is in possession of any Money, Bullion, Jewellery or Other Valuable Article or Things". Hence, Money is different from bullion, jewellery or other valuable article or things. Seized FDRs cannot be treated as “Money”, but only as “Other Valuable Article or Things”. As per section 132B[4][a] of the Act, the assessee is entitled to interest on the amount by which the aggregate amount of “Money” seized after 120 days. Thus the arguments of the assessee are not in consonance to the provisions of law and the same is liable to be rejected. The case law of Ajay Gupta -Vs- CIT relied by the assessee is not relating to seizure of FDRs but of “Money” and hence not applicable to the facts of the present case. Whereas the Madras High Court judgment in the case of Anil Kumar Kedia (cited supra) which was relied by the Ld. CIT(A) is squarely applicable to the facts of the present case. Thus we do not any infirmity in the orders passed by the lower authorities and the same does not require any interference and the assessee appeals are hereby dismissed. 19. In the result the appeal filed by the assessee is hereby dismissed. I.T.A Nos. 526 to 531/Rjt/2012 and Ors. A.Y. 2010-11 Page No Shri Nune Trimutulu Rayudu and Ors. vs. ACIT 21 20. In ITA Nos. 136 to 138/Rjt/2015 filed by the assessees, wherein identical issue is involved, therefore the decision rendered in ITA No. 135/Rjt/2015 will be squarely applicable to the present appeals. Therefore the appeals filed by the assessees are dismissed. Order pronounced in the open court on 31 -01-2024 Sd/- Sd/- (WASEEM AHMED) (T.R. SENTHIL KUMAR) ACCOUNTANT MEMBER True Copy JUDICIAL MEMBER Ahmedabad : Dated 31/01/2024 आदेश कȧ ĤǓतͧलͪप अĒेͪषत / Copy of Order Forwarded to:- 1. Assessee 2. Revenue 3. Concerned CIT 4. CIT (A) 5. DR, ITAT, Ahmedabad 6. Guard file. By order/आदेश से, उप/सहायक पंजीकार आयकर अपीलȣय अͬधकरण, राजकोट