ACIT, CC-XII, KOLKATA, Kolkata V. Sri Sanjay Kumar Sureka, Howrah

ITA 1488/KOL/2012

• Counselvise Citation: [2013] 119 COUNSELVISE.COM (IT) 2962 (ITAT-KOLKATA)
• Duration Of Justice: 4 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-03-2013
• Appeal Filed By: Department
• Bench Allotted: B
• Assessment Year: 2010-2011
• Appeal Filed On: 15-10-2012
• Court: TRIBUNAL
• Department Lawyers: SUSHANTA KR SINHA
• Keywords: Search and seizure
• Section: 143(3); 234B; 131; 132

Judgement Text

, , , IN THE INCOME TAX APPELLATE TRIBUNAL, BENCH B , KOLKATA [ () . .. . . .. . , ,, , , ! ''# $ ''# $ ''# $ ''# $ ] ]] ] [BEFORE HONBLE SRI P.K.BANSAL, AM & HONBLE SRI GEORGE MATHAN, JM] !& !& !& !& /ITA NO.1488/KOL/2012 '( )*/ ASSESSMENT YEAR : 2010-11 ($, / APPELLANT ) - - ( ./$, /RESPONDENT) A.C.I.T., CENTRAL CIRCLE-XII SRI SANJAY KUMAR SU REKA, KOLKATA -VERSUS- KOLKATA (PAN:ALWPS 8279 A) !& !& !& !& /ITA NO.1267/KOL/2012 '( )*/ ASSESSMENT YEAR : 2010-11 ($, / APPELLANT ) - - ( ./$, /RESPONDENT) SRI SANJAY KUMAR SUREKA, A.C.I.T., CENTRAL CIRC LE- KOLKATA -VERSUS- XII, KOLKATA (PAN:ALWPS 8279 A) $, 0 1 / FOR THE DEPARTMENT SHRI SUSHANTA KR.SINHA, JCIT SR.DR ./$, 0 1 / FOR THE ASSESSEE SHRI RAVI TULSIYAN, FCA 2 3 0 4 /DATE OF HEARING : 12.03.2013 5) 0 4 /DATE OF PRONOUNCEMENT : 12.03.2013. 6 / ORDER PER BENCH THE ABOVE CROSS APPEALS ARE FILED BY THE REVENUE A S WELL AS BY THE ASSESSEE AGAINST THE ORDER OF LD. CIT(A)-CENTRAL-II, KOLKATA DATED 09.07.2012 FOR ASSESSMENT YEAR 2010-11. 2. IN THE REVENUES APPEAL THE FOLLOWING EFFECTIVE GROUND HAS BEEN TAKEN :- THE LD.CIT(A) ERRED IN RECOMPUTATION OF INTEREST F OR THE BALANCE PERIOD I.E. PRIOR TO 11.10.2010 FOR CHARGING INTEREST U/S 234B. THERE W AS NO EXISTING LIABILITY OF THE ASSESSEE AS ON THE DATE OF SEARCH ON 16.02.2010 AND ON 11.10.2010 (I.E. DATE OF SUBMISSION OF RETURN). THE LIABILITY WAS DETERMINED AFTER THE COMPLETION OF THE ASSESSMENT U/S 153A/143(3) OF THE ACT. THEREFORE, THE PROVISION OF SECTION 132B(1) (I) APPLIES ONLY AFTER THE COMPLETION OF THE ASSESSMENT I.E. ON 29.12.2011. ITA NOS.1488& 1287/KOL/2012 2 2.1. IN THE ASSESSEES APPEAL THE FOLLOWING EFFECTI VE GROUNDS OF APPEAL HAS BEEN TAKEN :- 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE, THE LEARNED CIT(A) ERRED IN HOLDING THAT INTEREST WAS CHARGEABLE /S 234B OF THE INCOME-TAX ACT, 1961, TILL THE DATE OF FILING OF RETURN OF INCOME BY THE APPELLANT BEING 1 1.10.2010 WITHOUT GIVING ANY CREDIT FOR THE AMOUNT OF CASH OF RS.1,87,67,930/- SEIZED D URING THE SEARCH AND SEIZURE PROCEEDINGS TAKEN AGAINST THE APPELLANT ON 16.02.20 10 AND SUBSEQUENT DATES. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE LEARNED CIT(A) ERRED IN HOLDING THAT CREDIT IN RESPECT OF THE SEIZED AMOUNT OF RS.1 ,87,67,930/- WAS TO BE GIVEN ONLY BY WAY OF SELF-ASSESSMENT TAX AND NOT BY WAY OF ADVANC E TAX, ALTHOUGH THE APPELLANT HAD PRAYED FOR ALLOWANCE OF SUCH CREDIT AT THE TIME OF THE SEARCH & SEIZURE PROCEEDING ITSELF ON 31.03.2010. 4. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE LEARNED CIT(A) ERRED IN DIRECTING THE ASSESSING OFFICER TO RE-COMPUTE AND C HARGE INTEREST U/S 234B OF THE INCOME-TAX ACT, 1961, FOR THE PERIOD PRIOR TO THE D ATE OF FILING OF THE RETURN OF INCOME BY THE APPELLANT BEING 11.10.2010. 3. THE BRIEF FACTS OF THE CASE ARE THAT A SEARCH W AS CONDUCTED U/S 132 OF THE IT ACT IN THE CASE OF THE ASSESSEE ON 16.02.2010 DURING TH E COURSE OF SEARCH AN AMOUNT OF RS.71,30,000/- WAS SEIZED. BESIDES THIS, CASH AGGRE GATING TO RS.1,16,49,182/- WAS SEIZED FROM VARIOUS BANK ACCOUNTS STANDING IN THE N AME OF DIFFERENT FIRMS AND BANKS OWNED BY THE ASSESSEE. THE SEIZURE WAS MADE ON 12.0 4.2010 AND 13.04.2010. THUS TOTAL CASH SEIZED WAS RS.1,87,79,182/-. ON 31.03.20 10 THE STATEMENT OF THE ASSESSEE WAS RECORDED BY DDIT (INV.), KOLKATA U/S 131 OF THE IT ACT. IN THE STATEMENT RECORDED IT IS STATED THAT THE ASSESSEE DECLARED UNDISCLOSE D COMMISSION INCOME AMOUNTING TO RS.3.75 CRORES FOR THE ASSESSMENT YEAR 2010-11 AND PRAYED FOR ADJUSTMENT OF THE SEIZED CASH AGAINST THE TAX LIABILITY ON THE UNDISC LOSED INCOME OF RS.3.75 CRORES. SUBSEQUENTLY THE ASSESSEE FILED HIS RETURN ON 11.10 .2010 AND CLAIMED IN THE COMPUTATION STATEMENT ADJUSTMENT OF SEIZED CASH AS SELF ASSESSMENT TAX AMOUNTING TO RS.1,87,67,930/- CLAIMED AGAINST THE SEIZED CASH BY THE INCOME TAX AUTHORITIES AMOUNTING TO RS.18,779,185/-. THE ASSESSMENT WAS CO MPLETED U/S 143(3) OF THE IT ACT ON 29.12.2011 AT AN INCOME OF RS.3,74,98,200/- DETE RMINING THE TAX LIABILITY AT RS.1,43,20,850/- INCLUDING THE INTEREST U/S 234B OF THE IT ACT AT RS.24,12,291/-. THE ASSESSING OFFICER HAD NOT GIVEN THE CREDIT TO THE A SSESSEE FOR A SUM OF RS.1,87,67,930/- CASH SEIZED BY THE DEPARTMENT AND CLAIMED BY THE ASSESSEE AS TAX PAID IN THE STATEMENT RECORDED ON 31.03.2010 AND SU BSEQUENTLY IN THE COMPUTATION STATEMENT. THE AO ALSO CHARGED INTEREST U/S 234B OF T EH IT ACT AT RS.24,12,291/- AS ITA NOS.1488& 1287/KOL/2012 3 AGAINST THE INTEREST COMPUTED BY THE ASSESSEE AT RS .1,13,920/-. THE ASSESSEE WENT IN APPEAL BEFORE THE CIT(A). THE CIT(A) AS PER THE OBS ERVATIONS GIVEN UNDER PARA 5 AND 5.1. OF HIS ORDER DIRECTED THE AO TO TREAT THE SUM OF RS.1,87,67,930/- AS SELF ASSESSMENT TAX PAID BY THE ASSESSEE ON 11.10.2010 A ND ACCORDINGLY DIRECTED THE AO TO RE-COMPUTE THE INTEREST FOR THE BALANCE PERIOD PRIO R TO 31.10.2010 U/S 234B OF THE IT ACT. THE REVENUE HAS COME IN APPEAL IN RESPECT OF T HE RELIEF GIVEN BY THE CIT(A). WHILE THE ASSESSEE HAS COME IN APPEAL CLAIMING A SU M OF RS.1,87,79,182/- AS TAX PAID ON 31.03.2010 AS PART OF THE ADVANCE TAX AS PER THE STATEMENT RECORDED ON 31.03.2010. 4. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD ALONG WITH THE STATEMENT OF THE ASSESSEE REC ORDED U/S 131 OF THE IT ACT. WE NOTED THAT IN REPLY TO THE QUESTION NO.5 THE ASSESS EE DECLARED UNDISCLOSED COMMISSION INCOME AT RS.3.75 CRORES FOR THE IMPUGNED ASSESSMEN T YEAR AND HAS ALSO REQUESTED THE DEPARTMENT TO ADJUST THE CASH SEIZED AND CASH BALAN CE AVAILABLE IN THE BANK ACCOUNTS OF THE COMPANY AGAINST TAX LIABILITY ON UNDISCLOSED INCOME OF RS.3.75 CRORES. WE NOTED THAT IN THIS CASE A SEARCH OPERATION WAS COND UCTED IN THE CASE OF THE ASSESSEE DURING THE IMPUGNED ASSESSMENT YEAR AND CASH WAS SE IZED TO WHICH THE ASSESSEE HAS REQUESTED FOR ADJUSTMENT AGAINST THE TAX LIABILITY IN THE STATEMENT RECORDED U/S 131 OF THE IT ACT. THUS, IN OUR OPINION IF THE ASSESSEE HA D DECLARED THE INCOME DURING THE IMPUGNED ASSESSMENT YEAR THE ASSESSEE WAS ALSO LIAB LE TO PAY ADVANCE TAX AS PER LAW AND THE ASSESSING OFFICER IS REQUIRED TO FIND OUT W HETHER SUCH LIABILITY WAS EXISTING ON THE DATE OF THE SEARCH. IF SUCH LIABILITY IS EXISTI NG THEN THE ASSESSING OFFICER IS EMPOWERED TO APPLY/ADJUST THE MONEY SEIZED IN ADJUS TING THE LIABILITY EVEN WITHOUT ANY WRITTEN REPRESENTATION FROM THE ASSESSEE. IF WE LOOK INTO THE FACTS OF THE CASE THE AMOUNT DECLARED BY THE ASSESSEE AS ITS INCOME AND N OT ONLY IN THE STATEMENT RECORDED U/S 131 OF THE IT ACT ON 31.03.2010 BUT IT WAS SUBS EQUENTLY DECLARED ITS INCOME IN THE RETURN FILED. THUS THE ASSESSEE WAS REQUIRED TO PAY ADVANCE TAX ON SUCH INCOME. THUS A LIABILITY REQUIRING THE PAYMENT OF ADVANCE TAX AR ISEN DURING THE ASSESSMENT YEAR 2010-11. IN VIEW OF THIS FACT IN ACCORDANCE WITH TH E PROVISION OF SECTION 132B(1)(I) OF THE ACT, THE ASSESSING OFFICER IS BOUND TO ADJUST T HE AMOUNT SO SEIZED AGAINST THE EXISTING LIABILITY. THE ISSUE WHERE THE ASSESSEES MONEY SHOULD BE APPLIED TOWARDS THE ITA NOS.1488& 1287/KOL/2012 4 ADVANCE TAX LIABILITY OF THE ASSESSEE AND CREDIT SH OULD BE GIVEN FORM THE DATE OF SEARCH OF THE MONEY HAS BEEN DECIDED IN FAVOUR OF THE ASSE SSEE BY THE DECISION OF ITAT RAJKOT BENCH IN ITA NO.1172/RJT/2010 IN THE CASE OF SHRI RAM S.SARDA VS DCIT, CENTRAL CIRCLE-II AND THE DECISION OF THE MUMBAI BE NCH IN THE CASE OF SUDHAKAR M.SHETTY VS ACIT IN ITA NOS.4238 AND 4239/MUM/2007 AND THAT OF AHMEDABAD BENCH IN THE CASE OF ACIT VS MEGHMANI INDUSTRIES IN IT(SS)A.NO.570/AHD/2011. SIMILAR VIEW HAS BEEN TAKEN BY MUMBAI BENCH IN THE CASE OF SHRI JAFFERALI K.RATTONSEY VS DCIT. NO CONTRARY DECISION HAS BEEN BROUGHT OUT TO OUR KNOWLEDGE BY THE LD. DR. IN VIEW OF THIS FACT WE ARE OF THE FIRM VIEW THAT THE ASSESSEE SHOULD BE GIVEN CREDIT BY WAY OF ADJUSTMENT OF THE CASH SEIZE D AS ON 31.03.2010. IT IS THE SETTLED LAW THAT THE PAYMENT MADE DURING THE PREVIOUS YEAR TO THE ASSESSMENT YEAR IS REGARDED TO BE ADVANCE TAX. IN VIEW OF THIS FACT WE SET ASID E THE ORDER OF CIT(A) AND DIRECT THE AO TO GIVE CREDIT TO THE ASSESSEE IN RESPECT OF A S UM OF RS.1,87,79,185/- AS ADVANCE TAX PAID ON 31.3.2010 AND RE-COMPUTE THE INTEREST P AYABLE BY THE ASSESSEE U/S 234B OF THE IT ACT, IF ANY, IN ACCORDANCE WITH LAW. 5. IN THE RESULT THE APPEAL OF THE REVENUE AS WELL AS THE ASSESSEE STAND ALLOWED IN ACCORDANCE WITH THE DIRECTION GIVEN HEREIN ABOVE. ORDER PRONOUNCED IN THE COURT ON 12.03.2013. SD/- SD/- [ .''# $ , ] [ .., ,, , ] [GEORGE MATHAN ] [P.K.BANSAL] JUDICIAL MEMBER ACCOUNTANT MEMBER ( (( (4 4 4 4) )) ) DATE: 12.03.2013. R.G.(.P.S.) ITA NOS.1488& 1287/KOL/2012 5 6 0 .''7 87)9- COPY OF THE ORDER FORWARDED TO: 1. SRI SANJAY KUMAR SUREKA, 268/10, G.T.ROAD, LILUAH, HOWRAH PIN-711106. 2 A.C.I.T., CENTRAL CIRCLE-XII, KOLKATA. 3 . CIT KOLKATA 4 . CIT(A)-CENTRAL-II, KOLKATA. 5. CIT(DR), KOLKATA BENCHES, KOLKATA. /7 .'/ TRUE COPY, 62/ BY ORDER, DEPUTY /ASST. REGISTRAR , ITAT, KOLKATA BENCHES