ACIT, CC - I, Kolkata, Kolkata V. Anil Kumar Patwari, Paschim Medinipur

ITA 1638/KOL/2011

• Counselvise Citation: [2012] 119 COUNSELVISE.COM (IT) 7914 (ITAT-KOLKATA)
• Duration Of Justice: 8 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-08-2012
• Appeal Filed By: Department
• Bench Allotted: C
• Assessment Year: 2007-2008
• Appeal Filed On: 28-11-2011
• Court: TRIBUNAL
• Department Lawyers: L K S DEHIYA
• Assessee Lawyers: A K TIBREWAL
• Section: 143(3); 234B; 132; 154

Judgement Text

, C , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH: KOL KATA () BEFORE , /AND ! ' ! ! ' ! ! ' ! ! ' ! , ) [BEFORE SHRI PRAMOD KUMAR, AM & SHRI MAHAVIR SINGH, JM] # # # # / I.T.A NO. 1638/KOL/2011 '$% &' '$% &' '$% &' '$% &'/ // / ASSESSMENT YEAR : 2007-08 ASSISTANT COMMISSIONER OF INCOME-TAX, VS. ANIL KU MAR PATWARI C.C-1, KOLKATA. (PAN: AFGPP1094Q) ()* /APPELLANT ) (+)*/ RESPONDENT ) & # # # # / I.T.A NO. 1639/KOL/2011 '$% &' '$% &' '$% &' '$% &'/ // / ASSESSMENT YEAR : 2008-09 ASSISTANT COMMISSIONER OF INCOME-TAX, VS. M/S. DI NASOUR TRADELINK (P) LTD. C.C-1, KOLKATA. (PAN: AABCD0186E) ()* /APPELLANT ) (+)*/ RESPONDENT ) FOR THE APPELLANT: SHRI L. K. S. DEHIYA FOR THE RESPONDENT: SHRI A. K. TIBREWAL DATE OF HEARING: 01.08.2012 DATE OF PRONOUNCEMENT: 09.08.2012 , / ORDER PER MAHAVIR SINGH, JM ( ! ' ! ! ' ! ! ' ! ! ' !, , , , ) BOTH THESE APPEALS BY REVENUE ARE ARISING OUT OF SE PARATE ORDERS OF CIT(A), CENTRAL-III, KOLKATA IN APPEAL NOS. 55&14/CC-1//CIT(A)/C-III/10- 11, KOLKATA DATED 12.09.2011 AND 21.09.2011 RESPECTIVELY. ASSESSMENTS WERE FRAMED BY DCIT, CC-1, KOLKATA U/S.153A/143(3) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED T O AS THE ACT) FOR ASSESSMENT YEAR 2007- 08 AND U/S. 143(3) OF THE ACT FOR AY 2008-09 VIDE H IS SEPARATE ORDERS DATED 05.06.2009 AND 21.01.2009 RESPECTIVELY. 2. FIRST WE TAKE UP ITA NO. 1638/K/2011 FOR AY 200 7-08. THE ONLY ISSUE IN THIS APPEAL OF REVENUE IS AGAINST THE ORDER OF CIT(A) IN ALLOWING THE ADJUSTMENT OF SEIZED CASH. FOR THIS, REVENUE HAS RAISED FOLLOWING GROUND NO.1: 2 ITA 1638/K/2011 ANIL KUMAR PATWARI & ITA NO. 1639/K/2011 M/S. DINASOUR TRADELINK (P) LT D. A.Y. 07-08 & 08-09 1.IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW, THE LD. CIT(A) HAS ERRED IN HOLDING THAT THE CASH SEIZED DURING THE COURSE OF S EARCH SHOULD BE ADJUSTED AGAINST THE TAX LIABILITY ON 31.10.2007, I.E. THE DATE OF FILING OF RETURN OF INCOME CONSIDERING THAT INCOME TAX ACT DOES NOT PROVIDE FOR ADJUSTMENT OF SEIZED C ASH BEFORE DETERMINATION OF TAX LIABILITY. 3. WE HAVE HEARD RIVAL SUBMISSIONS AND GONE THROUGH THE FACTS AND CIRCUMSTANCES OF THE CASE. BRIEFLY STATED FACTS ARE THAT A SEARCH AND S EIZURE OPERATION U/S. 132 OF THE ACT WAS CONDUCTED ON THE RESIDENTIAL AND BUSINESS PREMISES OF THE ASSESSEE ON 03.05.2007 AND CASH AMOUNTING TO RS. 12 LACS WAS SEIZED ON 03.05.2007 A ND A FURTHER CASH OF RS. 21 LACS WAS SEIZED ON 31.05.2007. PURSUANT TO SEARCH, ASSESSMENT WAS FRAMED U/S. 143(3) OF THE ACT ON 20.08.2009. THE RELEVANT DETAILS AND DATES AND SEQ UENCES ARE AS UNDER: DATE OF SEIZURE AMOUNT OF SEIZURE (IN RS.) RETURN FILED U/S. RETURN FILING DATE AMOUNT ADJUSTED (IN RS.) PD ADJUSTED BY AO ON 03.05.07 & 31.05.07 12,00,000/- & 21,00,000/- 153A/139 31.10.07 12,00,000/- 20.08.09 THE ASSESSEE DURING THE RELEVANT ASSESSMENT YEAR CL AIMED RS.33 LACS AS PAYMENT OF TAX BY WAY OF ADJUSTMENT OF CASH OUT OF SEIZED CASH. THE ASSE SSEE CLAIMED ADJUSTMENT OF SUCH SEIZED CASH AGAINST INCOME TAX LIABILITY AND WAS CLAIMED AT THE TIME OF FILING OF STATEMENT OF DISCLOSURE GIVEN DURING THE COURSE OF SEARCH AS WELL AS AT THE TIME OF FILING OF RETURN UNDER INCOME-TAX ACT. THE AO HAS NOT MADE ADJUSTMENT OFSEIZED CASH WHILE FRAMING ASSESSMENT AND ADJUSTMENT WAS MADE BY AO BY WAY OF SUO MOTU RECTIFICATION IN ORDER TO ADJUST SUCH SEIZED CASH AGAINST THE TAX LIABILITY AROSE ON ACCOUNT OF DECLARATION M ADE U/S. 132 OF THE ACT. OWING TO BELATED ADJUSTMENT OF SUCH SEIZED CASH, THE AO RAISED INTER EST TAX LIABILITY U/S. 234B AND 234C OF THE ACT AND FURTHER INTEREST U/S. 220(2) OF THE ACT WAS ALSO LEVIED BY DECLARING THE ASSESSEE AS ASSESSEE IN DEFAULT. THE ASSESSEE SUBSEQUENTLY M OVED APPLICATION U/S. 154 OF THE ACT ON 21.04.2010 FOR SEEKING REMEDY AGAINST LEVY OF INTER EST U/S. 234B AND 234C OF THE ACT WHICH WAS REJECTED BY AO. THE ASSESSEE REQUESTED THE CRE DIT OF SEIZED CASH SHOULD BE ADJUSTED AGAINST THE DEMAND AND THIS REQUEST WAS GIVEN ON 31 .05.2007, WHEREIN IT IS REQUESTED AS UNDER: WE HAVE TRIED TO PROJECT A FULL AND TRUE PICTURE O N AN ESTIMATED BASIS OF ALL THE UNDISCLOSED INCOME/CAPITAL/INVESTMENTS/EXPENDITURE/ RECEIVABLE AND WE ASSURE YOU THAT WE SHALL MAKE FULL AND TRUE DISCLOSURE IN THE RETUR NS ACCORDINGLY AND PAY TAX THEREON. HOWEVER, WE REQUEST YOUR GOODSELF TO MAKE ADJUSTMEN T OF CASH SEIZED BY THE I. T DEPARTMENT AGAINST THE LIABILITIES WHICH WILL ARISE OUT OF THE RETURNS TO BE FILED BY US AS STATED ABOVE. WE ALSO UNDERSTAND THAT WE SHALL NOT BE PENALIZED IN ANY MANNER FOR GIVING THE ABOVE DISCLOSURE/VARIOUS STATEMENTS. 3 ITA 1638/K/2011 ANIL KUMAR PATWARI & ITA NO. 1639/K/2011 M/S. DINASOUR TRADELINK (P) LT D. A.Y. 07-08 & 08-09 THE CIT(A) ALLOWED THE CLAIM OF ASSESSEE DIRECTING THE AO NOT TO CHARGE INTEREST U./S. 234B, 234C AND 220(2) OF THE ACT ON THE ADJUSTED AMOUNT W .E.F. 31.10.2007. AGGRIEVED, NOW REVENUE IS IN APPEAL BEFORE US. 4. WE FIND THAT THIS ISSUE IS SQUARELY COVERED IN F AVOUR OF ASSESSEE BY THE DECISION OF HONBLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF CIT VS. ASHOK KUMAR (2011) 334 ITR 355 (P&H) WHEREIN IT IS HELD THAT THE INTEREST U/S. 234B AND 234C OF THE ACT IS CHARGEABLE ON ASSESSED TAX AFTER ADJUSTING SEIZED CASH. ACCORDIN G TO HONBLE HIGH COURT, ASSESSEE IS ENTITLED TO ADJUSTMENT OF SEIZED CASH TOWARDS ADVANCE TAX LI ABILITY FROM THE DATE OF MAKING THE APPLICATION IN THAT REGARD. THE FACTS BEFORE HONB LE HIGH COURT WAS THAT THE ASSESSEE MADE REQUEST FOR ADJUSTMENT OF ADVANCE TAX LIABILITY OF RS.3,14,312/- AGAINST THE SEIZED CASH OF RS.5.90 LACS ON 28.08.1989. SINCE FIRST INSTALMENT OF ADVANCE TAX WAS PAYABLE ON 15.09.1989 AND THE REQUEST FOR ADJUSTMENT HAVING BEEN MADE ON 28.08.1989 AND REMINDER ON 12.09.1989, IN SUCH CIRCUMSTANCES HONBLE HIGH COURT HELD THAT NO INTEREST IS CHARGEABLE U/S. 234B AND C OF THE ACT. SIMILAR ARE THE FACTS IN THE PRESENT CA SE BEFORE US THAT THE ASSESSEE REQUESTED THE CREDIT OF SEIZED CASH SHOULD BE ADJUSTED AGAINST TH E DEMAND AND THIS REQUEST WAS GIVEN ON 31.05.2007. IN SUCH CIRCUMSTANCES, OUT OF THE SEIZ ED CASH, ASSESSEE REQUESTED FOR ADJUSTMENT AGAINST ADVANCE TAX LIABILITY, BE ALLOWED TO THE AS SESSEE. BUT AO WILL RECOMPUTE THE INTEREST FOR THE BALANCE PERIOD I.E. PRIOR TO 31.05.2007 FOR CHA RGING INTEREST U/S. 234B, 234C AND 220(2) OF THE ACT. APPEAL OF REVENUE IS PARTLY ALLOWED. 5. SIMILAR ARE THE FACTS OF THE OTHER APPEAL I.E. I TA NO.1639/K/2011, TAKING THE CONSISTENT VIEW, WE DIRECT THE AO TO RECOMPUTE THE SAME ACCORD INGLY. 6. IN THE RESULT, APPEALS OF REVENUE ARE ALLOWED IN PART. 7. ORDER PRONOUNCED IN OPEN COURT ON 09.08.2012 SD/- SD/- , ! ! ! ! ' ! ' ! ' ! ' ! , (PRAMOD KUMAR) (MAHAVIR SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER ( - - - -) )) ) DATED: 9 TH AUGUST, 2012 ./ '$01 '2 JD.(SR.P.S.) 4 ITA 1638/K/2011 ANIL KUMAR PATWARI & ITA NO. 1639/K/2011 M/S. DINASOUR TRADELINK (P) LT D. A.Y. 07-08 & 08-09 , 3 ''4 54&6- COPY OF THE ORDER FORWARDED TO: 1 . )* / APPELLANT ACIT, CC-1, KOLKATA. 2 (A) +)* / RESPONDENT SHRI ANIL KUMAR PATWARI, VILL. RAGHUN ATHPUR, JHARGRAM, WEST MEDINIPUR-721507. (B) M/S. DINASOUR TRADELINK (P) LTD., 2, LAL BAZAR STRE ET, KOLKATA-700 001. 3 . ',$ ( )/ THE CIT(A), KOLKATA 4. ',$ / CIT, KOLKATA. 5 . ='> '$ / DR, KOLKATA BENCHES, KOLKATA +4 '/ TRUE COPY, ,$/ BY ORDER, ! 1 /ASSTT. REGISTRAR .