DCIT CEN CIR 40, MUMBAI V. SANTOSH SHAHRA, MUMBAI

ITA 172/MUM/2014

• Counselvise Citation: 17219914 RSA 2014
• Duration Of Justice: 1 year(s) 5 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-06-2015
• Appeal Filed By: Department
• Bench Allotted: E
• Assessment Year: 2006-2007
• Appeal Filed On: 07-01-2014
• Court: TRIBUNAL
• Department Lawyers: NEIL PHILIP
• Assessee Lawyers: RONAK DOSHI
• Keywords: Rectification of order
• Section: 132; 154; 153A

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL E , BENCH MUMBAI . . , , BEFORE SHRI R.C.SHARMA , A M & MS. SUSHMA CHOWLA , J M ./ I TA NO. 172 / MUM/20 1 4 ( / ASSESSMENT YEAR : 200 6 - 0 7 ) DCIT, CENT. CIRCLE - 40, MUMBAI VS. SHRI SANTOSH SHAHRA, FLAT NO. 2, 1 ST FLOOR, SHARDA BUILDING, CHURCHGATE, MUMBAI - 400020 ./ ./ PAN/GIR NO. : A HCPS 4586 Q ( / AP PELLANT ) .. ( / RESPONDENT ) /REVENUE BY : SHRI NEIL PHILIP /ASSESSEE BY : SHRI RONAK DOSHI / DATE OF HEARING : 11 /0 6 / 2015 / DATE OF PRONOUNCEMENT /06 /2015 / O R D E R PER R.C.SHARMA (A.M) : THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER CIT (A), FOR THE ASSESSMENT YEAR 200 6 - 0 7 , IN THE MATTER OF ORDER PASSED U/S. 154 OF THE INCOME TAX ACT. 2 . IN THIS APPEAL, THE REVENUE IS AGGRIEVED BY THE DI RECTION OF THE CIT(A) FOR ADJUSTING SEIZED CASH DURING THE COURSE OF SEARCH TOWARDS EXISTING ADVANCE TAX LIABILITY. 3. RIVAL CONTENTIONS HAVE BEEN HEARD AND RECORD PERUSED. B RIEF FACTS OF THE EA SE ARE THAT A SEARCH & SEIZU RE ACTION U/S. 132 (1) OF THE ACT WAS CARRIED OUT ON 17.11.2005 AT THE RESIDENTIAL AND BUSINESS PREMISES OF THE ITA NO. 172 /1 4 2 ASSESSEE . DURING THE SEARCH & SEIZURE ACTION, EXCESS CASH OF RS.12,30,000 / - & JEWELLERY VALUED AT RS.18,94,394/ - WERE FOUND AND THE APPELLANT MADE DISCLOSURE OF ADDITIONAL INCOM E OF RS.1 CRORE U/S.132(4) OF THE ACT INCLUDING CASH, JEWELLERY AND OTHERS TO COVER ANY DISCREPANCIES FOUND DURING THE COURSE OF ASSESSMENT PROCEEDINGS. THE ASSESSEE FILED THE RETURN OF INCOME IN RESPONSE TO NOTICE U/S.153A OF THE ACT DECLARING TOTAL INCOM E AT RS.1,78,02,883/ - . THE ASSESSMENT U/S.143(3) R.W.S. 153A OF THE ACT WAS COMPLETED ON 21.12.2007 ACCEPTING THE RETURNED INCOME A ND RAISING A DEMAND OF RS.22,41 ,504/ - . THE ASSESSEE FILED A LETTER DATED 09.03.2006 REQUESTING FOR APPROPRIATION OF CASH SEIZ ED AGAINST THE ADVANCE TAX PAYABLE FOR THE AY.2006 - 07 BUT THE AO DID NOT ACCEPT THE REQUEST OF THE APPELLANT AND CHARGED INTEREST U/S.234A, 234 B AND 234C OF THE ACT. IN VIEW OF THE ABOVE, THE APPELLANT FILED AN APPLICATION FOR RECTIFICATION U/S.154 OF THE ACT ON 21.01.2011. THE AO DID NOT ACCEPT THE CONTENTION OF THE APPELLANT EVEN DURING THE PROCEEDINGS U/S.154 OF THE ACT ON THE GROUND THAT THE SEIZED CASH CAN BE UTILIZED IN DISCHARGING THE LIABILITY DETERMINED ON COMPLETION OF THE ASSESSMENT. THE RECTIFI CATION APPLICATION WAS ACCORDINGLY REJECTED BY THE AO. 4. BY THE IMPUGNED ORDER, THE CIT(A) DIRECTED THE AO TO ADJUST THE CASH SEIZED TOWARDS THE EXISTING ADVANCE TAX LIABILITY AFTER HAVING THE FOLLOWING OBSERVATION : - 7.0 THE FACTS OF THE CASE, THE GROU NDS OF APPEAL, THE S TAND TAKEN BY THE A.O IN THE RECTIFICATION ORDER AND THE WRITTEN SUBMISSIONS FILED BY THE APPELLANT HAVE BEEN CAREFULLY CONSIDERED. THE ISSUE IS WHETHER THE CASH SEIZED DURING THE COURSE OF SEARCH SHOULD BE ADJUSTED AS ADVANCE TAX OR AG AINST THE DEMAND RAISED U/S.153A OF THE ACT. THE HON'BLE ITAT, NAGPUR BENCH IN THE CASE OF ACIT VS. ITA NO. 172 /1 4 3 NAVAL KUMAR D. BHOOT (21 TTJ 585) (2013) (TRIB. - NAGPUR) VIDE ORDER DATED 08.02.2013 HELD THAT THE CASH SEIZED DURING THE COURSE OF SEARCH IS LIABLE TO BE AD JUSTED AGAINST THE EXISTING ADVANCE - TAX LIABILITY. THE HON'BLE ITAT FOLLOWED THE DECISION OF HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF JYOTINDRA B. MODY (ITA NO.3741 OF 2010 DATED 21.09.2011). THE RELEVANT PARAGRAPH OF THE DECISION OF HON'BLE HIGH C OURT IN THE CASE OF JYOTINDRA B. MODY AS REPRODUCED BY HON'BLE ITAT, NAGPUR BENCH IN THE CASE OF NAVALKUMAR D. BHOOT IS AS UNDER: ONCE THE ASSESSEE OFFERS TO TAX THE UNDISCLOSED INCOME INCLUDING THE AMOUNT SEIZED DURING THE SEARCH, THEN THE LIABILITY TO PAY ADVANCE TAX IN RESPECT OF THAT AMOUNT ARISE EVEN BEFORE THE COMPLETION OF THE ASSESSMENT. SECTION 132B(1)(I) OF THE ACT DOES NOT PROHIBIT UTILIZATION OF THE AMOUNT SEIZED DURING THE COURSE OF SEARCH TOWARDS THE ADVANCE TAX PAYABLE ON THE AMOUNT OF UNDISCLOSED INCOME DECLARED DURING THE COURSE OF SEARCH. IN THE PRESENT CASE, THE ASSESSEE, PRIOR TO THE LAST DATE FOR PAYMENT OF LAST INSTA LLMENT OF ADVANCE TAX, HAD IN FACT BY HIS LETTER DATED 14TH MARCH, 2007 REQUESTED THE ASSESSING OFFICER TO ADJUST TH E AMOUNTS TOWARDS THE EXISTING ADVANCE TAX LIABILITY. SINCE ADVANCE TAX LIABILITY IS TO BE COMPUTED AND PAID IN ACCORDANCE WITH THE PROVISIONS OF THE ACT EVEN BEFORE THE COMPLETION OF THE ASSESSMENT, NO FAULT CAN BE FOUND WITH THE DECISION OF THE ITA T IN HOLDING THAT IN THE FACTS OF THE PRESENT CASE, THE AM'!:{NTS IN QUESTION. WERE LIABLE TO BE ADJUSTED TOWARDS THE EXISTING ADVANCE TAX LIABILITY.' 7.1 IN THE CASE OF THE APPELLANT, THE APPELLANT OFFERED THE ADDITIONAL INCOME U/S.132(4) OF THE ACT WHICH RE SULTED IN LIABILITY TO PAY ADVANC E - TAX AND THE APPELLANT FILED A LETTER BEFORE THE ASSESSING OFFICER ON 09.03.2006 REQUESTING TO ADJUST THE CASH SEIZED AGAINST THE PAYMENT OF ADVANCE - TAX FOR THE A.Y.2006 - 07. THE FACTS OF THE CASE OF THE APPELLANT ARE SIMIL AR TO THE FACTS OF THE CASE OF THE CASE OF NAVAL KUMAR D. BHOOT. RELYING ON THE DECISION OF HON'BLE ITAT, NAGPUR BENCH IN THE CASE OF ACIT VS. NAVAL KUMAR D. BHOOT (SUPRA), IT IS HEREBY HELD THAT THE CASH SEIZED OF RS.12,30, 000/ - SHALL BE ADJUSTED TOWARDS THE EXISTING ADVANCE - TAX LIABILITY 5. WE HAVE CONSIDERED RIVAL CONTENTIONS AND FOUND THAT ISSUE UNDER CONSIDERATION IS SQUARELY COVERED BY THE DECISION OF JURISDICTIONAL HIGH COURT IN THE CASE OF JYOTINDRA B. MODY (SUPRA), AS DISCUSSED BY THE CIT(A) AT PARA 7 OF HIS ORDER AND BY FOLLOWING THE SAME, THE CIT(A) HAS DIRECTED THE AO TO ADJUST THE SEIZED CASH TOWARDS EXISTING ADVANCE TAX LIABILITY. WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF CIT(A). ITA NO. 172 /1 4 4 6 . IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSED. O RDER PRONOUNCED IN THE OPEN COURT ON THIS 11 /06 / 201 5 . SD/ - SD/ - ( ) ( SUSHMA CHOWLA ) ( . . ) ( R.C.SHARMA ) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI ; DATED 11 /06 /201 5 . . /PKM , . / PS / COPY OF THE ORDER FORWARDED TO : / BY ORDER, / ( ASSTT. REGISTRAR) , / ITAT, MUMBAI 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A), MUMBAI. 4. / CIT 5. , , / DR, ITAT, MUMBAI 6 . / GUARD FILE. //TRUE COPY/