DCIT CIR 22(1), MUMBAI V. JIGAR P. THAKKAR, MUMBAI

ITA 6658/MUM/2012

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 78985 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 6 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-05-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: J
• Next Hearing Date: 16-04-2014
• Assessment Year: 2010-2011
• Appeal Filed On: 01-11-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 234B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL J BEN CH, MUMBAI JH FOT; IKY JKO] U;KF;D LNL; ,OA JH FOT; IKY JKO] U;KF;D LNL; ,OA JH FOT; IKY JKO] U;KF;D LNL; ,OA JH FOT; IKY JKO] U;KF;D LNL; ,OA JH JKTSUNZZ JH JKTSUNZZ JH JKTSUNZZ JH JKTSUNZZ] YS[KK LNL; DS LE{K ] YS[KK LNL; DS LE{K ] YS[KK LNL; DS LE{K ] YS[KK LNL; DS LE{K BEFORE SHRI VIJAY PAL RAO, JUDICIAL MEMBER AND SHRI RAJENDRA, ACCOUNTANT MEMBER VK;DJ VIHY LA[;K / ITA NO.6658/MUM/2012 FU/KKZJ.K O'KZ @ ASSESSMENT YEAR: - 2010-11 DY. CIT CIRCLE 22(1), ROOM NO. 411, 4 TH FLOOR TOWER NO. 6, VASHI STATION COMPLEX, MUMBAI 400 703. VS. JIGAR P. THAKKAR B-16/228 ASHIRWAD, RAJAWADI, CHSL., GHATKOPAR (E), MUMBAI -400 0770 PAN:-AABFJ4278N APPELLANT RESPONDENT REVENUE BY/ JKTLO DH VKSJ LS JKTLO DH VKSJ LS JKTLO DH VKSJ LS JKTLO DH VKSJ LS SHRI MAURYA PRATAP ASSESSEE BY / FU/KKZFJRH DH VKSJ LS FU/KKZFJRH DH VKSJ LS FU/KKZFJRH DH VKSJ LS FU/KKZFJRH DH VKSJ LS SHRI SACHIN MAHESHWARI ORDER PER VIJAY PAL RAO, JM THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER DATED 13.08.2012 OF CIT FOR THE A.Y. 2010-11. THE SOLITARY GROUND RAISE D BY THE REVENUE AS UNDER:- ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE CIT(A) ERRED IN ALLOWING THE CLAIM OF THE ASSESSEE FOR GIV ING CREDIT OF THE CASH SEIZED AGAINST THE ADVANCE TAX LIABILITY AND THEREB Y DELETING THE INTEREST U/S 234A, 234B AND 234C. 2. ON THE BASIS OF POLICE INFORMATION, THE REVENUE AUTHORITIES SEIZED A SUM OF RS. 55,00,000/- BELONGING TO THE ASSESSEE FROM THE CAR MH-27-Q-2727 ON 12.07.2009. THE ASSESSEE OFFERED THE SAID AMOUNT TO TAX. THE ASSESSING OFFICER DATE OF HEARING 29.05.2014 DATE OF PRONOUNCEMENT 29.05.2014 JIGAR P. THAKKAR 2 | P A G E COMPLETED THE ASSESSEMENT ON TOTAL INCOME OF RS. 1, 21,85,671/- AND ALSO LEVIED INTEREST U/S 234A, 234B AND 234C. 3. ON APPEAL, CIT(A) HAD DELETED THE INTEREST LEVIE D U/S 234A, 234B AND 234C BY FOLLOWING THE DECISION OF HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. SHRI JYOTINDRA B. MODY IN INCOME TAX APPEAL NO 3741 OF 2010 ORDER DATED 21-9- 2011. 4. WE HAVE HEARD THE LD. DR AS WELL AS LD. AR AND C ONSIDERED THE RELEVANT MATERIAL ON RECORD. THERE IS NO DISPUTE THAT A SUM OF RS. 55,00,000/- WAS SEIZED BY THE DEPARTMENT ON 12.07.2009 AND THE SAID AMOUNT RE MAINED WITH THE DEPARTMENT, THEREFORE, BY CONSIDERING THIS FACT THAT CIT(A) HAS ADUDICATED THIS ISSUE IN PARA 3.2 AND 3.3 AS UNDER:- 3.2 IN SUPPORT OF THE SAME, APPELLANT HAS CITED HON 'BLE BOMBAY HIGH COURTS DECISION IN THE CASE OF CIT V IS. JYOTINDRA B MODY- APPEAL NO.3471 OF 2010 AND ENCLOSED A COPY. I HAVE GONE TH ROUGH THE SAME AND NOTED THAT HON 'BLE HIGH COURT DIRECTED IN THE CASE TO ADJUST THE AMOUNT SEIZED AGAINST ADVANCE TAX LIABILITY FOR THE REASON THAT THE TAX LIABILITY FOR THAT AMOUNT WAS ALREADY CRYSTALLIZED AND HENCE ADJUSTMENT AGAINST TAX LIABILITY HAS TO BE MADE IN CASES LIKE THIS. FOR THE SAKE OF CLARITY RELEVANT PORTION OF THE ORDER OF HON 'BLE BOMBAY HIG H COURT IS REPRODUCED AS UNDER:- 7. THE BASIC ARGUMENT OF THE REVENUE IS THAT UNDER SECTION 132B(1)(I) OF THE INCOME TAX ACT, 1961, THE AMOUNT SEIZED DURING THE COURSE OF SEARCH CAN BE DEALT WITH FOR DISCHARGING THE EXISTING LIAB ILITY UNDER THE ACTS SET OUT THEREIN. IN THE PRESENT CASE, THE TAX LIABILITY REL ATING TO THE ASSESSMENT YEAR IN QUESTION WOULD GET CRYSTALISED ONLY AFTER THE AS SESSMENT IS COMPLETED AND THEREFORE, THE REQUEST OF THE ASSESSEE FOR ADJU STMENT OF THE AMOUNTS IN QUESTION TOWARDS THE ADVANCE TAX LIABILITY COULD NO T BE ENTERTAINED. 8. WE SEE NO MERIT IN THE ABOVE CONTENTION, BECAUSE , ONCE THE ASSESSEE OFFERS TO TAX THE UNDISCLOSED INCOME INCLUDING THE AMOUNT SEIZED DURING THE SEARCH, THEN THE LIABILITY TO PAY ADVANCE TAX IN RE SPECT OF THAT AMOUNT ARISES EVEN BEFORE THE COMPLETION OF THE ASSESSMENT. SECTI ON 132B(1)(I) OF THE ACT JIGAR P. THAKKAR 3 | P A G E DOES NOT PROHIBIT UTILIZATION OF THE AMOUNT SEIZED DURING THE COURSE OF SEARCH TOWARDS THE ADVANCE TAX PAYABLE ON THE AMOUNT OF U NDISCLOSED INCOME DECLARED DURING THE COURSE OF SEARCH. IN THE PRESE NT CASE, THE ASSESSEE, PRIOR TO THE LAST DATE FOR PAYMENT OF LAST INSTALLM ENT OF ADVANCE TAX, HAD IN FACT BY HIS LETTER DATED 14TH MARCH, 2007 REQUESTED THE ASSESSING OFFICER TO ADJUST THE AMOUNTS TOWARDS THE EXISTING ADVANCE TAX LIABILITY. SINCE ADVANCE TAX LIABILITY IS TO BE COMPUTED AND PAID IN ACCORDA NCE WITH THE PROVISIONS OF THE ACT EVEN BEFORE THE COMPLETION OF THE ASSESSMEN T, NO FAULT CAN BE FOUND WITH THE DECISION OF THE ITAT IN HOLDING THAT IN TH E FACTS OF THE PRESENT CASE, THE AMOUNTS IN QUESTION WERE LIABLE TO BE ADJUSTED TOWARDS THE EXISTING ADVANCE TAX LIABILITY. ' 3.3 AS THE FACTS ARE IDENTICAL IN THE CASE IN INSTAN T APPEAL, RESPECTFULLY FOLLOWING THE DECISION, CLAIM OF THE APPELLANT FOR GIVING CREDIT AGAINST ADVANCE TAX LIABILITY IS ALLOWED. THE A.O IS DIRECTE D TO GIVE CREDIT AGAINST THE ADVANCE TAX LIABILITY AND CONSEQUENTLY TO WORK OUT IF STILL THERE IS INTEREST LIABILITY IX] S.234A, 234B & 234C IN THE CASE. THUS FOR STATISTICAL PURPOSE, GROUND NO.2 IS ALSO TREATED AS ALLOWED. 5. SINCE THE ISSUE IS COVERED BY THE DECISION OF HO NBLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. SHRI JYOTINDRA B. MODY (SUPRA) AS WELL AS THE DECISION OF HONBLE DELHI HIGHCOURT IN THE CASE OF CIT VS. K .K. MARKETING (278 ITR 596), THEREFORE, WE DO NOT FIND ANY ERROR OR ILLEGALITY I N THE ORDER OF CIT(A) QUA THIS ISSUE AND THE SAME IS UPHELD. 6. IN THE RESULT APPEAL OF THE REVENUE IS DISMISSED . ORDER PRONOUNCED IN THE OPEN COURT TODAY I.E 2 9-05-2014 SD/- SD/- ( RAJENDRA ) (VIJAY PAL RAO) (ACCOUNTANT MEMBER/ YS[KK LNL; YS[KK LNL; YS[KK LNL; YS[KK LNL; ) (JUDICIAL MEMBER/ U;KF;D LNL; U;KF;D LNL; U;KF;D LNL; U;KF;D LNL; ) MUMBAI DATED 29 -05-2014 SKS SR. P.S,