DCIT Central Circle- XVIII Kolkata, Kolkata V. Sri Ajit Kumar Surana, Kolkata

ITSSA 41/KOL/2012

• Counselvise Citation: [2014] 122 COUNSELVISE.COM (IT) 0252 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 7 month(s) 29 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 08-07-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2009-2010
• Appeal Filed On: 09-11-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VARINDER MEHTA
• Assessee Lawyers: S M SURANA
• Section: 143(3); 234B; 132

Judgement Text

I.T.(SS)A. NO.: 41/KOL./2012 AS SESSMENT YEAR : 2009-2010 PAGE 1 TO 4 1 IN THE INCOME TAX APPELLATE TRIBUNAL, KOLKATA C BENCH, KOLKATA CORAM : SHRI MAHAVIR SINGH (JUDICIAL MEMBER) AND SHRI SHAMIM YAHYA (A CCOUNTANT MEMBER) I.T.(S.S.)A. NO.: 41/KOL./ 2012 ASSESSMENT YEAR : 2009-2010 DEPUTY COMMISSIONER OF INCOME TAX,......... APPELLANT CENTRAL CIRCLE-XVIII, KOLKATA AAYAKAR BHAWAN POORVA, 4 TH FLOOR, 110, SHANTI PALLY, KOLKATA-700 107 -VS.- SRI AJIT KUMAR SURANA,............................. ................RESPONDENT FLAT NO. 1B, 29, SHAKESPEARA SARANI, KOLKATA-700 017 [PAN : ALBPS 1149 Q] APPEARANCES BY: SHRI VARINDER MEHTA, CIT, D.R., FOR THE DEPARTMENT SHRI S.M. SURANA, ADVOCATE, FOR THE ASSESSEE DATE OF CONCLUDING THE HEARING : JULY 03, 2014 DATE OF PRONOUNCING THE ORDER : JULY 08, 2014 O R D E R PER SHAMIM YAHYA: 1. THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST T HE ORDER OF LD. COMMISSIONER OF INCOME TAX (APPEALS), CENTRAL-II, K OLKATA DATED 08.08.2012 FOR THE ASSESSMENT YEAR 2009-10. 2. THE ISSUE RAISED IN THIS APPEAL IN GROUND NO. 1 READS AS UNDER:- THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE CIT(APPEAL) ERRED IN DIRECTING THAT INTERES T U/S 234B & 234C BE RECOMPUTED FROM 19.04.2010 AFTER ALLOWING C REDIT OUT OF SEIZED CASH AMOUNTING RS.5,16,82,202/- AGAINST T HE TAX LIABILITY OF THE ASSESSEE IN PLACE OF THE AMOUNT CA LCULATED BY THE AO TILL THE DATE OF COMPLETION OF ASSESSMENT AF TER ADJUSTING CREDIT OF THE SEIZED CASH ON DATE OF COMPLETION OF ASSESSMENT U/S 143(3) OF THE INCOME TAX ACT, 1961. I.T.(SS)A. NO.: 41/KOL./2012 AS SESSMENT YEAR : 2009-2010 PAGE 1 TO 4 2 3. BRIEF FACTS PERTAINING TO THE ISSUE IN THIS CASE ARE THAT IN THE COURSE OF INITIAL ENQUIRIES ABOUT THE FIVE BANK ACCOUNTS S TANDING IN VARIOUS NAMES WITH VIJAYA BANK, BURRABAZAR BRANCH, KOLKATA AS WELL AS ILN THE COURSE OF SEARCH OPERATION U/S 132 OF THE ACT IN TH E CASE OF APPELLANT ON 23.02.2010, THE APPELLANT ADMITTED AND OWNED THE AF ORESAID FIVE BANK ACCOUNTS. THE APPELLANT ALSO SURRENDERED UNDISCLOSE D INCOME ON THE BASIS OF SAID BANK ACCOUNTS FOR TAX IN ASSESSMENT YEARS 2 009-10 AND 2010-11. THERE WAS CREDIT BALANCE AGGREGATING TO RS.5,16,82, 202/- IN THE FIVE BANK ACCOUNTS WHICH WAS WITHDRAWN AND SEIZED BY THE DEPA RTMENT ON 24.02.2010. PRIOR TO THE DATE OF SEARCH, THE APPELL ANT FILED AN AFFIDAVIT DATED 29.01.2010 WHEREIN HE OWNED THE FIVE BANK ACC OUNTS AND ALSO AUTHORISED THE DEPARTMENT TO SEIZE THE CREDIT BALAN CES LYING WITH THOSE ACCOUNTS. IN THE AFFIDAVIT THE APPELLANT ALSO REQUE STED FOR ADJUSTMENT OF CREDIT BALANCES AGAINST THE TAX LIABILITY ON THE IN COME TO BE DETERMINED ON THE BASIS OF SAID BANK ACCOUNTS. LATER ON, THE A PPELLANT FILED A PETITION ON 19.04.2010 WHEREIN HE DISCLOSED ADDITIONAL INCOM E AGGREGATING TO RS.8 CRORES FOR ASSESSMENT YEARS 2009-10 & 2010-11. IN THE SAID PETITION THE APPELLANT AGAIN REQUESTED FOR ADJUSTMENT OF SEI ZED CASH AGAINST HIS TAX LIABILITY ON UNDISCLOSED INCOME. HOWEVER, ON CO MPLETION OF ASSESSMENT, WHILE COMPUTING THE TAX LIABILITY, THE AO DID NOT ALLOW THE CREDIT ON ACCOUNT OF SEIZED CASH FOR THE PURPOSE OF COMPUTATION OF INTEREST CHARGEABLE U/S 234B OF THE ACT. 4. UPON ASSESSEES APPEAL IN THIS REGARD, LD. CIT(A PPEALS) OBSERVED THAT HE WAS OF THE OPINION THAT ASSESSING OFFICER W AS NOT JUSTIFIED IN NOT ALLOWING THE SEIZED CASH FOR THE PURPOSE OF COMPUTA TION OF INTEREST UNDER SECTION 234B OF THE ACT AS REQUESTED BY THE ASSESSE E. IN THIS REGARD, LD. CIT(APEPEALS) REFERRED TO THE DECISIONS FROM HONBL E PUNJAB & HARYANA HIGH COURT AND HONBLE MUMBAI HIGH COURT. LD. CIT(A PPEALS) HELD THAT CASH BALANCES IN THE FIVE BANK ACCOUNTS WERE WITHDR AWN/SEIZED BY THE DEPARTMENT ON 24.02.2010 AND THEREAFTER ON 19.04.20 10 THE ASSESSEE MADE A PETITION REQUESTING TO ADJUST THE SEIZED AMO UNT AGAINST THE TAX I.T.(SS)A. NO.: 41/KOL./2012 AS SESSMENT YEAR : 2009-2010 PAGE 1 TO 4 3 LIABILITY ON UNDISCLOSED INCOME. THEREFORE, FOLLOWI NG THE DECISIONS REFERRED BY HIM, LD. CIT(APPEALS) DIRECTED THE ASSE SSING OFFICER TO ALLOW THE CREDIT OF SEIZED CASH AGAINST THE TAX LIABILITY OF THE ASSESSEES COMPUTATION FROM 19.04.2010 FOR THE PURPOSE OF COMP UTATION OF INTEREST CHARGEABLE UNDER SECTION 234B OF THE ACT. 5. AGAINST THE ABOVE ORDER OF LD. CIT(APPEALS), REV ENUE IS IN APPEAL BEFORE THE TRIBUNAL. 6. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. IN THIS REGARD, LD. COUNSEL FO R THE ASSESSEE SUBMITTED THAT THE ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISION OF THE HONBLE ITAT, KOLKATA BENCH VIDE ORDER DATED 19.03. 2012 IN ITA NO. 1956/KOL/2009 IN THE CASE OF ASHOK KUMAR SINGHANIA VS.- ACIT. IN THIS CASE, TRIBUNAL HAD EXPOUNDED THAT PAYMENT CAN ALSO BE BY WAY OF ADJUSTMENT FROM AN AMOUNT WHICH IS ALREADY AVAILABL E WITH THE DEPARTMENT AGAINST THE LIABILITY AS DETERMINED IN T HE ORDER OF ASSESSMENT. FURTHERMORE, LD. COUNSEL FOR THE ASSESS EE PLACED RELIANCE ON THE DECISION OF THE HONBLE MUMBAI HIGH COURT IN TH E CASE OF CIT VS.- SHRI JYOTINDRA B. MODI, MUMBAI IN ITA NO. 3741 OF 2 010. IN THIS CASE VIDE ORDER DATED 21.09.2011 HONBLE MUMBAI HIGH COURT HA S DECIDED IN PARA 8 AS UNDER:- 8. WE SEE NO MERIT IN THE ABOVE CONTENTION, BECAUS E 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 ARISES 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 INSTALMENT OF ADVANCE TAX, HAD IN FACT BY HIS LETTER DATED 14 TH MARCH, 2007 REQUESTED THE ASSESSING OFFICER TO ADJUST THE AMOUNTS TOWARDS THE EXISTING ADVANCE TAX LIABILITY SINCE ADVANCE TA X I.T.(SS)A. NO.: 41/KOL./2012 AS SESSMENT YEAR : 2009-2010 PAGE 1 TO 4 4 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 ITAT IN HOLDING THAT IN FA CTS OF THE PRESENT CASE, THE AMOUNTS IN QUESTION WERE LIABLE TO BE ADJUSTED TOWARDS THE EXISTING ADVANCE TAX LIABILITY 7. WE HAVE CONSIDERED THE ABOVE SUBMISSIONS. WE ARE IN AGREEMENT WITH THE SUBMISSIONS OF THE LD. COUNSEL FOR THE ASS ESSEE THAT THE ISSUE INVOLVED IN THIS APPEAL IS COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISIONS OF THE HONBLE HIGH COURT AND ITAT REFERR ED AS ABOVE. ACCORDINGLY RESPECTFULLY FOLLOWING THE PRECEDENT, W E DO NOT FIND ANY INFIRMITY IN THE ORDER OF LD. CIT(APPEALS) AND WE U PHOLD THE SAME. 8. IN THE RESULT, THE APPEAL FILED BY THE REVENUE S TANDS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 08 TH DAY OF JULY, 2014. SD/- SD/- MAHAVIR SINGH SHAMIM YAHYA (JUDICIAL MEMBER) (ACC OUNTANT MEMBER) KOLKATA, THE 08 TH DAY OF JULY, 2014 COPIES TO : (1) DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-XVIII, KOLKATA AAYAKAR BHAWAN POORVA, 4 TH FLOOR, 110, SHANTI PALLY, KOLKATA-700 107 (2) SRI AJIT KUMAR SURANA, FLAT NO. 1B, 29, SHAKESPEARA SARANI, KOLKATA-700 017 (3) CIT (4) CIT(A) (5) THE DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER ETC ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCHES, KOLKATA LAHA/SR. P.S.