G.L. Jain v. CIT & Ors. - Taxpublishers.in

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The Tax Publishers2013 TaxPub(DT) 0923 (Del-HC) : (2013) 050 (I) ITCL 0450 : (2013) 352 ITR 0339 : (2014) 266 CTR 0473 : (2013) 087 DTR 0255 INCOME TAX ACT, 1961 --Search and seizure--Interest under section 132B(3) Computation of principal and interest thereon--A search and seizure action was conducted on 16-2-2005, and cash amount of Rs. 96,14,700 was found, out of which Rs. 92,82,700 was seized under a memo. This was subsequently remitted to the Commissioner for the purpose of depositing it into its Govt. deposit account. The petitioner represented for release of the amount on 28-3-2005. Subsequently, upon receipt of the notice under section 153A, the writ petitioner filed a return of income-tax for assessment of block years 1999-2000 to 2004-2005 on 19-9-2006. The assessment was completed on 27-12-2006 for this year resulting in NIL tax demand. Apparently, the writ petitioner kept on representing to the assessing officer as well as Commissioner by various letters dated 2-1-2007, 9-1-2007, 29-1-2007, 2-12-2010 and 16-3-2011 to release the cash amount but to no avail. In the meanwhile, a sum of Rs. 33,72,907 was adjusted against the demand outstanding against the petitioner's brother vide letter dated 23-2-2007. Eventually, on 9-3-2011, Rs.54,09,793 was released to the petitioner and balance of Rs. 5 lakhs was released on 5-4-2011. After these events, the petitioner made a series of representation on 11-4-2011, 3-5-2011, 6-5-2011 and 1-12-2011 for grant of interest in respect of the amount which has been withheld for about 6 years. It is submitted that by virtue of the provisions under section 132B(4) read with section 244A, the writ petitioner is entitled to interest for the entire period on the sum of Rs. 92,82,700 which was illegally withheld. After notice was issued, counsel for the respondents sought instructions. In the meanwhile, on 11-5-2012, a sum of Rs. 4,72,783 was paid to the petitioner towards interest under section 132B(4) for a period of 16 months, i.e., from expiry of 120 days from the last date of authorization for search (2-5-2005), which come to 2-9-2005, till the date of assessment, i.e., 26-12-2006. The calculation and reasons in support of the interest paid by the respondents was furnished to the Court through counsel. *Held:* For a period of 16 months, the liability as on 26-12-2006 was in respect of the whole amount of Rs. 92,82,700. This Court, therefore, holds that the petitioner was entitled to the entire interest calculable for the said period, i.e., Rs. 7,42,616. The balance payable, after making an adjustment of Rs. 4,72,783 would, therefore, have to be made over to the writ petitioner. SUBSCRIBE FOR FULL CONTENT

The Tax Publishers2013 TaxPub(DT) 0923 (Del-HC) : (2013) 050 (I) ITCL 0450 : (2013) 352 ITR 0339 : (2014) 266 CTR 0473 : (2013) 087 DTR 0255

INCOME TAX ACT, 1961

--Search and seizure--Interest under section 132B(3) Computation of principal and interest thereon--A search and seizure action was conducted on 16-2-2005, and cash amount of Rs. 96,14,700 was found, out of which Rs. 92,82,700 was seized under a memo. This was subsequently remitted to the Commissioner for the purpose of depositing it into its Govt. deposit account. The petitioner represented for release of the amount on 28-3-2005. Subsequently, upon receipt of the notice under section 153A, the writ petitioner filed a return of income-tax for assessment of block years 1999-2000 to 2004-2005 on 19-9-2006. The assessment was completed on 27-12-2006 for this year resulting in NIL tax demand. Apparently, the writ petitioner kept on representing to the assessing officer as well as Commissioner by various letters dated 2-1-2007, 9-1-2007, 29-1-2007, 2-12-2010 and 16-3-2011 to release the cash amount but to no avail. In the meanwhile, a sum of Rs. 33,72,907 was adjusted against the demand outstanding against the petitioner's brother vide letter dated 23-2-2007. Eventually, on 9-3-2011, Rs.54,09,793 was released to the petitioner and balance of Rs. 5 lakhs was released on 5-4-2011. After these events, the petitioner made a series of representation on 11-4-2011, 3-5-2011, 6-5-2011 and 1-12-2011 for grant of interest in respect of the amount which has been withheld for about 6 years. It is submitted that by virtue of the provisions under section 132B(4) read with section 244A, the writ petitioner is entitled to interest for the entire period on the sum of Rs. 92,82,700 which was illegally withheld. After notice was issued, counsel for the respondents sought instructions. In the meanwhile, on 11-5-2012, a sum of Rs. 4,72,783 was paid to the petitioner towards interest under section 132B(4) for a period of 16 months, i.e., from expiry of 120 days from the last date of authorization for search (2-5-2005), which come to 2-9-2005, till the date of assessment, i.e., 26-12-2006. The calculation and reasons in support of the interest paid by the respondents was furnished to the Court through counsel. Held: For a period of 16 months, the liability as on 26-12-2006 was in respect of the whole amount of Rs. 92,82,700. This Court, therefore, holds that the petitioner was entitled to the entire interest calculable for the said period, i.e., Rs. 7,42,616. The balance payable, after making an adjustment of Rs. 4,72,783 would, therefore, have to be made over to the writ petitioner.