INCOME TAX ACT, 1961

Section 132B

Search and seizure - Adjustment of cashseized against advance tax dues - Determination of date of payment of tax - Request made for adjustment vis-a-vis date on which return was filed

Assessee-company was engaged in trading random slabs of marbles and granites. Pursuant to as search action cash amount of Rs. 4.77 Crores was seized. Assessee agreed to disclose Rs. 50 Lakhs and stock of Rs. 1.40 Crores as additional income for relevant assessment year 2007-08. It sent a communication dated 15-3-2007, in which a request was made to treat Rs. 50 Lakhs out of cash seized as advance tax payable by assessee. Revenue alleged that adjustment of cash seized against advance tax payable was to be treated as tax paid on date of filing of return. Held: Prior to seizure of cash, assessee had paid advance tax in four installments which was evident from statement of total income. Revenue did not adjust aforesaid amount even though cash was available with department. Aforesaid amount could have been adjusted against advance tax. It was also pertinent to note Explanation 2 to section 132B has been held to be prospective in nature and aforesaid position has been settled by Circular No.20/2017 dated 12.06.2017. Thus, date of payment of tax by assessee was 15.03.2007 i.e., date on which request was made by assessee to adjust cash seized against the advance tax payable towards the tax for Assessment year 2007-08.

REFERRED : CIT v. Sunil Chandra Gupta 2015-Tiol-673-Hc-All-It : 2015 TaxPub(DT) 1679 (All-HC), Raghavendra Traders v. ACIT 2011-TIOL-587-HC-KAR-IT, CIT v. Sunil Chandra Gupta 2016 TaxPub(DT) 2251 (SC).

FAVOUR : In assessee's favour.

A.Y. :

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