October 2019

Refund Interest on refund Section 244A of ITA, 1961 Amount seized from assessee in search proceedings shown as advance tax in return Return accepted and assessment made Assessee entitled to interest u/s 244A on such amount

K.B.Bhujle
Advocate

7.       Agarwal Enterprises vs. Dy. CIT; [2019] 415 ITR 225 (Bom.) Date of order: 24th January, 2019 A.Y.: 2015-16

 

Refund Interest on refund Section 244A of ITA, 1961 Amount seized from assessee in search proceedings shown as advance tax in return Return accepted and assessment made Assessee entitled to interest u/s 244A on such amount

 

In the course of the search proceedings u/s 132 of the Income-tax Act, 1961 conducted in the office premises of the assessee on 9th October, 2014 cash of Rs. 35 lakhs was seized. The assessee applied for release of the seized cash after adjusting tax liability due on the amount but the same was not accepted by the AO. The assessee filed its return of income for the A.Y. 2015-16, declaring total income of Rs. 39.15 lakhs, which included the cash of Rs. 35 lakhs seized during the course of the search. The assessee showed the seized cash of Rs. 35 lakhs as advance tax and claimed a refund of Rs. 27.50 lakhs. The AO passed an assessment order u/s 143(3) of the Act including the said cash of Rs. 35 lakhs in the total income. However, the amount of Rs. 35 lakhs which was shown as advance tax was not accepted and an independent demand of Rs. 9.18 lakhs was raised on the assessee u/s 156 of the Act. The demand was paid by the assessee. Subsequently, on application for refund of seized cash of Rs. 35 lakhs, the AO refunded Rs. 31.5 lakhs after deducting the outstanding penalty demand of Rs. 3.5 lakhs. However, the AO refused to pay interest on the refunded amount.

 

The assessee filed a writ petition and challenged the order. The Bombay High Court allowed the writ petition and held as under:

 

(i)   It was an undisputed position t

--->

Keywords Search
Flip-Book Search
HTML View Search
Current Issue