COMMISSIONER OF INCOME TAX Vs. ARUN KAPOOR

JUDGEMENT

(1.) This order shall dispose of I.T.A. Nos. 149 and 150 of 2003. The facts are said to be identical in both the appeals. Reference is made to the facts of I.T.A. No. 149 of 2003.

(2.) The Revenue has preferred this appeal under Section 260A of the Income-tax Act, 1961 (in short "the Act") against the order of the Income-tax Appellate Tribunal, Amritsar Bench, Amritsar (hereinafter referred to as "the Tribunal") passed in I.T.A. No. 333 (ASR)/96 on November 29, 2002, for the assessment year 1994-95, proposing to raise the following substantial question of law:

(3.) The Assessee is engaged in the business of trading of cloth and filed return for the assessment year 1994-95 on October 28, 1994, declaring an income of Rs. 30,38,920. On April 29, 1994, a search was conducted at the residential as well as business premises and on search, the Assessee surrendered certain amounts as additional income. The assessment was completed on November 23,1995, at the total income of Rs. 30,63,930. The Assessee made a request for adjusting the cash amount seized during search on May 30, 1994. The said request of the Assessee was not accepted by the Assessing Officer. As the search operation had taken place on April 29, 1994, i.e., after the closing of the financial year, interest under Sections 234B and 234C was levied. In September, 1994 part of the seized cash was adjusted towards tax due in different cases for the assessment year 1994-95. As per Section 211 of the Act, the Assessee was required to pay advance tax in three instalments for the financial year ending on March 31, 1994. The due dates for paying advance tax were September 15, 1993, December 15, 1993 and March 15, 1994. The Assessing Officer held that the Assessee was liable to pay tax instalment on the surrendered income from the date advance tax was due, i.e., September 15, 1993, December 15, 1993 and March 15, 1994 and charged interest under Sections 234B and 234C of the Act accordingly. On appeal, the Commissioner of Income-tax (Appeals) and the Tribunal held that the demand of interest was not justified and income surrendered after the close of the financial year could not be foreseen by the Assessee for the purpose of payment of advance tax. The finding of the Tribunal is as under: