Assessee can’t have custody of robbed cash recovered by police: HC

Case Details: DDIT v. Sampath - [2022] 138 taxmann.com 172 (Madras)

Judiciary and Counsel Details

• • G.K. Ilanthiraiyan, J.
  • G. Mariappan for the Petitioner.
  • B. Thanga Aravindh, Govt. Adv. for the Respondent.

Facts of the Case

A robbery was committed upon employees of assessee and cash being sale proceeds from jewelry articles was robbed. Subsequently, the robbed amount was recovered by Police and deposited in the custody of the concerned court of the Judicial Magistrate.

The assessee filed a petition for the return of recovered cash before the Judicial Magistrate which was allowed subject to the condition that the assessee shall execute a bond. Revenue filed an appeal before the High Court against such an order.

High Court Held

The Madras High Court held that the Income-tax dept. issued summons under section 131(1A) to the assessee, in response to which, the assessee appeared for inquiry, and his statement was recorded under section 131. The assessee also admitted that the cash belonged to him and it was his unaccounted income that had not been reported to tax.

Thereafter, the Income-tax Authority initiated proceedings under section 132 against the assessee for non-disclosure of the income and the said proceeding was pending. Once the assessment procedure has become final and concluded, the Income-tax Authority is entitled to get the portion of the amount due and recoverable from the assessee. Since the Income-tax Authority already initiated proceedings under section 132, the assessee was not entitled to have custody of the cash.

List of Cases Reviewed

• • Babu Rao v. Inspector of Police [1991] 190 ITR 616 (Mad.) (para 11) distinguished.

List of Cases Referred to

• • Babu Rao v. Inspector of Police [1991] 190 ITR 616 (Mad.) (para 5)
  • Union of India v. Hashir [2020] 118 taxmann.com 511/275 Taxman 568/[2021] 432 ITR 465 (Ker.) (para 6).