Amount Seized By Income Tax Department And Adjusted Against Demand Prior To Initiation Of CIRP Is Not Asset Of CD: NCLAT

NCLAT has ruled that amounts seized by the Income Tax Department prior to the initiation of CIRP are not considered assets of the corporate debtor. The case involved a dispute over the possession of seized funds and whether they should be treated as part of the corporate debtor's assets during insolvency. The NCLAT clarified that such seized amounts, being outside the scope of the CIRP, should not be included in the debtor's asset pool. This decision provides clarity on how tax seizures are treated in insolvency proceedings.