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Showing 221 to 240 of 1125 Records
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2020 (11) TMI 905
Exemption u/s 11 - rejection of registration u./s.12AA and denial of claim of exemption u/s.10(23C) (iii)(ad) - trust is not eligible for exemption u/s.10(23C)(iiiad) having its total receipts of more than ₹ 1 crore - CIT(E) observed that in the absence of bills and vouchers, the genuineness of the activities of the assessee trust could not be verified - HELD THAT:- The scope of enquiry contemplated u/s 12AA is limited to the extent of Commissioner getting himself satisfied about object of the Trust and the genuineness of its activities so as to grant or refuse the registration u/s 12A - A perusal of the impugned order of the ld. CIT (Exemptions), however, shows that he has not recorded any adverse comment or dis-satisfaction about the object of Trust or genuineness of the Trust activities. Only he has observed some lacuna in the amendment and dissolution clauses. In our opinion, the ld. CIT (Exemptions) thus has clearly gone beyond the scope of enquiry contemplated u/s 12A of the Act and has refused to grant the registration u/s 12A of the Act to the assessee Trust on a totally irrelevant ground without pointing out as to how he was not satisfied either about the amendment clause and dissolution clauses of the Trust or the genuineness of its activities.
Contention of the assessee that some bills and vouchers were not produced due to time constrained by ld CIT(E) for appearing before him from a distance of more than 250 kms and also other unavoidable reasons, we find that there is genuine cause for not furnishing bills and vouchers - we direct the assessee to produce the bills and vouchers and books of account before the ld CIT(E) for verification as per Rule 17A in respect of the claim and after getting the same, ld CIT(E) is also directed to examine and verify the genuineness of the activities of the trust keeping in view trust deed and its relevant clauses and decide the issue afresh as per law after affording due opportunity of hearing to the assessee and without being prejudiced his earlier order challenged in this appeal. Appeal of the assessee is allowed for statistical purposes.
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2020 (11) TMI 904
Estimation of income - Bogus purchases - disallowance of 12.5% of purchases as non-genuine/bogus - CIT-A restricting addition to 5% of purchases - HELD THAT:- CIT(A) followed the order of the Tribunal in assessee’s own case for the earlier as well as subsequent assessment years on identical issue and decided partly in favour of the assessee by directing the AO to estimate the profit element in alleged non-genuine purchases at 5%, facts being similar, we do not find any infirmity in the order passed by the Ld.CIT(A) in restricting the addition to 5% of the value of purchases made. Grounds raised by the revenue are dismissed.
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2020 (11) TMI 903
TDS u/s 194C - hire charges paid to third party vehicle owners - Non deduction of tds - addition made u/s.40[a][ia] - As per assessee there is no agreement or contract between the assessee and the persons from whom the vehicles have been hired - first argument made by assessee that the second proviso to section 40(a)(ia) of the Act inserted by the Finance Act, 2012 would apply in the instant case - HELD THAT:- If the amount of tax has already been realised from the employees concerned directly, there cannot be any question of further realisation of tax as the same income cannot be taxed twice.
If the tax has been realised once, it cannot be realised once again, but that does not mean that the assessee will not be liable for payment of interest or any other legal consequence for their failure to deduct or to pay tax in accordance with law to the revenue.” (emphasis supplied) That such was the legal position was accepted by the Central Board of Direct Taxes in its Circular No.275/201/95-IT(B) dated January 29, 1997.
The settled position in law is that if the deductee/payee has paid the tax, no recovery can be made from the person responsible for paying of income from which he failed to deduct tax at source. In a case where the deductee/payee has paid the tax on such income, the person responsible for paying the income is no longer required to deduct or deposit any tax at source. In the similar circumstances, we find that the first proviso to section 40(a)(ia) inserted by the Finance Act, 2010, which has been held to be curative and therefore, retrospective in its operation by CIT v Virgin Creations [2011 (11) TMI 348 - CALCUTTA HIGH COURT] provides for allowance of the expenditure in any subsequent year in which tax has been deducted and deposited.
The intention of the legislature clearly is not to disallow legitimate business expenditure. The allowance of such expenditure is sought to be made subject to deduction and payment of tax at source. In a case where the deductee/payee has paid tax and as such the person responsible for paying is no longer required to deduct or pay any tax, legitimate business expenditure would stand disallowed since the situation contemplated by the first proviso viz. deduction and payment of tax in a subsequent year would never come about. Such unintended consequence has been sought to be taken care of by the second proviso inserted in section 40(a)(ia) by the Finance Act, 2012.
We restore this issue to the file of the Assessing officer with the direction that the assessee shall provide all the details to the Assessing Officer with regard to the recipients of the income and taxes paid by them. The Assessing Officer shall carry out necessary verification in respect of the payments and taxes of such income and al so filing the return by the recipient. In case, the Assessing Officer finds that the recipient has duly paid the tax es on the income, the addition made by the Assessing Officer shall stand deleted. Thus this ground is allowed for statistical purposes.
TDS u/s 194C(6) - Disallowance of reimbursement of petrol & diesel charges on hired vehicles - HELD THAT:- If bills for such expenses incurred by the said cab owners were separately raised by them on the assessee in addition to bills for hire charges and since the amount of bills so raised was towards the actual expenses incurred by them, there was no element of any profit involved in the said bills. It was thus a clear case of reimbursement of actual expenses incurred by the assessee and the same, therefore, was not of the nature of payment covered by section 194C of the Act requiring the assessee to deduct tax at source therefrom, where bills were raised separately by the cab owners for reimbursement of actual expenses incurred by them. The provisions of section 194C of the Act were not applicable to the reimbursement of actual expenses and the assessee was not liable to deduct tax at source from such reimbursement. Accordingly, we direct the A.O. to verify the claim of the assessee in the light of our above observation. See SRI. SINGONAHALLI CHIKKAREVANNA GANGADHARAIAH. [2020 (4) TMI 756 - ITAT BANGALORE]
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2020 (11) TMI 902
Assessment u/s 153A - Bogus claim of LTCG - Addition made without reference to seized material - HELD THAT:- AO has reassessed the income of the assessee by disallowing the long term capital gains exemption claimed u/s 10(38) without making any reference to any incriminating material found during the course of search. No finding of AO or any other material brought on record that these transactions of sale of shares were concealed and not reported to the Revenue while filing the original return of income on 30.08.2015 for the impugned assessment year.
Once these transactions were reported in the return of income furnished before the date of search, the said transactions were duly disclosed to the department and thus, doesn’t represent any undisclosed transactions so as to constitute incriminating material found during the course of search in case of the assessee. Therefore, the addition made by the AO by disallowing the claim of exemption u/s 10(38) and reassessment completed u/s 153A is undisputedly not based on any incriminating material found or seized during the course of search and seizure action u/s 132 of the Act. See KABUL CHAWLA [2015 (9) TMI 80 - DELHI HIGH COURT]. - Decided in favour of assessee.
Addition u/s 68 on account of bogus LTCG - denial of claim of exemption under section 10(38) in respect of sale of shares - addition u/s 69C made by the AO on account of unexplained commission expenditure for taking bogus accommodation entry in the form of LTCG - HELD THAT:- In the instant case, we note that the assessee satisfies the necessary ingredients and conditions as so specified in section 10(38) of the Act, in terms of transfer of long term capital asset by way of sale of equity shares on which STT has been paid, he shall therefore be eligible for exemption on whole of the income so realized as the provisions talks about any income arising from transfer of such long term capital asset which shall be exempt from tax. We accordingly donot see any infirmity or illegality in the said findings of the ld CIT(A).
As relying on SHRI VIJAYRATTAN BALKRISHAN MITTAL, [2019 (10) TMI 439 - ITAT MUMBAI] we find that evidence produced by the assessee in support of his claim of purchase and sale of shares on the stock exchange have not been refuted by any adverse findings or material which could demonstrate involvement of the assessee or collusion with so called accommodation entry providers to obtain bogus LTCG as so alleged by the authorities below.
As entirety of facts and circumstances of the case, we are of the considered view that the assessee has discharged the necessary onus cast on him in terms of claim of exemption of long term capital gains u/s 10(38) of the Act by establishing the genuineness of transaction of purchase and sale of shares and satisfying the requisite conditions specified therein and the gains so arising on sale of shares therefore has been rightly claimed as exempt u/s 10(38) - Accordingly, in the facts and circumstances of the case, we do not find any error or illegality in the impugned order of the CIT(Appeals) who has rightly allowed the said claim of the assessee - Decided against revenue.
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2020 (11) TMI 901
TDS u/s 195 - TDS on salary as per provisions of section 40(a)(i) - payment made from India to the employees of Head Office - assessee is a company registered in Netherlands - DTAA between India and Netherelands - as per asseseee that the salary has been paid abroad by the foreign company to its employees and the head office has apportioned a part of the salary expenses to the assessee which the assessee has debited and has reimbursed the Head Office without any mark up - HELD THAT:- Since the facts of the instant case are identical to the facts of the case decided by MOTHER DAIRY FRUIT, VEGETABLE (P) LTD. [2010 (10) TMI 852 - DELHI HIGH COURT] therefore, respectfully following the said decision we hold that the assessee is not liable to deduct tax at source from the salary paid to the non resident and has not committed any default in not deducting tax at source from the reimbursement to the head office on account of salary expenses. Accordingly the order of the Ld. CIT(A) is set aside and the grounds raised by the assessee are allowed.
Non deduction of tax at source, on professional fees etc - payment being reimbursement of technical expenses, in turn remitted to foreign professionals located outside India, paid outside India - taxation under Article of 14 of India- Netherlands DTAA - HELD THAT:- As decided in M/S GRANT THORNTON INDIA LLP [2019 (7) TMI 1719 - ITAT DELHI] Since the assessee has made the payment outside India to independent professionals, therefore, in view of Article 14 of India Netherlands DTAA the assessee is not liable to deduct any tax from such payment. Therefore, the order of the Ld. CIT(A) is set aside and the grounds raised by the assessee are allowed.
Addition being income on account of consultancy services as FTS u/s 9(1) (vii) r.w. Article 12(5) of subject DTAA and taxed the same at 10% - HELD THAT:- A perusal of the order of CIT(A) shows that despite his asking to provide the details of key professional staff/consultants who had worked on the DMIC Project and to explain whether services were rendered from the existing project office for the PSRBDB and the manner in which the services were rendered to the DMRC Project and to furnish the breakup of expenses in the said project, the assessee failed to produce the same before the CIT(A). Considering the totality of the facts of the case and in the interest of justice we deem it proper to restore the issue to the file of the CIT(A) with a direction to give one more opportunity to the assessee to file the above documents and to decide the issue afresh and in accordance with law after giving due opportunity of being heard to the assessee. While doing so, he shall also keep in mind the alternate argument of Ld. Counsel for the assessee to tax the receipt @ global profit rate and not the entire amount as added by the AO and upheld by CIT(A). The grounds raised by the assessee are accordingly allowed for statistical purposes.
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2020 (11) TMI 900
Disallowance of employees contribution to Provident Fund and ESI in dispute u/s 36(1)(va) - payment been deposited beyond due date prescribed under the relevant Act, but paid before the filing of the return of income by the assessee - HELD THAT:- We are of the considered view that the issue involved in the present appeal has already been adjudicated and decided in favour of the assessee by the Hon’ble Supreme Court of India; Hon’ble High Courts including the Hon’ble Jurisdictional High Court, as mentioned in the written submissions dated 22.09.2020 filed by the assessee, especially the decision of the Hon’ble Supreme Court of India in the case of Alom Extrusion Limited by referring its earlier decision in the case of CIT vs JH Gotla [1985 (8) TMI 5 - SUPREME COURT] and AIMIL Limited [2009 (12) TMI 38 - DELHI HIGH COURT]. Therefore, respectfully following the aforesaid precedents, we delete the addition in dispute by allowing the appeal of the assessee.
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2020 (11) TMI 899
Disallowance u/s 80P(2)(a)(i) - AO disallowed the claim of deduction u/s 80P(2)(a)(i) on the reason that the assessee is in the business of Banking - HELD THAT:- As decided in own case M/s. Swabhimani Souharda Credit Co-operative Ltd [2020 (1) TMI 831 - KARNATAKA HIGH COURT] the employment of the word “Sahakari” in the very title of the 1997 Act is also not sans any significance; ‘Sahakaar’ in Sanskrit is the equivalent of ‘sahakaara’ in Kannada which means ‘co-operation’; as already mentioned above both the 1959 Act and the 1997 Act employ this terminology; the 1997 Act is woven with the principles of co-operation; sec.4 of this Act bars registration of an entity unless its main objects are to serve the interest of the members in the area of co-operation and its bye-laws provide for economic and social betterment of its members through self-help & mutual aid in accordance with the cooperative principles; this apart, even sub-section (2) of sec.4 is heavily loaded with co-operative substance.
These writ petitions succeed; a declaration is made to the effect that the entities registered under the Karnataka Souharda Sahakari Act, 1997 fit into the definition of “co-operative society” as enacted in sec.2(19) of the Income Tax Act, 1961 and therefore subject to all just exceptions, petitioners are entitled to stake their claim for the benefit of sec.80P - remit the issue in dispute to the file of Assessing Officer to decide afresh in the light of above judgement after giving an opportunity of hearing to the assessee.
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2020 (11) TMI 898
Addition u/s 69A - assessee offered a sum of ₹ 3,00,000 as ‘Miscellaneous Receipt’ in her revised computation of income - Authorities have made and confirmed the instant addition on the ground that this receipt of ₹ 3,00,000 was different from the deposit of ₹ 3,00,000 in the bank account - HELD THAT:- We are unable to appreciate the view point of the authorities below on the ground that once the assessee offered a sum of ₹ 3,00,000 on receipt of the amount, there could have been no occasion of making another similar addition on spending/investing the said amount. If a person earns ₹ 100 from undisclosed sources and thereafter offers it for taxation, its later utilization, and that too, through undisclosed transactions, would not invite any further addition.
AO cannot make one addition at the time of earning the undisclosed income and another similar addition at the time of spending the same. Here is a case in which the assessee offered ₹ 3,00,000 as ‘Miscellaneous Receipt’, which has been duly taxed also. The utilization of such amount of ₹ 3,00,000 by the assessee by means of deposit in the bank account, cannot, in our opinion, call for any addition. We, therefore, order to delete the addition. - Decided in favour of assessee.
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2020 (11) TMI 897
Validity of the assessment framed under section 158BD - assumption of jurisdiction by the Assessing Officer - assessment of undisclosed income of the block period as per section 158BC - Penalty proceedings u/s 158BFA - specific information relating to the accommodation entry taken by the assessee - addition of undisclosed income - HELD THAT:- We hold that the jurisdiction assumed in the present case under section 158BD was not as per law in the absence of fulfilment of the necessary condition of handing over of incriminating material relating to the assessee by the Assessing Officer of the searched person to the Assessing Officer of the assessee.
A bare reading of the provisions of the Act clearly bring out that for the assumption of jurisdiction under section 158BD of the Act it is a necessary prerequisite for the incriminating material relating to the third person being handed over to his Assessing Officer by the Assessing Officer of the searched person,. The section clearly states the handing over of all material relating to the third person to his Assessing Officer and only thereafter the Assessing Officer can proceed to frame assessment of undisclosed income relating to the block period on such third person.
In the present case Supply of specific information relating to the assessee was sufficient for assuming jurisdiction under section 158BD of the Act even in the absence of seized material relating to the assessee being passed on.Thus it is an uncontroverted fact that seized material relating to the assessee was never handed over to the Assessing Officer as categorically required by section 158BD of the Act.
Firstly the fact of accommodation entry through cheque is not a specific information but a conclusion of the AO of the searched per son on the basis of certain document sets found during search proceedings. It is these documents, etc., relating to the assessee which ought to have been handed over to his Assessing Officer by the Assessing Officer of the searched person, as per section 158BD of the Act, so as to enable him to assess the undisclosed income of the assessee. In the absence of the basic documents evidencing accommodation entry being provided to the asses see, the bank account number or the person from whom entry received can be of no assistance to the Assessing Officer of the assessee for assessing the undisclosed income of the assessee. Therefore in the present case even specific information was not passed to the Assessing Officer of the assessee as contended by the Revenue and therefore the contention that passing on of specific information constituted or was equivalent to handing over seized material, merits no consideration and is rejected.
In the light of the aforesaid fact and considering the mandate of section 158BD of the Act as interpreted by the hon'ble Supreme Court in the case of Manish Maheshwari [2007 (2) TMI 148 - SUPREME COURT] the assumption of jurisdiction by the Assessing Officer in the present case under section 158BD of the Act we hold was not as per law. The assessment framed as a consequence thereof is void and accordingly is quashed. Ground of appeal Nos. 1, 2 and 3 are accordingly allowed.
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2020 (11) TMI 896
Condonation of delay in filing of appeal - eligible reasons to delay - Delay of 18 months - vague statement that due to medical problems the appeal could not be filed in time - HELD THAT:- Assessee has neither explained what medical problems be suffered from nor any supporting document is filed. Even the application for condonation of delay is not supported by an affidavit.
As manifest from the record that there is inordinate delay even in filing the appeal before the ld. CIT(A). The intimation has issued on 23.12.2013 which was challenged by the assessee by filing the appeal on 29.02.2016 which shows that there is more than two years delay. Even before the ld. CIT(A) the assessee has not explained any cause of delay in filing the appeal. CIT(A) has dismissed the appeal of the assessee as not maintain such being barred by limitation. These facts clearly show that the assessee is not taking tax matter seriously.
The conduct of the assessee does not inspire the confidence and hence, we are of the considered opinion that the assessee has grossly failed to explain the reasonable cause in filing the appeal belatedly. Accordingly, we decline to condone the delay of about 18 months in filing the present appeals - Decided against assessee.
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2020 (11) TMI 895
Second Bail application - Jurisdiction - applicants were intercepted on Faizabad Road but search proceedings were conducted at the office of Lucknow which is much away from the place of interception - HELD THAT:- Considering the facts that the accused are in jail since 7.12.2018, offence is punishable upto seven years of imprisonment, charges have not been framed till date, trial in the case has not proceeded, the department has not been able to produce the punch witnesses before the adjudicating authority and also the fact that in Covid-19 situation, trial is held up which may take sufficient time, case for bail is made out.
Let the applicants Manoj Kumar Soni and Sameer Gadtaula involved in Case Crime No. 06/2018 under Sections 104, 110, 111, 135 Customs Act, 1962, registered at Directorate of Revenue Intelligence, Lucknow Zonal Unit, U.P. Lucknow be released on bail on their furnishing a personal bond and two heavy sureties including one local surety, each in the like amount to the satisfaction of the court concerned with the following conditions which are being imposed in the interest of justice - Application allowed.
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2020 (11) TMI 894
Smuggling - Gold - Foreign Currency - Baggage Rules - appellant denied having any legal documents or any approval/ permission from the Reserve Bank of India - HELD THAT:- The appellant had improperly attempted to export the foreign currency totally valued at on 30.7.2018 i.e. at the time of his departure, by bring the said impugned goods in Customs Area as well as by taking many such deliberate overt steps such as (i) booking of Air ticket PNR670P21N for 30.07.2018 by Air India Express flight IX 195 to go to Dubai; (ii) His carrying the said foreign currency in a concealed manner in his baggage for avoiding detection in X-ray at the airport; (iii) His name was very much in the Passenger Air Manifest evidencing that he was going from Jaipur to Dubai on 30.07.2018; (iv)the recovery and seizure of impugned goods from his accompanied baggage : and (v) that he admitted in statement that he had agreed to commit this offence of smuggling of foreign currency in greed, all these preparedness are such deliberate overt steps which manifests his clear intention to illegally export foreign and Indian currency. I further find that the impugned goods i.e. the foreign was being carried by the appellant without any legal documents of possession and without any approval/permission of the Reserve Bank of India, thus being prohibited and liable to confiscation.
It is quite evident that the appellant attempted to smuggle the impugned currency out of India in contravention of the provisions of Customs Act - the Export of Foreign Currency is not allowed by an Indian resident or foreigner residing in India, going out of India, in terms of Section 3 & 4 of the Foreign Exchange Management Act, 1999 read with regulation 3, 5 and 76 of the Foreign Exchange Management (Export and Import of Currency) Regulation, 2015, Rule 7 of the Baggage Rules,2016 and Section 77 of the Customs Act, 1962. I therefore, hold that the impugned goods alongwith other goods recovered and seized from the appellant on 30.07.2018 at the International Airport Jaipur have been correctly confiscated under Section 113(d), 113(e) and 119 of the Customs Act, 1962.
The contention of the appellant, that the statements recorded have been partly accepted and the part wherein he had mentioned the name of Shri Madan Tawani as the real owner of the currency has been absolved, is not acceptable - In the instant case the impugned goods were recovered from the possession of the appellant while he was going out of India, as the case has been booked on the basis of the corroborative evidence on record and not only the statement.
Further the contention of the appellant that there is no provisions in the law which prescribes conditions of/denies or prohibits carrying own earned foreign currency of whatever amount, while going to a foreign destination is not acceptable, as the appellant has himself admitted that the provisions referred do not exactly cater to the situation in the impugned case - the provisions of the law with regard to bringing in or taking out of India Foreign currency or Indian currency are very specific and are to be strictly adhered to in all circumstances and situations. In the instant case the appellant intentionally in contravention of the provisions of law attempted to smuggle Foreign Currency out of India.
Penalties - HELD THAT:- The appellant was actively involved in the attempt to illegally export the impugned goods recovered and seized from his possession, which he had full knowledge were liable to confiscation under Section 113 of the Customs Act, 1962, Thus by carrying such an act in contravention of the provisions of the Customs Act, 1962 he has rendered himself liable for penalty - There are no reason to interfere with the findings of the adjudicating authority regarding imposition of penalty on the appellant in the instant case.
The statements and circumstantial evidences of the case proved that the appellant had knowingly and intentionally attempted to illegally carry out the Foreign currency out of India while departing for Dubai on 30.07.2018 - Penalty u/s 114AA upheld.
Appeal dismissed - decided against appellant.
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2020 (11) TMI 893
CENVAT Credit - input services - sales commission paid to sister concern - outward transportation from factory to the buyers premises for the period from April 2008 to April 2010 - HELD THAT:- As per clause (3) of the Agreement entered into between the appellant and FMGIL, FMGIL promotes sale of products of the appellant by doing various activities including promotion and marketing of the products of the appellant, seeking orders, assistance in sale of products, maintaining good relations with customers, providing consultation and advice in relation to the above, receiving orders from customers in relation to the products, notifying the customers/prospective customers of all the terms and conditions of sale as determined by the appellants. Further, the input service as defined under Rule 2(l) of CENVAT Credit Rules, 2004 explicitly includes activity of sales promotion and the explanation to Rule 2(l) of CENVAT Credit Rules, 2004 inserted by Notification No.2/2016- CE(NT) dated 3.2.2016 holding that sales promotion includes services by way of sale of dutiable goods on commission basis - also, this explanation added by way of amendment is declaratory in nature and is applicable retrospectively.
The Board vide Circular No.96/85/2015-CX dated 7.2.2015 has clarified that decision in the case of COMMISSIONER OF CENTRAL EXCISE, AHMEDABAD – II VERSUS M/S CADILA HEALTH CARE LTD. [2013 (1) TMI 304 - GUJARAT HIGH COURT] applies in case where the agent is undertaking only sales and no sales promotion. Whereas in the present case, it is clearly evident from various terms and conditions contained in clause (3) of the Agreement that M/s. FMGIL undertakes the activity of sales promotion. Hence, we hold that the decision in the case of Cadila Healthcare Ltd. is not applicable in the present case. This issue is no more res integra and it has been consistently held that sales commission fall under definition of ‘input service’. By following the ratio of the above said decisions, the denial of CENVAT Credit on sales commission is not sustainable in law.
Time Limitation - CENVAT credit on outward transportation from factory to the customers’ premises - HELD THAT:- On the point of limitation, the Division Bench of this Tribunal in the case of M/S SANGHI INDUSTRIES LTD. VERSUS C.C.E. KUTCH (GANDHIDHAM) [2019 (2) TMI 1488 - CESTAT AHMEDABAD], the Division Bench has dealt with the issue of limitation and has held that the outward GTA was the matter under litigation and for that reason the Government has to come out with clarification thereafter the matter was subject to various litigation before Tribunal, Hon’ble High Courts and Hon’ble Supreme Court, therefore no malafide intention can be attributed to the appellant, therefore, wherever the demand is for extended period, the same will also not be sustainable on the ground of time bar also.
Appeal disposed off.
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2020 (11) TMI 892
Dishonor of Cheque - acquittal of the accused - burden to prove - legally enforceable debt or not - contravention of Section 269-SS of the Income Tax Act - view taken by the learned Magistrate thereby acquitting the accused is erroneous and not based on sound legal principles - HELD THAT:- This Court has every power to re-appreciate, review and reconsider the evidence. After re-appreciating the evidence as above, the conclusion has been drawn that the judgment of acquittal rendered by the learned Trial Court is perverse. Now, when this Court has respondent/accused guilty of committing offence punishable under Section 138 of N.I. Act, the further act would ensue regarding imposition of quantum of punishment. It is clear from the aims and object for the enactment of Negotiable Instruments Act, that the penal provision was introduced to enhance the acceptability of cheque in settlement of liabilities by making the drawer liable for penalties in case of bouncing of cheques due to insufficiency of funds in the accounts or for the reason that it exceeds the arrangements made by the drawer. Honest drawers' interest who issue cheques is safeguarded in the Act itself.
The appellant would also be interested in getting her amount back. Therefore, payment of compensation under Section 357 of the Code of Criminal Procedure to the complainant would be in the interest of justice. The punishment that can be awarded for an offence under Section 138 of N.I. Act is " imprisonment for a term which may extend to two years, or with fine which may extend to twice the amount of the cheque, or both". The next step would be what could be the amount of fine. Here the cheque Exhibit-37 was drawn for ₹ 80,000/-. The complaint was filed in the year 2013 after the statutory notice. The amount became due to complainant from the date of notice. Accused has utilized the said amount till today. Therefore, some amount needs to be given to her above the cheque amount towards interest.
Respondent/accused Aarti Uttam Chavan is hereby convicted for the offence punishable under Section 138 of Negotiable Instruments Act - Respondent/accused is hereby sentenced to pay fine of ₹ 1,10,000/- only. The said amount be deposited by respondent before learned Trial Court on or before 1 st of January 2021. In case of failure on the part of the accused to deposit the said amount within the aforesaid period, she should undergo simple imprisonment of three months - Appeal allowed.
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2020 (11) TMI 891
Dishonor of Cheque - insufficiency of funds - non-discharge of debt or liability - the accused failed to pay the amount covered under the cheques within fifteen days from the date of receipt of the statutory notice - Section 138 of the Negotiable Instruments Act, 1881 - HELD THAT:- It is well settled law that when concurrent findings of facts rendered by the trial court and the appellate court are sought to be set aside in revision, the High Court does not, in the absence of perversity, upset factual findings arrived at by the two courts below. It is not for the revisional court to re-analyse and reinterpret the evidence on record in a case, where the trial court has come to a probable conclusion. Unless the contrary is proved, it is presumed that the holder of a cheque received the cheque of the nature referred to in Section 138 of the NI Act for the discharge, in whole or in part, of any debt or other liability. In the case at hand, the accused has no case that he has not signed the cheque or parted with under any threat or coercion. That apart, the accused has no case that the cheque had been lost irrecoverably or stolen. The accused failed to prove in the trial by leading cogent evidence that there was no debt or liability.
Both the trial court and the appellate court rightly held that the burden was on the accused to disprove the initial presumption under Sections 118 and 139 of the NI Act. The burden is not discharged rightly. The complaint was filed before the trial court in 2007. The complainant has been prosecuting this case for the last 16 years.
The accused is sentenced to pay a fine of ₹ 2,00,000/- and in default of payment of fine to undergo simple imprisonment for a period of four months. In view of the situation prevailing in the country due to Covid-19 pandemic, the accused is given six months time from today to pay the fine amount - the criminal revision petition is partly allowed.
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2020 (11) TMI 890
Dishonor of Cheque - acquittal of accused - Privity of Contract - main grounds urged in the appeal is that the Trial Court had earlier convicted the accused based on the very same material available on record and there are no changed circumstances - HELD THAT:- The complainant has not made out a case for legally recoverable debt payable by the accused. It is also important to note that in the cross-examination he categorically admitted that while filing the complaint, he did not mention anything about the transaction between him and Srinivas at the instance of the accused and the same was suppressed. Only during the course of cross-examination, it is elicited that all these transactions had taken place between the parties. Even though the accused has taken the contention that the subject matter of the cheque was stolen, which was kept in the bag and also not led any rebuttal evidence, the answers elicited from the mouth of P.W.1 is clear that there was no legally recoverable debt and also the admissions elicited from the mouth of P.W.1 regarding receipt of payment from the said Srinivas and also the accused has paid the amount to Srinivas - the Trial Judge has not committed any error in acquitting the accused considering the material available on record i.e., the admission of P.W.1 and no defence evidence has been adduced. The accused has made out the case that there was no material to disclose that there was a legally recoverable debt from the accused.
The Trial Court comes to the conclusion that the said amount is not legally recoverable debt between the complainant and the accused on the date of the issuance of the cheque. The observation that the same is recoverable within three years, is not correct. However, the definite conclusion that there is no privity of contract between the complainant and the accused in respect of this transaction of issuance of cheque in coming to the conclusion that there was no legally recoverable debt. This Court cannot find fault with the reasoning assigned by the Trial Court.
The complainant has not made out a case and the presumption was rebutted by the accused in effectively cross-examining P.W.1 and plausible evidence has been placed before the Court that there was no liability on the part of the accused in issuance of those two cheques. The second mode of rebutting the case of the complainant has been successfully made out by the accused and rebutted the case of the complainant - This Court has already held that the findings of the Trial Court cannot be reversed unless the appreciation of the evidence available on record prima-facie is perverse and there was a glaring error on the part of the Trial Court in appreciating the material and the same should be apparent on record and this Court does not find the same.
Appeal dismissed.
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2020 (11) TMI 889
Dishonor of Cheque - legally recoverable debt or not - rebuttal of presumption u/s 139 of NI Act - complainant in the present appeal who contended that the Trial Court has committed error in not appreciating both oral and documentary evidence and it has erred in casting the burden on the complainant - HELD THAT:- In the case on hand, it has to be noted that there is no dispute with regard to the issuance of the cheque and the same is also not denied by the accused and also has not given any reply notice when the notice was served on him and the defense was set up during the cross-examination that the said cheque was for security purpose to avail the loan by the complainant from the other financier and the same is not proved - there is no dispute with regard to the fact that the primary burden is on the complainant to prove with regard to the transaction and presumption has to be drawn if the cheque is admitted and no reply was given. Whether the probable defense was raised by the accused has to be considered. In the case on hand, the Trial Court has not at all invoked the presumption in favour of the complainant and also not discussed the evidence of the defense, particularly, the evidence of the accused, who has been examined as D.W.1 and also two witnesses, who have been examined as D.Ws.2 and 3 on behalf of the accused.
Whether the Trial Court has committed an error in acquitting the accused in coming to the conclusion that the complainant has not proved legally recoverable debt? - HELD THAT:- The defense of the accused that the said blank cheque was given to avail the financial assistance from the financiers and it is not the case of the accused from whom the complainant has borrowed the money to start the business. It is also an admitted fact that the Hotel Business was commenced in the year 2001 itself and this cheque pertains to the year 2005. When the accused admits his signature available on cheque - Ex.P1 and also on Ex.P6 notice served on him, the accused did not setup any defense immediately and during the course of cross-examination after thought set up a defense that the said cheque was given as security. The Trial Judge failed to consider the evidence in toto both the evidence of complainant and DWs.1 to 3 and not considered the documentary evidence available on record and mainly considered the evidence of P.W.1 and particularly, Ex.P14 - the letter and the said letter is not disputed by the complainant himself, he only got marked the document and the trial Court only concentrated on the source of the complainant.
The Trial Judge did not consider the evidence available on record in toto and failed to discuss the evidence of DWs.1 to 3 and only considered the evidence of PW.1. It is a settled law that the complainant has to prove his case and in the case on hand, the accused also did not dispute the cheque as well as his signature and also he has not given any reply and no complaint was given when the notice was given. If really the said cheque was mis-used he would have given the complaint and categorically admits that he is not having any impediment to give complaint and also no difficulty to give any reply. When such being the case, the presumption is available in favour of the complainant and no doubt the said presumption is rebuttable presumption and the question before this Court is whether the accused rebutted the presumption and I have already discussed in detail, the evidence of DWs.1 to 3, it is clear that the accused himself has suffered the loss in Hotel business and his house was also brought for sale when the Sales Tax of the Hotel was not paid.
The Trial Judge ought not to have come to the conclusion that the source has not been proved and non- examination of two witnesses from whom the complainant has received the money to advance the same in favour of the accused is not fatal - the Trial Court has committed an error in acquitting the accused and not drawn the presumption in favour of the complainant and therefore, it requires an interference of this Court.
The accused is convicted for the offence punishable under Section 138 of the NI Act and directed to pay the amount of ₹ 10 lakhs in favour of the complainant within eight weeks from today. If the accused fails to pay the amount he shall undergo simple imprisonment for a period of one year - Appeal allowed.
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2020 (11) TMI 888
Dishonor of Cheque - submissions made by the learned counsel for the applicant call for adjudication on pure questions of fact, which may be adequately adjudicated upon only by the trial court and while doing so even the submissions made on points of law can also be more appropriately gone into by the trial court in this case - HELD THAT:- This Court does not deem it proper, and therefore, cannot be persuaded to have a pre-trial before the actual trial begins. A threadbare discussion of various facts and circumstances, as they emerge from the allegations made against the accused, is being purposely avoided by the Court for the reason, lest the same might cause any prejudice to either side during trial. But it shall suffice to observe that perusal of the complaint, and also the material available on record make out a prima facie case against the accused at this stage and there appear to be sufficient ground for proceeding against the accused.
If the decision of the Court given in the light of the application does not conclude the proceedings against the accused and he is further required to appear and face the trial, the court shall be at liberty to proceed in accordance with law against the accused and take all necessary steps and measures to procure his attendance as the law permits - It is made clear that no application for extension of time shall be entertained if this order is not availed by the applicant in the stipulated period of time.
Application disposed off.
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2020 (11) TMI 887
Dishonor of Cheque - validity of criminal proceedings - mortgaged property - present petitioner has entered into a registered partition deed with his brother under which, the mortgaged property had fallen to the share of his brother - case of petitioner is that the liability of repayment of the entire loan amount falls on the shoulder of his brother - HELD THAT:- The admitted fact remains that the petitioner was one among the loanee having availed considerable amount as loan from the respondent-bank. The petitioner herein has not denied or disputed that the said loan account has become a default account and the loan amount with interest is yet to be repaid to the respondent-bank. But the only contention of the present petitioner is that the liability to clear the loan falls upon his brother, since the property upon which the loan was lent has gone to his share - For the said contention, the argument of the learned counsel for the respondent that the alleged partition agreement between the accused brothers would not bind the petitioner in a criminal proceeding, cannot be discarded at this stage in this proceeding. If any such contention is there, then it is open for the petitioner to agitate the same at the appropriate stage before the appropriate forum.
Nothing prima facie material is placed by the petitioner to show criminal proceedings initiated against him for the alleged offence under Section 138 of N.I. Act, is prima facie without any merit, as such, has resulted into an abuse of process of law against him - Petition dismissed.
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2020 (11) TMI 886
Dishonor of Cheque - acquittal of accused - Specific defense of the accused is that he had not availed loan on 01.12.2000 and he had availed loan only on 01.12.1999 and the cheque for the said amount was collected on 01.12.1999, which was misused - Whether the Trial Judge has committed an error in acquitting the accused in coming to the conclusion that the very transaction between the accused and the complainant is doubtful and whether it requires interference of this Court? - HELD THAT:- In the case on hand accused not denied the signature available in Ex.P.1 cheque. The only contention is that the said cheque was given at the time of getting the loan on 1.12.1999. If he has not borrowed loan on 1.12.2000 what prevented him to give any reply when two notices were issued to him with regard to payment of loan amount and subsequently on bouncing of cheque, which has not been explained by the accused to rebut the evidence. He denied the availment of loan on 1.12.2000 and there is no answer with regard to the admission made by him during the course of cross- examination when a specific question was put to him. He had admitted that he had availed loan of ₹ 50,000/- from the complainant.
Suppression of fact of earlier transaction - HELD THAT:- In the case on hand no suppression as contended and the same is in respect of earlier transaction. The complaint is in respect of subsequent loan transaction and accused not paid the amount, hence the contention of the accused cannot be accepted.
Accused is directed to pay an amount of ₹ 1,00,000/- in favour of the complainant within a period of 8 weeks from today. If accused fails to pay the amount of ₹ 1,00,000/- within 8 weeks, accused is sentenced to undergo Simple Imprisonment for a period of one year - Appeal allowed.
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