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Showing 121 to 140 of 2364 Records
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2018 (7) TMI 2248
TDS u/s 195 - tax withholding on payments of transponder fees by the Appellant to Intelsat Corporation, USA, ('Intelsat'), are taxable as 'royalty' - India- USA Tax Treaty - HELD THAT:- We note that the Hon’ble Apex Court in the case of G. E. Technology Centre Pvt. Ltd. [2010 (9) TMI 7 - SUPREME COURT] has held that where an amount is payable to a non-resident, the payer’s obligations to deduct tax at source arises only when such remittances is a sum chargeable under the Act, i.e., chargeable u/s. 4, 5, 9 of the Act in the hands of the recipient. It has further been expounded that section 195(2) of the Act is not merely a provision to provide information to the ITO(TDS), so that the department can keep track of the remittances being made to non residents outside India, rather it gets attracted to the case where payment made in a composite manner which has an element of income chargeable to tax in India and the payer seeks determination of the "appropriate proportion of such sum so chargeable". From the above case law it emerges that when in the hands of the nonresident recipient, the sum paid is not chargeable under the Act, there is no liability on the payer to deduct tax at source.
Also in INTELSAT CORPORATION [2011 (8) TMI 1248 - DELHI HIGH COURT] held income received from the activities undertaken by the respondent/assessee would not be exigible to tax in India.
Similar payments received by the Intelsat Corporation USA have been held to be not chargeable to income tax in the hands of the same recipient - no liability fasten on the assessee to deduct tax at source on payments made to Intelsat Corporation USA. Hence, the additional grounds of the assessee deserve to be allowed. Accordingly, we hold that since the Hon’ble High Court has held that the payment was not income chargeable to tax in the hands of the same recipient, there was as a corollary no liability on the part of the assessee (the payer) to deduct tax at source on the similar payment made to the same payee. Hence, the assessee succeeds on the additional ground.
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2018 (7) TMI 2247
Maintainability of appeal - low tax effect - HELD THAT:- As tax effect in the present case as stated by the Appellants-Revenue is less than the prescribed limit of ₹ 50.00 lakhs for filing an appeal before High Court.
Appellants-Revenue does not press this appeal and seeks leave of the Court to withdraw the present appeal in terms of paragraph-13 of the said Circular. Accordingly, in view of the aforesaid Circular issued by the Central Board of Direct Taxes, the present appeal is disposed of as withdrawn without answering the purported substantial questions of law.
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2018 (7) TMI 2246
Inability to take subsequent steps as the application was not uploaded after being admitted - HELD THAT:- The applicant’s petition was admitted on 09.03.2018. However since the same was not uploaded till 2224 June of 2018 and therefore subsequent steps could not be taken. It appears that there was negligence on the part of the Court staff who had failed to take appropriate steps. Mr. Parth Goswami, Advocate along with the IRP is present in Court - The earlier IRP Mr. Yogesh Tyagi is discharged. To come for filing interim report on 31st of August, 2018.
Application disposed off.
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2018 (7) TMI 2245
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Operational Creditors - existence of debt and dispute or not - time limitation - HELD THAT:- Bare in mind the proposition laid down in the MOBILOX INNOVATIONS PRIVATE LIMITED VERSUS KIRUSA SOFTWARE PRIVATE LIMITED [2017 (9) TMI 1270 - SUPREME COURT], there are no doubt to hold that the respondent/corporate debtor herein proved existence of a bona fide dispute, in respect of its liability to pay the amount claimed by the operational creditor. The respondent has succeeded in establishing that there is pre-existing dispute in respect of the amount allegedly due to the operational creditor from the corporate debtor.
Admittedly the last bill on completion of the work contract by the operational creditor has been issued in the month of March, 2014. Admittedly the amount claimed by the operational creditor allegedly due arising out of work orders issued between September 30, 2013 and September 30, 2014. The application in the case in hand has been filed on February 9, 2018. Therefore, the claim of the amount due on the basis of above referred work orders is time barred - the application of question of law of limitation has to be dealt with the facts of the case in hand. Moreover as per the Amendment Ordinance 2018 the provisions of the Limitation Act, 1963 made applicable to the proceedings before the National Company Law Tribunal. Therefore no doubt the law of limitation is applicable and applying the law of limitation it appears to me the claim of the applicant is also barred by limitation. Accordingly the existence of a bona fide dispute established in the case in hand and the claim, if any, is found barred by limitation. This application is therefore, liable to rejected under section 9(5)(ii)(d) of the I and B Code.
Application dismissed.
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2018 (7) TMI 2244
Entitlement to claim the benefit of Section 80-IA - whether the Inland Container Depots (ICDs) under the control of the Respondent, during the relevant period, qualified for deduction under Section 80-IA(4)? - whether activities undertaken by the assessee do not fall within clause (d) of the Explanation to Section 80IA(4) defining the term infrastructure facilities? - HELD THAT:- This special leave petition is disposed of in the light of our order dated 24th April, 2018 passed in the case of Commissioner of Income Tax Delhi-I v. M/s. Container Corporation of India Limited [2018 (5) TMI 359 - SUPREME COURT] and connected matters.
Pending application, if any, stands disposed of.
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2018 (7) TMI 2243
Penalty imposed u/s 271E and 271D - Accepting and repayment of loan / deposits through journal entries - genuineness of the transactions were not established by the assessee - Undisclosed receipt on account of sale of car parking in the housing projects, cash loans/deposits, etc - assessee violated the provisions of section 269SS - stand of the assessee is that the journal entries passed for transaction assigning debts and liabilities among sister concern and reimbursement of expenses do not constitute acceptance of loan or deposit of money as per the provisions of section 269S - HELD THAT:- As decided in VIMAL ENTERPRISES VERSUS JOINT, CIT, RANGE 31 (3) MUMBAI [2017 (8) TMI 447 - ITAT MUMBAI] in view of provision of section 273B and penalty under section 271D for contravention of section 269SS cannot be held to be justified and the Ld. Assessing Officer was directed to delete the penalty. Also see AJITNATH HI-TECH BUILDERS PVT. LTD [2018 (2) TMI 603 - BOMBAY HIGH COURT] - Decided against revenue.
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2018 (7) TMI 2242
Penalty u/s. 271D/272E - genuineness of the transaction made through journal entries - assessee failed to establish the compelling reasons or genuine business constraints or reasonable cause for having transactions in respect of each and every journal entry with its group concerns - HELD THAT:- As per decision of M/S. NATIONAL STANDARD INDIA LTD. [2018 (7) TMI 1828 - ITAT MUMBAI] in which the penalty levied in the similar circumstances have been ordered to be deleted on the basis of decision of the jurisdictional High Court in the case of CIT Vs. Triumph International Finance Ltd. [2012 (6) TMI 358 - BOMBAY HIGH COURT] There are number of judgments have also been relied upon by the Ld. Representative of the assessee in which it is specifically held that the journal entry would not fall under the purview of Section 269SS of the ACT. Further, it also came into noticed that the case of the assessee pertains to the A.Y. of 2008-09, therefore, the ratio of decision in case title as CIT Vs Triumph International (I) Ltd [2012 (6) TMI 358 - BOMBAY HIGH COURT] is not applicable. In the said discussion, we are of the view that the CIT(A) has decided the matter of controversy judiciously and correctly which is not liable to be interfere with at this appellate stage. Accordingly, these issues are decided in favour of the assessee against the revenue.
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2018 (7) TMI 2241
Penalty levied u/s 271D - repayment of loan /deposit by way of journal entries - Proof of bonafide belief - HELD THAT:- The journal entries have been made with the group concern under the bonafide belief that such transaction would not be hit by the provisions of section 269 SS in view of the various judicial decision on this issue, including the decision of Delhi High Court in case of NOIDA Toll Bridge [2003 (1) TMI 46 - DELHI HIGH COURT]and such loan by way of journal entries transaction were undertaken for various commercial reasons like assigning or receivable for operational efficiency, payment on the group concern for squaring up connection, for ease of consolidation of accounts, rectification entries etc.
Commissioner (Appeals) after referring the decision of Bombay High Court in Trump International [2012 (6) TMI 358 - BOMBAY HIGH COURT] held that repayment of loan /deposit by way of journal entries was in contravention of provision of section 269SS has been given after the close of financial year 2011-12 relevant to assessment year 2012-13. The learned Commissioner (Appeals) concluded that reasons disclosed by assessee constitute reasonable cause within the meaning of section 273B of the Act; particularly in light of the fact that there is no finding that such transaction was undertaken to evade the tax. The learned Commissioner (Appeals) while considering the contention of assessee also observed that there is no finding that transaction by way of journal entries were not made to evade tax. The finding of the CIT(A) is based upon the decision of Bombay High Court in the assessee’s sister concern case title as CIT Vs AjinathHitech builders Private Limited& others [2018 (2) TMI 603 - BOMBAY HIGH COURT]
Accordingly, we are of the view that the CIT(A) has decided the matter of controversy judiciously and correctly which is not liable to be interfere with at this appellate stage. Resultantly, the appeal of the revenue is hereby ordered to be dismissed.
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2018 (7) TMI 2240
Presentation of present petition as a petition under Article 227 of the Constitution of India - HELD THAT:- It has been specifically observed to the effect that the nature of the suit would not change by virtue of granting the amendment application where the property has initially been valued at ₹ 13,50,000/- but as the market value was at ₹ 1,20,00,000/- the applicant plaintiff therein had submitted an application for amendment so as to give the correct value of the suit property in the plaint and taking the same into account the amendment sought was granted.
In view of the verdicts of the Supreme Court in Mount Mary Enterprises v. Jivratna Medi Treat Private Limited [2015 (1) TMI 1398 - SUPREME COURT], Lakha Ram Sharma v. Balar Marketing Private Limited [2003 (8) TMI 578 - SUPREME COURT] and SUBHASHINI MALIK VERSUS S.K. GANDHI AND ORS. [2016 (9) TMI 1613 - DELHI HIGH COURT] and also the factum that the amendment sought by the plaintiff does not in any manner prejudice the defendant No. 2 i.e., the present petitioner in any manner and does not change the nature of the suit also in any manner and taking into account the factum that defendant No. 2 has himself raised the issue in relation to the aspect of under valuation of the suit property and for the purpose of the court fees and jurisdiction qua which issue no. 8 was framed at the time of framing of the issues coupled with the factum that virtually the trial has yet to commence in as much as the testimonies of the witnesses are yet to be led, it is held that there is no merit in the prayer made by the petitioner seeking the setting aside of the impugned order dated. 2.6.2018 qua the amendment sought by the respondent No. 1 in relation to the para 19 of the plaint.
Petition dismissed.
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2018 (7) TMI 2239
TP Adjustment - working capital adjustment - provision written back was accepted to be operating margin of assessee in AY 2009-10 - In rectification application, assessee has submitted that these provisions no longer are required by assessee for year under consideration and has to be reversed because of which these provisions are to be treated as operating items for computation of working capital adjustments - HELD THAT:- We find considerable force in submissions of Ld.Counsel, as mistake has crept in which is apparent from record. Ld.TPO even after directions by DRP has not granted working capital adjustment by not considering the written back amount as operating items. In the application for rectification filed by assessee, assessee has submitted all relevant information/details regarding the breakup of the provision written back.
We therefore direct Ld.TPO to recompute working capital adjustment by considering these items as operating items after due verification. It is observed that DRP has directed to compute working capital adjustment by using safe harbour rules. It is very much evident from observations of order passed by DRP that CBDT had notified these rules vide notification dated 18/09/13. However Hon’ble Delhi Tribunal in case of Rolls-Royce India Pvt. Ltd. vs. DCIT [2015 (12) TMI 516 - ITAT DELHI] has held it to be applicable from 18/09/2013.
With the above direction we remit this issue back to Ld. TPO/AO for recomputing the working capital adjustment by considering provisions written back as operating items without applying Safe Harbour Rules.
Adjustment in respect of receivables - TPO computed interest on outstanding receivables at the rate equal to 11.69 % LIBOR (SBI base rate) +300 basis points - HELD THAT:- There is no specific period mentioned for the payments to be received from its AE. Ld.TPO, therefore estimated a period of 30 days as allowable for payment receivables and any delay beyond 30 days has been bench marked as international transaction by imputing interest at the rate of 11.69% LIBOR +300 basis points.
We deem it appropriate to set aside the impugned order on this issue and remit the matter to the file of the Assessing Officer/TPO for deciding it in conformity with the above referred judgment in case of Orange Business Services India Solutions Pvt. Ltd [2018 (2) TMI 1151 - ITAT DELHI]
Disallowance of 25% of expenditure incurred towards sales promotion on adhoc basis and expenditure incurred by assessee towards legal and professional expenses - HELD THAT:- It is observed that corporate tax grounds raised before us involve disallowance towards sales promotion expenses and legal and professional expenses. Application for admitting additional evidence in respect of sales promotion expenses has been filed by assessee before us.
We therefore set aside these issues to Ld.AO for verification of invoices placed in the form of additional evidences in respect of the sales promotion expenses and then allow the claim as per law. Assessee is directed to file evidence in respect of legal and professional expenses if any, to Ld.AO. Ld.AO shall verify the same and consider the claim of assessee as per law.
Disallowance of prior period expenses - HELD THAT:- It is observed that expenses claimed by assessee pertain to prior period, in respect of which additional evidence has been filed. This needs to be verified by Ld.AO. Ld.AO is directed first to apply test of allowability of these expenses u/s.37(1). In the event these expenses passed through threshold test, Ld.AO shall consider whether these are to be allowed as deduction for the year under consideration.
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2018 (7) TMI 2238
Expenses incurred on account of advertisement, publicity and sales promotions - HELD THAT:- Tribunal found such addition to be erroneous.
TDS u/s 195 - TDS liability on income accrued outside India - HELD THAT:- Tribunal has considered in detail the nature and expenses in respect of which the assessee was sought to be penalised for not deducting the tax deducted at source, holding that these expenses were in respect of the income accrued outside the territory of India for services rendered.
Deduction allowed for writing off advance - Revenue’s stand is that the course followed by the Commissioner or the Tribunal was not permissible, as specific deduction was not claimed in the return - HELD THAT:- There are two authorities of this Court in the cases of Binani Cement Ltd. [2015 (3) TMI 849 - CALCUTTA HIGH COURT] and Commissioner of Income-Tax Vs. Britannia Industries Ltd. [2017 (7) TMI 502 - CALCUTTA HIGH COURT] where deduction claimed for the first time before the appellate authority was found to be permissible.
Revenue relies on the decision of the Supreme Court in the case of Goetze (India) Ltd. Vs. Commissioner of Income-Tax reported in [2006 (3) TMI 75 - SUPREME COURT]. However this authority was considered in Britannia Industries Ltd. where it was held that the impermissibility of such a course was confined to the case of the assessing officer only
Treatment of writing off amount which was invested by the assessee in a joint venture agreement - The Tribunal allowed deduction of the same as Revenue expenditure. Revenue’s stand on the other hand is that such investment was in capital assets and Revenue’s expenditure ought not to have been allowed by the Tribunal following the decision in Binani Cement Ltd [2015 (3) TMI 849 - CALCUTTA HIGH COURT] allowed the claim of the assessee. We do not find any error of law in such a course being adopted as the point involved is covered in favour of the assessee in the aforesaid authority.
Treatment of certain expenses - Unclaimed salary and wages and depreciation were allowed by the two statutory appellate fora - HELD THAT:- There is concurrent finding of fact on the points involved in these questions which cannot be held to be perverse. In our opinion, no substantial question of law is involved in this appeal. The appeal and the stay petition shall stand dismissed.
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2018 (7) TMI 2237
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Operational Creditors - existence of debt and dispute or not - HELD THAT:- On careful perusal of the documents it is noticed that, the Invoice raised by the Operational Creditor has never been acknowledged by the Debtor - there is nothing on record which can prove that the Operational Creditor was enraged by the Debtor for providing Legal services, except the averment made by the Operational Creditor. The Operational Creditor has not produced any Vakalatnama/Memo of Appearance, by which the Operational Creditor has appeared before Court of Law on behalf of Debtor.
Though it is accepted position that the Operational Creditor was engaged by the Debtor for his Legal services, it is crystal clear that for the services provided from Aug. 2005 to Jan. 2011 the Operational Creditor has duly received the fixed Professional Fees by the Debtor. And further, for the period of 2012-2014 he has received the amount of ₹3,60,000/- after deduction of ₹ 40,000 as TDS as full and final payment for his Services - the Debt claimed in this Petition/Application does not in existence and in our conscientious view this Petition/Application does not survive in the eyes of Law and deserves Rejection.
The Operational Creditor has failed to prove that the amount of Debt as claimed ts in existence as defined U/s. 3 (11) of the Code and therefore, as the claimed amount is not in existence this Petition/Application is to be Rejected - petition dismissed.
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2018 (7) TMI 2236
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Operational Creditors - existence of debt and dispute or not - HELD THAT:- On careful perusal of the documents it is noticed that, the Invoice raised by the Operational Creditor has never been acknowledged by the Debtor - there is nothing on record which can prove that the Operational Creditor was enraged by the Debtor for providing Legal services, except the averment made by the Operational Creditor. The Operational Creditor has not produced any Vakalatnama/Memo of Appearance, by which the Operational Creditor has appeared before Court of Law on behalf of Debtor.
Though it is accepted position that the Operational Creditor was engaged by the Debtor for his Legal services, it is crystal clear that for the services provided from Aug. 2005 to Jan. 2011 the Operational Creditor has duly received the fixed Professional Fees by the Debtor. And further, for the period of 2012-2014 he has received the amount of ₹3.60,000/- after deduction of ₹40,000 as TDS as full and final payment for his Services - the Debt claimed in this Petition/Application does not in existence and in our conscientious view this Petition/Application does not survive in the eyes of Law and deserves Rejection.
The Operational Creditor has failed to prove that the amount of Debt as claimed ts in existence as defined U/s. 3 (11) of the Code and therefore, as the claimed amount is not in existence this Petition/Application is to be Rejected - petition dismissed.
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2018 (7) TMI 2235
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Operational Creditors - existence of debt and dispute or not - HELD THAT:- On careful perusal of the documents it is noticed that, the Invoice raised by the Operational Creditor has never been acknowledged by the Debtor - there is nothing on record which can prove that the Operational Creditor was enraged by the Debtor for providing Legal services, except the averment made by the Operational Creditor. The Operational Creditor has not produced any Vakalatnama/Memo of Appearance, by which the Operational Creditor has appeared before Court of Law on behalf of Debtor.
Though it is accepted position that the Operational Creditor was engaged by the Debtor for his Legal services, it is crystal clear that for the services provided from Aug. 2005 to Jan. 2011 the Operational Creditor has duly received the fixed Professional Fees by the Debtor. And further, for the period of 2012-2014 he has received the amount of ₹ 3.60,000/- after deduction of % 40,000 as TDS as full and final payment for his Services - the Debt claimed in this Petition/Application does not in existence and in our conscientious view this Petition/Application does not survive in the eyes of Law and deserves Rejection.
The Operational Creditor has failed to prove that the amount of Debt as claimed ts in existence as defined U/s. 3 (11) of the Code and therefore, as the claimed amount is not in existence this Petition/Application is to be Rejected - petition dismissed.
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2018 (7) TMI 2234
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Operational Creditors - existence of debt and dispute or not - HELD THAT:- On careful perusal of the documents it is noticed that, the Invoice raised by the Operational Creditor has never been acknowledged by the Debtor - there is nothing on record which can prove that the Operational Creditor was enraged by the Debtor for providing Legal services, except the averment made by the Operational Creditor. The Operational Creditor has not produced any Vakalatnama/Memo of Appearance, by which the Operational Creditor has appeared before Court of Law on behalf of Debtor.
Though it is accepted position that the Operational Creditor was engaged by the Debtor for his Legal services, it is crystal clear that for the services provided from Aug. 2005 to Jan. 2011 the Operational Creditor has duly received the fixed Professional Fees by the Debtor. And further, for the period of 2012-2014 he has received the amount of ₹ 3,60,000/- after deduction of ₹ 40,000 as TDS as full and final payment for his Services - the Debt claimed in this Petition/Application does not in existence and in our conscientious view this Petition/Application does not survive in the eyes of Law and deserves Rejection.
The Operational Creditor has failed to prove that the amount of Debt as claimed ts in existence as defined U/s. 3 (11) of the Code and therefore, as the claimed amount is not in existence this Petition/Application is to be Rejected - petition dismissed.
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2018 (7) TMI 2233
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Corporate Applicant - existence of debt and dispute or not - HELD THAT:- On reading the Petition and the supporting documents annexed with the Petition, this Bench is of the view that the Corporate Applicant has committed default and the Petition contains the particulars as required u/ s 10 of the Code. Hence, this Bench hereby admits this petition, declaring moratorium.
Application admitted.
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2018 (7) TMI 2232
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Operational Creditors - existence of debt and dispute or not - ex-parte order - HELD THAT:- The applicant has filed an affidavit of service deposing that steps for service have been taken in terms of the directions given by the Bench vide order dated 23.05.2018. Notice from the bench has also been send by the Email dated 22.05.2018. However neither the director nor any other person has appeared or filed reply before this court. Since the amount claimed by Operational Creditor has not been disputed by the Respondent despite being given adequate opportunity to file reply. The respondent has been proceeded ex-parte vide order dated 3 1.05.2018.
The present application is complete and the Operational Creditor is entitled to claim its dues towards the goods supplied to the corporate debtor and there has been a default in payment of the operational debt. Therefore, on fulfilment of the requirements of section 9 (5) (i) (a) to (e) of the Code, the present application is admitted.
Application admitted - moratorium declared.
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2018 (7) TMI 2231
Reopening of assessment u/s 147 - Investment made by assessee - Eligibility of reasons to believe - HELD THAT:- We find that in the facts of the present case, there is no reference to any fact, information or tangible material referred to by the AO to hold that some material was considered by him after which he formed the belief that income has escaped assessment. AO notes the bare fact as available in AIR information. Apart from that there is no other material referred. The mere fact that on investment is made in a specific year by itself cannot be a triggering fact or for reopening. It may be a triggering factor to consider the record and then record reasons referring to material which led to the formation of the belief.
AO is well aware that in the returns there was no column for referring to investments made. Thus the so called justification that as per the office records the assessee had not declared this transactions in her income tax return by itself is of no relevance and supports the assessee's arguments that no other material was seen by the AO and he has blindly accepted this information as an act of income escaping assessment. There is no material referred to by him which can be said to have been considered by the AO so as to demonstrate that he had formed his view taking into consideration the facts. The reasons recorded shows that the AO in the facts of the present case the AO has proceeded to act on the basis of suspicions.
DR was unable to show any material which could be said to have been considered before the formation of belief. The mere fact that the assessee has made investment, cannot be said to be information warranting reopening by itself.
The AIR information that the assessee had made an investment could be a triggering fact for creating a suspicion which the AO was under law required to cross check from the information by way of returned income for the last few years and then he could be said to have formed a belief that such an investment could have been made or not. We find no such effort had been done we further find support from the decision of the Co-ordinate Bench in the case of Amrik Singh [2016 (5) TMI 768 - ITAT AMRITSAR].
Reopening based on suspicions cannot be upheld the AO having failed to record the reasons for formation of his belief which only suggest that he has proceeded on surprising - Decided in favour of assessee.
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2018 (7) TMI 2230
Dishonor of Cheque - legally enforceable liability or not - rebuttal of presumption - cross-examination of witnesses - HELD THAT:- It is now well settled that at the stage of issuance of process, the Magistrate cannot consider any probable defence in as much as the accused is not before the Court when the order of issuance of process is passed. Thus, an order issuing process cannot conceivably be challenged on the basis of any actual or probable defence, which, as the learned Sessions Judge has rightly found, can only be gone into at the trial. However, it is entirely a different matter, when on the basis of the allegations in the complaint, the notice and the documents produced by the complainant and even after taking them at the face value, prima facie, no offence is made out.
The respondent presented the cheque bearing No. 079539 dated 2-4-2015 on 25-5-2015, which got dishonoured as the concerned account was closed sometime in the year 2010. In the notice, there was a specific averment made that the two undated cheques were issued by way of security. The respondent did not claim in the complaint that the cheques were issued by way of security. However, rest of the averments as made in the notice, find place as they are in the complaint. The question, in such circumstances, is whether the dishonour of the cheque can give rise to an offence under section 138 of the Act.
Coming to the present case, on the respondent's own saying, the subject cheque (along with other cheque, in respect of which the respondent chose not to file any complaint) was undated and in all probability, was passed somewhere in the year 2006, at the inception of the contract and was agreed to be presented for encashment after 7 1/2 years, which the respondent resultantly did by putting the date 2-4-2015. The subject cheque is shown to be for an amount of ₹ 11,25,000/-. Thus, on the basis of the averments in the notice as well as the complaint itself, it cannot be accepted, prima facie, that there was a liability of ₹ 11,25,000/- against the petitioner towards the respondent at the time when the cheque was signed and passed on to the respondent. In fact the averments would show that there were two undated cheques passed by the respondent - Admittedly, there is not even an averment that any such amount was due and outstanding on or about the date, on which the two cheques were issued by the petitioner.
There cannot be any manner of dispute with the proposition that once the presumption arising under section 118 read with section 139 of the Act is raised, it can be rebutted by the accused on preponderance of probability at the trial. This can be done on the basis of cross-examination of the complainant and his witnesses, if any, and/or by leading independent defence evidence - Here is a case, wherein on the say of the respondent himself and taking the contents of the notice and the complaint on their face value, it cannot be said that the cheque was issued for the discharge of any legally enforceable debt or liability, as on the date of issuance of the cheque.
The learned Magistrate as well as the learned Sessions Judge has failed to consider the relevant aspects and the impugned order issuing process, thus, cannot be sustained - Petition allowed.
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2018 (7) TMI 2229
Dishonor of Cheque - rebuttal of presumption - evidence in support of defence or not - whether presumption under Section 139 read with Section 118 of the aforesaid Act would operate against the respondent (original accused) for an alleged offence of dishonour of cheque under Section 138 of the said Act? - whether the respondent had rebutted such presumption when he failed to file reply to the complaint of the appellant and he did not adduce any direct evidence in order to support his defence? - HELD THAT:- Although presumption does arise against the accused in such cases under Sections 118 and 139 of the said Act, the presumption is rebuttable on the touchstone of preponderance of probabilities. The accused is also entitled to show that the foundational facts on which such presumption arises have not been proved by the complainant and further that the accused can rebut a presumption under the said provisions, either by adducing direct evidence in support of his stand or by discrediting the complainant in cross-examination to demonstrate that his defence was probable. On the accused demonstrating the real facts of the matter either by direct evidence or by showing that the evidence and material placed on record by the complainant himself was not believable and that it stood discredited, the presumption would cease to operate against the accused.
In the present case, it was not disputed that the signatures on the cheques were that of the respondent. It was argued that the cross-examination of the appellant demonstrated that he had failed to support his case of having advanced cash hand loan to the respondent. It was further contended that the cross-examination also demonstrated that the cheques were issued for some other transaction and not for repayment of hand loan as claimed by the appellant - the appellant failed to produce any material in support of his claim that he had indeed advanced cash hand loan of ₹ 2 lakhs to the respondent. This was a foundational fact in the present case because according to the appellant the cheques in question had been issued by the respondent in order to repay the said loan amount. The appellant failed to discharge the initial burden to show that he had required funds for advancing money to the respondent.
A perusal of the statements made in cross-examination by the appellant shows that he has completely failed to prove the foundational fact of having advanced loan to the respondent. Therefore, his claim that the cheques in question were issued by the respondent for repayment of the loan could not be accepted. The failure on the part of the appellant to produce his account statement and absence of entry in accounts maintained by him regarding loan advanced to the respondent, does show that there was no material to support the basic facts on which the entire case of the appellant was based - As the foundational facts were not established by the appellant in the present case, it cannot be said that the trial Court committed any error in holding that the respondent deserved to be acquitted. The appellant's case stood completely discredited in cross-examination and, therefore, he could not succeed before the trial Court riding on the presumption said to operate in his favour under Sections 118 and 139 of the aforesaid Act.
Appeal dismissed.
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9911796707
