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Showing 261 to 280 of 1526 Records
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2023 (10) TMI 1266
Calculation of deduction u/s 36(1)(viii) - quantum of total revenue from the operations[denominator] - reduction of interest on income tax refund from numerator (i.e. business income) as well as denominator (i.e. total revenue from operations) while calculating deduction - HELD THAT:- According to the assessee the amount of interest on income tax refund should be reduced from the total revenue from the operations also as same is not derived from the operations of the assessee bank.
We agree with the arguments of assessee because interest on income-tax refund is not part of the business activity of the assessee and therefore, same cannot be form part of the total revenue from the operations also therefore, same should be excluded for the purpose of quantum of total revenue from the operations.
We find that the Tribunal [2020 (4) TMI 13 - ITAT MUMBAI] has also directed the Assessing Officer to exclude the interest on income tax refund both from the profits and gains of the business as well as total revenue from the operations.
We accordingly set aside the finding of the lower authorities and direct the AO to reduce the quantum of interest of income-tax refund from the total revenue from operations and thereafter compute the deduction u/s 36(1)(viii) of the Act accordingly. The grounds of appeal of the assessee are accordingly allowed.
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2023 (10) TMI 1265
Revision u/s 263 - scope of limited scrutiny - as per CIT AO's order as held as erroneous so far as prejudicial to the interest of the revenue on the ground that the AO has not examined applicability of the Percentage Completion Method - Computation of income from construction and service contracts u/s 43CB - HELD THAT:- It is pertinent to note that the method of accounting was not subject matter of limited scrutiny taken up through CASS. Percentage Completion Method has been made compulsory for the real estate business vide amendment by Finance Act 2018 whereby section 43CB was introduced w.e.f. 01.04.2017. Prior to the said amendment it was not mandatory for the real estate business to apply Percentage Completion Method as for the year under consideration the newly inserted section 43CB is not applicable
Having held that the provision of section 43CB are not applicable for the year under consideration the question arises is whether the AO can go beyond the subject matter of limited scrutiny while passing the assessment order. The answer to this question is certainly not without converting the limited scrutiny into complete scrutiny. Therefore, in case the AO proceeded within the scope of limited scrutiny and not taken up any issue beyond the scope of limited scrutiny the same can be held to be erroneous for lack of inquiry.
It is not open to the AO take up any issue which is not subject matter of the limited scrutiny until and unless the limited scrutiny is controverted into complete scrutiny. Hence not conducting an inquiry on the issue beyond subject matter of limited scrutiny would not be considered as lack of inquiry on the part of the AO so as to render the order of the AO erroneous so far as prejudicial to the interest of revenue.
When the assessee is consistently following the Project Completion Method which is not prohibited by law the acceptance of the same by the AO cannot be held as erroneous decision on the part of the AO and consequently the Pr. CIT cannot invoke the provisions of section 263 of the Act on a claim which is bona fide and a possible view not prohibited by law. Accordingly, in the facts and circumstances of the case and following the decision of Ashoka Hitech Builders (P.) Ltd. [2018 (8) TMI 440 - ITAT INDORE] we hold that the impugned order passed u/s 263 of the Act is not sustainable in law and liable to be set aside. Decided in favour of assessee.
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2023 (10) TMI 1264
Accrual of Capital gain - sale of land or not? - real owner - transfer u/s 2(47) concluded of capital asset or not? - Assessee pleaded before the AO that it was a “Watan Land” hence there will be no cost of acquisition and hence no capital gain - assessee also pleaded before AO, that no possession has been handed over, only 10% of the total consideration has been received by the assessee and land has been acquired by the Government - AR submitted that Government of Maharashtra has passed an order vide which Government of Maharashtra held that land belongs to “CIDCO”
HELD THAT:- As on perusal of the Sale deed it is observed that said Sale Deed there is 7/12 extract duly signed by “TALATHI” i.e. revenue officer which shows the Assessee as Owner of the impugned Land. Thus, as per the said 7/12 extract the Assessee seems to be owner of the Land on 31/07/2008. CIDCO has been shown under the other rights. In these facts, CIT(A)’s findings that assessee was not the owner of the land at the time of sale is factually incorrect and this fact needs further investigation.
It is also a fact mentioned in the Revenue Minister’s Order dated 24/11/2008 that the impugned land was ‘Watan Land’. Assessee has filed copy of Sanad granting Watan to the assessee.
AO and Ld. CIT(A) has not mentioned about the Sanad granting ‘Watan’ to the assessee. This aspect has not been considered by the AO and Ld. CIT(A) in the order while deciding the issue of Cost of acquisition for Long Term capital Gain.
Also pleaded before us that the possession of the impugned land was never handed over to the purchaser Mr. Kukreja. AO in the Assessment Order has mentioned that Possession of the land was transferred over to Kukrejas. Subsequently the AO in the remand report submitted to the Ld. CIT(A) admitted that the possession of the impugned land was with the CIDCO. Thus, there are major factual errors in the Assessment Order and ld. CIT(A)’s order.
Assessment Order is set aside to the Assessing Officer for denovo adjudication after considering all the submission of the assessee and after making necessary inquiries if required. Grounds of appeal raised by the Assessee are allowed for Statistical Purpose.
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2023 (10) TMI 1263
Undisclosed income - Difference between income as per financials and income as per Form 26AS - CIT(A) deleted the addition - only grievance of the Revenue was that when the additional evidence in the form of reconciliation sheet has been taken on record, provisions contained under rule 46A of IT Rules need to be complied with by providing opportunity of being heard to the assessee - HELD THAT:- We are of the considered view that the assessee has brought on record reconciliation of the account as extracted by the AO of the assessment order but before the Ld. CIT(A) the assessee has filed comprehensive explanation and reconciliation to decide the issue in question. When the Ld. CIT(A) has coterminous power there was no need to call for the remand report from the AO moreover the issue was pertaining to reconciliation of the account only which stood reconciled as duly explained in the impugned order by the Ld. CIT(A). Decided against revenue.
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2023 (10) TMI 1262
Income taxable in India - receipts on account of support and maintenance services to its customers in India - Fees for Technical Services (‘FTS’) under the Act and also India-Singapore DTAA - DRP has arrived at the conclusion of taxability of IT Support service charges as FTS by distinguishing the earlier years’ tribunal orders - HELD THAT:- As decided in own case [2023 (1) TMI 1304 - ITAT PUNE]DRP in the earlier orders did not draw any such distinction and held the entire amount as chargeable to tax as royalty in the light of the decision in Samsung [2011 (10) TMI 195 - KARNATAKA HIGH COURT]- When the matter came up before the Tribunal, the decision inENGINEERING ANALYSIS [2021 (3) TMI 138 - SUPREME COURT] had been delivered by then, based on which the decision of the AO, treating the composite amount as royalty, was reversed.
When neither the AO nor the DRP had treated the two streams of income as separate from each other, having different connotation in terms of the DTAA, there could have been no question of the Tribunal setting up a new case. Be that as it may, we have eloquently discussed the issue above and reached the conclusion that the income from IT Support services, even if viewed independent of software license income, is not chargeable to tax. Decided in favour of assessee.
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2023 (10) TMI 1261
Suspension of Customs Broker License - handling large number of containers which would be arriving at the port everyday.
The petitioner contended that around more than 360 employees are employed by the petitioner for carrying out its cargo handling services and therefore, a serious prejudice would be caused if the impugned order to the extent it suspends the licence of the petitioner is allowed to operate.
HELD THAT:- Having perused the record it would be appropriate for the petitioner to avail the remedy of an appeal, so that the rival contentions of the parties on the aspects of facts and law can be adjudicated before the Tribunal.
Since the petitioner is a running concern employing more than 350 employees and handling large number of consignments day-in day-out, if the suspension order is not stayed certainly a prejudice would be caused to the petitioner who is dealing with the cargo belonging to third parties, further the petitioner has also more than 360 employees.
Petitioner is permitted to approach the Tribunal in an Appeal to assail the order dated 20 October 2023 passed by the Commissioner of Customs. Let the Appeal be filed along with the stay application within a period of two weeks from the date of uploading the present order - Petition disposed off.
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2023 (10) TMI 1260
Classification of imported goods - Quicklime - to be classifiable under Customs Tariff Item 2522 10 00 as claimed by the appellants; or, is it classifiable under Customs Tariff Item 2825 90 90 as contended by the Department? - HELD THAT:- From careful examination of the tariff entries of chapter heading 2522 & 2825, it reveals that it is not the case that the goods covered under CTH 2522 and CTH 2825 represent contending classification for applying GIR 3 as made out by Revenue. This is for the reason that quick lime cannot be referred to as containing wholly or partly of goods of CTH 2522 and CTH 2825. There is clear exclusion of calcium oxide and hydroxide of CTH 2825 from the scope of CTH 2522, and only separate chemical elements or separate chemically defined compounds are covered under the scope of CTH 2825.
n the present case, the facts reveal that the imported goods are quicklime. There is no case of mixture of different material or substance to merit application of GIR 2 or 3. Thus, the Revenue’s argument for classification of quick lime under heading 2825 as it occurs last among other classification under heading 2522 is not legally sustainable - there is no case for application of Rule 3 of GIR in this case. In view of the above, the imported goods are appropriately classifiable under CTH 2522 10 00.
From the above HSN explanatory notes it could be concluded that ‘lime stone’ being a mineral product is calcined to produce ‘quicklime’. Further, when lime stone is subjected to the process of low temperature of calcination then ‘hydraulic lime’ is produced. These two products would remain classifiable under Chapter heading 2522. However, when the lime stone is subjected to high temperature calcination ranging as high as 1340°C, dissociation of limestone happens i.e., a general chemical process in which molecules (or ionic compounds such as salts, or complexes) gets separated or split into other things such as atoms, ions, or radicals, usually in a reversible manner. In simple words, it can be said that the mineral product ‘quicklime’ when subjected to high temperature calcination becomes ‘calcium oxide’ by eliminating carbon-dioxide (CO2) and such calcium oxide is not covered under Chapter 25, as these are chemical products classifiable under heading 2825.
From the test reports of samples of imported goods, which are relied upon documents in the adjudication proceedings, we find that the chemical test conducted by the Central Revenue Control Laboratory (CRCL), Jawaharlal Nehru Custom House, on the samples of imported goods and its report dated 18.04.2018 indicate that the description of the goods as ‘white lumps of irregular shapes & sizes along with waste powder - in terms of the HSN explanatory notes, both on account of presence of specified material making it not in pure state and the composition of calcium oxide not upto the requisite 98% making it not a product of high degree, would not enable the imported goods to be classified under sub-heading 2825.
The imported goods ‘quicklime’ would be appropriately classifiable under Customs Tariff Item 2522 10 00 and not as ‘other’ under the Customs Tariff Item 2825 90 90, as claimed by Revenue - the impugned order passed by the learned Commissioner (Appeals) dated 05.04.2021 cannot stand for judicial scrutiny by confirming the classification under the Customs Tariff Item 2825 90 90 in respect of the impugned goods and thus, the same is liable to be set aside.
The confirmation of demands and penalties imposed on the appellants in the impugned orders are set aside - Appeal allowed in favour of appellant.
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2023 (10) TMI 1259
Seeking transfer of winding up proceedings to National Company Law Tribunal (NCLT) - HELD THAT:- The said issue of transfer of pending cases has also been considered by this Court in Citicorp International Limited v. Shiv-Vani Oil & Gas Exploration Services Limited [2023 (7) TMI 1188 - DELHI HIGH COURT] wherein the Court relying on the decision of the Supreme Court in ACTION ISPAT AND POWER PVT. LTD. VERSUS SHYAM METALICS AND ENERGY LTD. [2020 (12) TMI 535 - SUPREME COURT] has held that It is only where the winding up proceedings have reached a stage where it would be irreversible, making it impossible to set the clock back that the Company Court must proceed with the winding up, instead of transferring the proceedings to the NCLT to now be decided in accordance with the provisions of the Code.
A conjoint reading of Rule 5 of the notification dated 7th December, 2016 along with the aforementioned judgment would show that in cases where the petition is not at an advanced stage, the matter is to be transferred to the NCLT.
Considering the fact that the winding up proceedings are at a nascent stage and only initial publication/citation was done in the newspapers, this Court is of the opinion that the matter cannot proceed before two fora - IBC being a statute which is meant to encourage revival of the company, it is deemed appropriate to transfer the present petition to NCLT, Allahabad Bench, Prayagraj.
Petition disposed off.
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2023 (10) TMI 1258
Insider trading in the scrip of the Company - corporate announcement regarding an update on the real estate operation of the Company - penalty of Rs. 10 lakhs u/s15G(i) of the SEBI Act imposed - allegation levelled against the appellant [Vice Chairman and Managing Director of the Company and also a Member of the Audit Committee] was that the Company made corporate announcement regarding an update on the real estate operation of the Company for third quarter on the Bombay Stock Exchange and the National Stock Exchange of India Limited - corporate announcement revealed that the Company during its second quarter had achieved a new sales volume which was up by 5.6% as compared to the preceding quarter - appellant as urged that the real estate operational data was not a price sensitive information - HELD THAT:- Corporate announcement regarding update on the real estate operation of the Company was a price sensitive information. UPSI has been defined under Regulation 2(1)(n) which means any information that is not generally available and which upon becoming generally available is likely the materially affect the price of the securities.
In the instant case, the real estate operational update were part of the financial results for the quarter ended 30.09.2017. It was a price sensitive information and upon announcement it had a material impact in as much as the price of the scrip increased.
Appellant was in possession of this price sensitive information and had traded in the scrip during the period in question. In our opinion, obtaining necessary pre clearance and making requisite disclosures were not enough to show that his trades were not motivated by UPSI.
Regulation 4 of the PIT Regulations prohibits any insider from trading in securities while in possession of UPSI. The proviso to Regulation 4 of the PIT Regulations gives a window to the insider to prove his innocence by demonstrating the circumstances under which he has traded. In the instant case, the appellant is an insider and, therefore, it was upon him to prove that the trades were not motivated by UPSI. We find that no plausible explanation has been given in this regard.
Appellant had traded in the scrip of the Company while in possession of UPSI and had violated Section 12A(d) and (e) of the SEBI Act, 1992 and Regulation 4(1) of the PIT Regulations. No error in the impugned order. Appeal fails.
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2023 (10) TMI 1257
Rejection of application of the Liquidator - recoveries of customs duties - invocation of the Bank Guarantee(BG) allowed, during the moratorium period in force under section 14 of IBC - It was held by NCLAT that The appeal is devoid of merit and does not deserve to be admitted at the initial stage itself.
HELD THAT:- The appeal is accordingly dismissed.
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2023 (10) TMI 1256
Initiation of CIRP - NCLT admitted the application - Operational Creditors - serious pre-existing disputes between the Corporate Debtor and the Operational Creditor on account of discrepancies in invoices, and levy of bogus charges and overcharging - operational debt exceeds the threshold limit and is an undisputed debt or not - NCLAT held that There are no illegality in the impugned order of the Adjudicating Authority admitting the Section 9 application.
HELD THAT:- There are no reason to interfere with the order of the National Company Law Appellate Tribunal since no substantial question of law is involved in the appeal.
The appeal is accordingly dismissed.
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2023 (10) TMI 1255
Seeking grant of bail - accused detained without trial - Money Laundering - Criminal Conspiracy - misappropriation of huge funds of Social Welfare Department - siphoning off of the funds from the bank account of Social Welfare Department - HELD THAT:- The record shows that the accused has been in judicial custody as noted in the interim order in connection with the case since 21.04.2018, that is, for 5 years 5 months 26 days. On the other hand, further proceedings in the case has been stayed by order, dated 21.05.2019, which is still in force resulting in non-commencement of trial of the case. The accused has been apparently detained without trial, which cannot indefinitely be allowed to continue without assurance of effective speedy justice to him, who has already undergone one-half of the maximum period of imprisonment specified for the offences. Thus, it appears that the accused has been deprived of the right to liberty and access to speedy justice and trial enshrined under Article 21 of the Constitution of India and right to liberty of bail under Section 436-A Cr.P.C.
It is provided that the accused petitioner namely, Mohet Hojai shall be released on bail of Rs.50,000/- with 02 sureties of like amount to the satisfaction of the learned Special Judge, Assam, Guwahati, subject to the conditions imposed - application allowed.
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2023 (10) TMI 1254
Recovery of service tax alongwith interest and penalty - failure to discharge tax on guarantee commission under reverse charge mechanism - non-declaration of the said guarantee commission in the periodical ST-3 returns filed - period prior to 01.04.2016 - invocation of extended period of limitation - penalties - HELD THAT:- There are no merit in the argument of the appellant, in as much as reading the definition of “ service” and “support service” in juxtaposition, it is clear that the said definition of ‘support service’ is exhaustive and takes in its fold all activities of infrastructural, operational, administrative, logistic, marketing or any other support of any kind comprising functions that entities carry out in ordinary course of operations themselves but may obtain as services by outsourcing from others for any reason whatsoever and shall include advertisement and promotion, construction or works contract etc. - the appellant is liable to discharge service tax on the Guarantee commission paid to Government of Karnataka during the period 01.07.2012 to 31.03.2016 for providing unconditional and irrevocable guarantee in raising funds from the debt market.
Extended period of limitation - HELD THAT:- The extended period of limitation could be invoked only when evidence collected lead to an inference that there has been fraud, collusion, suppression, misdeclaration or contravention of any of the provisions with intent to evade payment of duty. In the present case, the Department has failed to place on record evidence indicating that there has been intention not to discharge service tax on the guarantee commission even though the appellant has been aware of the legal position that service tax is payable on guarantee commission paid to the State government of Karnataka for providing irrevocable guarantee in raising funds from debt market. Moreover, the appellant is a public sector undertaking and in the absence of specific evidence to support that there has been intentional evasion of service tax, extended period cannot be invoked merely on finding the failure on their part to discharge service tax.
The demand is confirmed for the normal period of limitation with interest. Penalties imposed are set aside - Appeal disposed off.
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2023 (10) TMI 1253
Denial of benefit of exemption - determination of the correct classification of goods manufactured by the appellant-1 - Corrugated Boxes and Laminated Paper - It is the claim of the appellant that their goods are more appropriately classifiable under heading 4823 which do not fall within the negative list of the specified goods as per area based exemption notification claimed by them.
HELD THAT:- In the present case under consideration appellants are clearing the laminated paper obtained by fusion of the paper and BOPP in rolls to be used for the wrapping of the photocopy paper. Marks and printings on the paper cleared, make it evident that the paper is used for wrapping of the photocopying paper as it states the name of the of supplier as “Century Pulp and Paper”, name of product as “copier paper”, further there is marking on the wrapper “COPIER MACHINE FRIENDLY”. From these marking and other indications on the laminated paper cleared by the appellant it is quite evident that the product is cleared for wrapping of the photocopying paper.
From perusal of entry at heading 48114900 (reproduced earlier in the quote from impugned order) it is observed that the said entry is preceded by a single dash entry “Gummed or adhesive paper and paper board” and a double dash entry “self adhesive”. All the gummed and adhesive paper and paper board, which are not of self adhesive nature will get classified under this heading. For getting classified under this heading the basic character which needs to be established is that the paper is Gummed or Adhesive paper. It is found that the product in dispute is neither gummed or adhesive paper and hence the classification under this heading gets ruled out.
There are no merits in the said observation as the he has failed to notice that the preceding three dash entry do not specify any such condition and preceding single dash entry is “other” thus the requirement of cut to shape and size as stated in 4823, would be applicable to the goods classifiable in all the headings prior to 4823.90 and not to the entries falling under this heading and subheading in this category.
These goods are correctly classifiable under heading 48239019 the benefit of exemption under Notification will be admissible to the appellant. Thus there are no merits in the demand made by denying the benefit of said exemption notification - Thus demand of duty and interest and the penalties imposed on both the appellants are set aside.
Appeal allowed.
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2023 (10) TMI 1252
Clandestine removal - Principles of natural justice - non-service of SCN - appellant was the manufacturer of any excisable goods in the factory or not - casting/ forging (commonly known as “Dhalai”) of LPG stove valve of brass and bar of brass (Saria) - levy of penalty u/r 26 of CER - HELD THAT:- It is evident that the appellant was not available to receive the hearing notice at the known address of their/ his residence or factory premises. Therefore the service of hearing notices was effected by way of pasting the same at residential and factory premises under proper panchnama. That being so appellant cannot complain about non receipt of show cause notice or the hearing notice. He chose to abstain from the proceedings by not responding to the notices given. For the above reason the principles of natural justice have been sufficiently complied with and the appellant cannot claim any violation of the same.
From the facts as admitted by the appellant and other in their statement recorded under Section 14 of the Central Excise Act, 1944 it is quite evident that factory at Gali No 15 Krishna Vihar Phase 1, Sevadham, Loni Gaziabad, is a factory jointly owned by the Appellant and his younger brother, without entering into any formal partnership. The factory has not been given any name nor has been registered with any of the government departments either centre or state. The entire activities undertaken in the factory were done clandestinely and no formal records were maintained about the operation.
Appellant has not challenged any of the findings recorded by the Commissioner in the impugned order. When the appellant has in his statement recorded under section 14 while giving the details of working of the unit have admitted that he was actively involved in the working of the unit the grounds taken in the appeal which are in nature of alibi do not merit any consideration - His active involvement in the clandestine activities is an admitted fact and penalty imposed on him under Rule 26 is total justified.
There are no merits in this appeal - appeal dismissed.
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2023 (10) TMI 1251
Recovery of credit of duty paid on inputs precluding entitlement to the benefit of notification no. 30/2004-CE dated 9th July 2004 - manufacture of several articles of ‘wool’ and of ‘polyester’ - recovery pertaining to entitlement to notification no. 30/2004-CE dated 9th July 2009 which was sought to be interpreted as intended only for assessees who lacked specified facility which to the appellant could not claim - refusal to entertain application of refund of ₹ 1,19,37,987 remitted as ‘deposit’ for July 2004 to February 2009 during pendency of dispute.
Recovery of credit of duty paid on inputs precluding entitlement to the benefit of notification no. 30/2004-CE dated 9th July 2004 - HELD THAT:- It is not open to the authority empowered under section 11B of Central Excise Act, 1944 to dispose off a claim for refund on grounds of such being premature in any circumstance whatsoever. As the competent authority has not considered the eligibility for refund except at the threshold, it would only be appropriate to restore the claim before the original authority for fresh disposal.
Dis-entitlement of the appellant to benefit of notification no. 30/2004-CE dated 7th July 2004 for non-compliance with the substantive condition of eligibility owing to which demand of ₹ 22,07,315 was confirmed in relation to availment of exemption for the period from September 2008 to February 2009 - HELD THAT:- The remand order of the Tribunal is specific as is the report of the jurisdictional central excise authorities. However, the order of the original authority that was before the first appellate authority to culminate in the impugned order predates the remand ordered by the Tribunal and the defence thereof was not before the original, or first appellate, authority.
Eligibility to benefit of notification no. 30/2004-CE dated 9th July 2004 owing to reversal of credit - HELD THAT:- The factual aspects of eligibility – both by reversal of CENVAT credit as well as existence of facility for manufacture of ‘staple fibre’ in the light of decisions of the Tribunal – have not been examined by the lower authorities.
With the claim for refund restored to the original authority and with these two aspects having to be examined afresh, the issues would have to be go back for re-adjudication. Accordingly, the impugned order is set aside and all the disputes restored to the original authority for a fresh determination.
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2023 (10) TMI 1250
Refund in lieu of transfer to successor credit account - rejection of claim for monetization of accumulated CENVAT credit - HELD THAT:- It is on record that several disputes relating to the retrospective application of the debarring, as well as other connected issues, are pending in writ proceedings before the Hon’ble Supreme Court. Though the decision of the Tribunal in Mylan Laboratories Ltd [2020 (3) TMI 837 - CESTAT HYDERABAD] has rejected the claim for refund of unutilized cess from ineligibility after substitution of the existing tax regime with the new levy, there are several other decisions which have allowed refund of this very cess.
On perusal of the said decisions, viz., that of the Tribunal in Schlumberger Asia Services Ltd [2021 (5) TMI 954 - CESTAT CHANDIGARH] and in re International Seaport Dredging Pvt Ltd [2022 (6) TMI 822 - CESTAT CHENNAI] it is seen to pertain to monetization of the cess - It would appear that the decision of the Tribunal in re Mylan Laboratories Ltd did not have the benefit of judicial determination that prompted subsequent decisions of the Tribunal.
The matter is remanded back to the original authority for re-determination of eligibility in accordance with settled law on refund of accumulated CENVAT credit considering the peculiarities of the facts and circumstances therein.
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2023 (10) TMI 1249
Dishonour of Cheque - insufficient funds - existence of legally enforceable debt or not - Presumption of innocence in favour of accused - acquittal of accused under Sec 255 (1) of Code of Criminal Procedure - HELD THAT:- This Court reminds itself of its scope and powers in deciding an appeal against an order of acquittal. It is well-settled in a host of judicial pronouncements that the Appellate Court should be slow and watchful in interfering with an order of acquittal. It is only when the conclusions arrived at by the Trial Court is manifestly erroneous and palpably perverse, the Appellate Court should take a contrary view. It is more because an order of acquittal has the presumption of innocence in favour of the accused.
In the instant case, the complainant has alleged that the accused had issued Ext P6 cheque in his favour in discharge of a legally enforceable debt. The cheque, on presentation to the bank for encashment, got dishonoured due to ‘insufficient funds’ and despite receipt of the demand notice, the accused failed to pay the cheque amount. Hence, the accused committed the above offence - Indisputably, the complaint has been filed by the complainant ( Mathew K.Cherian represented by his power of attorney holder PW1) in his individual capacity. PW1 has not testified that the accused had any business transaction with the complainant in his individual capacity. Therefore, the learned Magistrate, on an appreciation of the oral testimonies of PW1 and DW1 and the materials on record, came to the legitimate conclusion that Ext P6 cheque was not issued towards a legally enforceable debt in favour of the complainant.
In the case on hand, in addition to the finding that there was no business transaction between the complainant and the accused as alleged in the complaint, there is also no specific assertion as to the competence and knowledge of PW1 as regards the alleged transaction between the complainant and the accused. Thus, the learned Magistrate has rightly concluded that Ext P6 cheque was not issued towards a legally enforceable debt.
On a re-appreciation of the materials on record, this Court is of the definite view that there is no error or illegality in the impugned judgment passed by the learned Magistrate holding the accused not guilty for the offence under Sec.138 of the N.I Act - appeal dismissed.
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2023 (10) TMI 1248
Dishonour of Cheque - existence of legally enforceable debt - benefit of doubt to accused or not - presumption of consideration under Secs.118(a) and 139 of the N.I Act - HELD THAT:- In the case on hand, the complainant’s case is that, Ext.P8 cheque was issued by the accused in discharge of a legally enforceable debt and the cheque got dishonoured when presented for collection and the accused failed to pay the demanded amount, despite receipt of the statutory lawyer notice - The accused denied the allegation and has raised a defence that he has no business transaction with the complainant. Instead, Ext.P8 cheque was issued by him to DW1 to purchase computers. It was misutilising the cheque, the complainant filed the false complaint.
The courts below, after a threadbare analysis of the materials placed on record, have concurrently concluded that the accused had failed to shift the reverse onus of proof cast on his shoulders under Section 139 of the N.I. Act. Accordingly, the courts below found the accused guilty, and convicted and sentenced him for the above offence - There are no error, illegality or irregularity in the conclusion arrived at by the courts below. Thus, the conviction imposed by the courts below is confirmed.
In DAMODAR S. PRABHU VERSUS SAYED BABALAL H. [2010 (5) TMI 380 - SUPREME COURT] the Hon'ble Supreme Court held that unlike other forms of crime, the punishment under Section 138 of the N.I. Act is not a means for seeking retribution, but is a means to ensure payment of money. Complainant's interest lies primarily in recovering the money rather than seeing the drawer getting incarcerated. In an offence under Section 138 of the N.I. Act, the compensatory aspect of the remedy should be given priority over the punitive aspect.
Thus lenient view as regards substantive sentence can be taken, by sentencing the revision petitioner to undergo imprisonment for one day(till the rising of the Court) and pay compensation for the cheque amount, which would do complete justice to both sides - revision petition is dismissed.
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2023 (10) TMI 1247
Dishonour of Cheque - validity of convicting and sentencing the revision petitioner - insufficiency of funds - discharge of onus to prove existence of debt - It is submitted that, prosecution has miserably failed to establish the ingredients of Section 138 of the N.I.Act - HELD THAT:- It is trite that the revisional powers of this Court under Sections 397 to 401 of the Cr.P.C. is to be sparingly exercised and in cases of exceptional rarity. Unless there is manifest error, illegality or an apparent misreading of the records, this Court shall not interfere with the findings of fact rendered by the fact finding courts. Merely because a different view is possible, the revisional Court shall not substitute the views of the Trial/Appellate Courts.
The law has crystallized that once the complainant establishes the concoction of the five ingredients under Section 138 of the N.I.Act, then the reverse onus of proof shifts to the accused to set up a probable defence. If he discharges the onus of proof and casts a doubt about the existence of a debt, then the prosecution has to fail.
Thus, both Courts have failed to advert and discuss the oral testimonies of PW1 and DW1. Instead, the Courts have only discussed about Exts.P1 to P10 documents and concluded that the revision petitioner has not discharged the reverse onus of proof under Section 139 of the N.I. Act - there is no discussion regarding Ext.D1 reply notice, the statement of the revision petitioner u/s 313 of the Cr.P.C. and the testimonies of the defense witnesses and documents.
The courts below have misread the materials on record and have perfunctorily concluded that the revision petitioner has committed the offence u/s 138 of N.I. Act, which is improper, irregular and illegal, and warrants interference by this Court - revision petition is allowed.
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9911796707
