GST Helpdesk   Subscription   Demo   New User   Login      
Tax Management India .com
TMI - Tax Management India. Com
Extracts
Home List
← Previous Next →

2016 (5) TMI 861 - DELHI HIGH COURT

2016 (5) TMI 861 - DELHI HIGH COURT - TMI - Release of a sum seized while transporting cash from the customers of HDFC Bank - entire cash amount seized was attributed to the income of Mr. R.K. Seth - Held that:- There was failure on the part of the Department to discharge its basic responsibility of tracing the source of the cash. The Department was aware that Mr. Seth, one of the employees of SIPL had not accompanied the armoured vehicle. He reached the police station subsequent to the seizure .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ndhi Nagar branch of HDFC. The entire service was being performed under a valid agreement. The HDFC also issued a confirmation letter. Despite this the Department made no enquiries with the HDFC Bank. Inexplicably the Investigation wing of the Department abdicated its basic responsibility and simply passed the buck to the AO. Mr R K Seth was only an employee of SIPL. He was not carrying the cash as was wrongly presumed by the AO. His statements offered a plausible explanation which could easily .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

, in refusing to release the cash seized from the armoured vehicle to the Petitioner, to be invalid and illegal.

The Department is directed to return to SIPL the entire seized amount of ₹ 60,48,748 together with interest @ 12% per annum from the date of seizure of the cash i.e., 9th January 2012 till the date of return which in any event shall take place not later than two weeks from today. The Department will also pay SIPL ₹ 1 lakh as costs within the same period. - Decid .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

hereinafter referred to as the Department ) [Respondent Nos. 2 to 6] seeking various reliefs including the release of a sum of ₹ 60,48,672 which was seized while transporting cash from the customers of HDFC Bank [Respondent No. 7] to its Gandhi Nagar Branch at Ghaziabad. Background facts 2. The background to the petition is that the Petitioner-SIPL is engaged in the business of transporting cash on behalf of the banks in its armoured vehicles including cash collections from customers of th .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

cope of license granted by the Reserve Bank of India ( RBI ) to HDFC Bank. It is asserted that the Petitioner was performing the services of collection and transportation of cash under the direct authorization and on behalf of the HDFC Bank in terms of the agreement with HDFC Bank. A copy of the said agreement dated 23rd August 2014 has been placed on record. 3. The agreement spells out the obligations of the Petitioner. The Petitioner is obliged thereunder to have sufficient security practices, .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

r damages. 4. There are also clauses regarding confidentiality or authority of the information that may be provided to SIPL for the purpose of discharging its contractual obligations. Schedule-I to the Agreement sets out the scope of the services. The obligation of SIPL is to pick up, collect, obtain, currency notes from the bank s customers/clients and any other related documents etc. and deposit the same with the bank. The other obligations as spelt out in Schedule I include to deliver, hand o .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

t, be responsible for cash, currency notes from the bank from time to time ; to furnish, generate prepare such reports containing such details as may be specified by the bank from time to time; and any other services incidental or related to the aforesaid services. 5. Schedule II to the Agreement sets out the Modalities and procedures to be followed by the company which form part of this agreement. This included the instructions issued by HDFC Bank at the central processing units for the cash pi .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

tailed instructions about the cash deposit challan which is to be in quadruplicate and with a unique serial number printed on all the four copies. All the copies are to be signed by the customer/depositor as well as employee of the cash agency. The first copy would be issued to the customer at the time of pick up by the agency, the second, third and fourth copies are submitted to the teller at the bank along with the cash collected from the customers. All the three copies are to be signed by the .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

are so accepted by the Bank. Such acceptance by the bank shall be at the sole discretion of the Bank. 7. Clauses 23 to 25 of the Schedule II which are relevant for the present case, read as under: 23. The cash will be carried in sealed envelopes or canvas bags with tamper proof seal or steel trunks duly locked (steal trunks in case the cash collected is huge and bulk). The cash deposit challan will also be sealed with the cash to prevent any chance of tampering or alterations. 24. All moneys pi .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

greement sets out the consideration to be paid for the services rendered. SIPL also simultaneously furnished an Indemnity Bond in favour of HDFC Bank agreeing to make good the loss or damages caused to the Bank. An Addendum to the Agreement sets out the precise guidelines for cash pick-up and delivery services. 9. On 9th January 2012, a date when the polling in the elections to the Uttar Pradesh Legislative Assembly was in progress, one of the armoured vehicles of SIPL bearing No. DL-1LK 7917 wa .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

has also furnished the names of the following persons accompanying its aforementioned armoured vehicle: (1) Sushil Kumar s/o Ram Niwas Mishra, SID No. 1152, Cash in Transit Custodian; (2) Praveen Kumar s/o Ram Niwas Singh, SID No. 1685, Cash in Transit Custodian; (3) Pawan Kumar s/o Vijay Pal Singh, SID No. 1681, Driver (4) Ratan Singh s/o Dafe Darr Singh, SID NO. 1214, Gunman (5) Jain Prakash s/o Kalicharan, SID No. 1184, Gunman 10. There are also certain supporting documents produced to show .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

sonnel that the vehicle was on duty for HDFC Bank. They were also apprised that the pay slips, vouchers and instructions were inside the sealed bags for safety and placed in the sealed containers. SIPL states that the police authorities then took the vehicle and sealed cash containers into custody and the vehicle was then taken to the police station, Link Road, Sahibabad. 12. Mr. R.K. Seth, Deputy Branch Manager of SIPL then reached the police station in response to a call from the Flying Squad .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

address of the private parties whose cash that has been transporting , Mr. Seth suggested some of the parties names, i.e., ITC (P) Limited, Mahindra M.G., Bharti Retail, M.S. Sport Limited, Trent Ltd. etc. When asked do you have any evidence of parties, whose cash you are carrying is disclosed or accounted as per provisions of Income Tax Act, 1961 , Mr. Seth is supposed to have replied No Sir, I have no evidence for this cash. When asked apart from above, you have to say anything Mr. Seth replie .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

FC, ICICI, KBL and other banks for loading their ATMs at various places. SIPL also collected the money from their customers and deposited it as per the direction of the concerned bank. Mr Yadav states that Mr. Seth had no documentary evidence which could justify that the said cash was actually accounted for and disclosed for income tax purposes at that moment. 15. The affidavit of Mr. Yadav also acknowledges that subsequent to the above statement, SIPL did produce a copy of the agreement entered .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ese were wrongly filled up with numerous discrepancies as have been recorded in the statement. 16. The above statements of Mr Yadav do not appear to be correct. It transpires that Mr. Seth had not accompanied the armoured vehicle at all. The names of the persons who accompanied the armoured vehicle have already been noticed hereinbefore. Therefore, it is not correct to state that Mr. Seth was carrying the cash. Secondly, it transpires that Mr. Seth had reached the police station subsequent to th .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

which require to be noticed. The first is that they are sequentially numbered as 479801 to 479810 and 479501 to 479507. The challans dated 9th January 2012 contain the names of the customers, the amount of cash collected and the account no. of the customer with the HDFC Bank. They also contain columns which show the number of currency notes and denominations and which tallies with the total amount mentioned in each challan. The Court notes that there was sufficient information available in the c .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

erred made enquiries with the HDFC Bank or with the customers whose names were found in the slips, the answer was in the negative. Further events 19. To continue the narration of what transpired thereafter, after the statement of Mr. Seth was recorded on 9th January 2012, the seized containers were opened on 10th January 2012 in the premises of State Bank of India ( SBI ) at Navyug Market, Ghaziabad. According to SIPL, despite the sealed containers disclosing the aforementioned details the polic .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ease of the money. SIPL offered to furnish voluminous documentary evidence in support of its prayer. SIPL states that thereafter it "ran from pillar to post seeking the return of the said money but did not succeed. A further application was filed on 1st October 2013 which again did not result in any response from the Department. 21. On 15th October 2013 the Central Board of Direct Taxes ( CBDT ) informed SIPL that it should make an application before the AO of Mr. Seth under Section 132A of .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ested to please contact your Assessing Officer for any further action in this regard. 22. By another letter dated 28th October 2013 the DCIT, Circle-8(1), New Delhi informed SIPL that since search and seizure action was conducted on the employee of SIPL, i.e., Mr. R.K. Seth, R/o X-41, Sector-12, Noida on 9th January 2012 the matter had been referred back to the DCIT (Inv)-II, Ghaziabad. 23. SIPL then addressed a representation to the CBDT on 30th October 2013 again requesting for release of the .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

income of Mr. R.K. Seth and his complete taxable income assessed at ₹ 67,80,860. The AO ordered interest under Section 234A, 234B and 234C of the Act and also issued penalty proceedings under Section 271(1) (c) of the Act. 26. In the said assessment order, the after setting out the statement made by Mr. Seth and the terms of the agreement entered into before HDFC Bank and SIPL, in para 13 the AO noticed that on 17th February 2014 Mr. Seth has filed the photocopies of the cash deposit slips .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

appears not to be correct since the file produced by the Department before this Court today contains the cash slips recovered from the containers in the armoured vehicle which was seized on 9th January 2012. As already noticed, the file contains photocopies of the slips/10 challans dated 9th January 2012. They contained the names of the following parties with the money (in cash) collected from each of them: M/s. ITC Ltd. ₹ 4,434 Mahindra Retail Pvt. Ltd. ₹ 35,619 Bharti Retail Pvt. .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

cash was being transported pursuant to the agreement between SIPL and HDFC Bank. This was confirmed in a letter issued by HDFC Bank on 10th January 2012 setting out the names and account numbers of all the customers from whom the collection was made. A copy of this letter was furnished to the Department. Yet no verification was undertaken of the said particulars. The assessment order reveals that enquiries were made with only three parties viz., M/s Mahindra Retail Pvt Ltd, Website- unit of Tre .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

e the search results in recovery of money in the territorial area of an assembly or Parliamentary constituency in which an election is going on. In the first place, it requires to be noticed that Rule 112 F was inserted by the Income Tax (14th Amendment) Rules, 2012 with retrospective effect from 1st July 2012. Therefore, it was not in operation when the search in the present case took place, i.e., 9th January 2012. Secondly, Rule 112 F states that when the seizure takes place of any money, bull .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ry to determine whether the cash or other valuable articles seized from a person in fact belongs to such person. 30. To be fair Mr. Rahul Chaudhary himself did not contest the position that the legal requirement of the AO having to make an enquiry was not dispensed with by Rule 112 F. Invalidity of the Department's actions 31. The case on hand raises serious issues since this is neither the first nor the last instance of cash being collected and transported to banks under a valid agreement b .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

of the cash. The Department was aware that Mr. Seth, one of the employees of SIPL had not accompanied the armoured vehicle. He reached the police station subsequent to the seizure and that too upon the insistence of the JDIT that someone from SIPL should be present before the JDIT to make a statement. In the circumstances, there was no occasion for the Department to assume that Mr. Seth himself was carrying the cash. 33. To compound the above error, the Department refused to admit to the mistake .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

 

 

 

 

 



|| Home || Acts and Rules || Notifications || Circulars || Schedules || Tariff || Forms || Case Laws || Manuals ||

|| About us || Contact us || Disclaimer || Terms of Use || Privacy Policy || TMI Database || Members || Site Map ||

© Taxmanagementindia.com [A unit of MS Knowledge Processing Pvt. Ltd.] All rights reserved.

Go to Mobile Version