TMI Blog1997 (4) TMI 26X X X X Extracts X X X X X X X X Extracts X X X X ..... ve accused revealed that the under mentioned demand drafts have been purchased by M. A. Rahim, employee of the accused in favour of one Muthu, employee of Iron and Steel Traders, 77, Sembudoss Street, Madras -600 001. In the course of the sworn statement recorded on August 10, 1984, the accused admitted the purchase of the undermentioned demand drafts towards payment of on money or extra money over and above the invoice price for the purchase of iron and steel materials from Iron and Steel Traders, Madras-1. --------------------------------------------------------------------------------------------------------------------------------------------------- Sl.NO. D.D.NO. Date of Purchased person buying In whose favour purchased Amount from bought --------------------------------------------------------------------------------------------------------------------------------------------------- 1. 906934 19-12-80 5,140 Deena Bank, M.A.Rahim E.Muthu, East Marrate employee of employee, Iron St., Madurai accused and Steel Ms-1. 2. 417795 10-5-78 10,000 Deena Bank, M.A.Rahim E.Muthu, East Marrate employee of employee, Iron St., Madurai accused Steel Traders, Ms-1. --- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has thus committed the offence punishable under section 2 76C(1) of the Income-tax Act, 1961. The accused delivered before the Income-tax Officer, in the income-tax assessment proceedings for the assessment years mentioned above, the false return of income accompanied by false trading and profit and loss account and a false balance- sheet based on the fabricated cash book and ledger, which omitted to record the demand drafts knowing them to be false and thus committed an offence punishable under section 277 of the Income-tax Act, 1961. The learned Additional Chief judicial Magistrate at Madurai framed the charges under section 193 of the Indian Penal Code read with section 196 of the Indian Penal Code, section 420 of the Indian Penal Code. Section 276C(1)(ii) and under section 277(ii) of the Income-tax Act in both the cases and read over them to the accused, who denied the charges and claimed to be tried in both the cases. In proof of the charges framed against the accused the complainant in C. C. No. 54 of 1985 examined P. Ws.-l to 8 and filed the documents marked as exhibits P-1 to P-20. While so the complainant has examined eight witnesses in C. C. No. 53 of 1985, and filed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ence in the invoice price and the actual price was sent by way of demand drafts by the accused in favour of P-W. 5 Muthu, who is the employee of Iron and Steel Traders at Madras and for this purpose Vinod Kumar Didwani opened a savings bank account in the name of P-W. 5 Muthu having Savings Bank Account No. 417 in Dena Bank at Madras. The abovesaid two impugned demand drafts amounts find a place in the savings bank account of P-W. 5 Muthu. According to the prosecution, the-amount covered by these two demand drafts were handed over by P-W. 5, Muthu, to Vinod Kumar Didwani by with drawing the same from Dena Bank at Madras. The accused M. A. Jaffar had not shown these two amounts covered by the two demand drafts taken in the name of P-W. 5 Muthu in the computation of his total income, and the accused has not recorded the said amounts in his books of account and the accused has not included these two amounts in his income-tax return filed by him, thereby, according to the prosecution, the real income and the real income-tax were brought down by these two amounts in the books of account of the accused. It is the further case of the Income-tax Department that by not including these two a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his cross-examination that he had no personal knowledge about the opening of the savings bank account of P-W. 5 Muthu and also his introduction to the bank by his master Vinod Kumar Didwani. Except the witness P-W. 5 Muthu all the other witnesses examined in these two cases are only income-tax officials and bank officials. Learned counsel for the appellant, Mr. K. Ramaswamy, took me through several paragraphs of the complaint and the relevant evidence on record to show that the transactions of these two demand drafts dated May 10, 1978 and December 19, 1980, in the name of P-W. 5 Muthu by one Raheem, who is an employee of the accused M. A. Jaffar, did not find a place in the account books maintained by the accused, and the Income-tax Department made the assessment on the basis of the figures mentioned in the ledger, which did not record the amount covered by these two demand drafts mentioned earlier. According to learned counsel for the appellants, Mr. K. Ramaswamy, thus there was deliberate concealment of income on the volume of transactions purposely to pay a lesser income-tax and a wilful omission was made by the accused to evade a higher amount of income-tax with fabricated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d drafts which is the subject-matter of these two criminal cases in the total income of the respondent/accused. This is not disputed by the appellant's counsel. However, learned counsel for the appellant would contend that the findings of the appellate authority are not binding on this court and this court has to judge the case, independently on the materials placed before the lower court. Before considering this aspect of the order passed by the appellate authority of income-tax at Madurai, it is but necessary for me to refer to two decisions on this point. In K. T. M. S. Mohammed v. Union of India [1992] 197 ITR 196 (SC) at page 200, it was held by the Supreme Court that though the criminal court had to judge the case before it independently on the materials placed before it, there was no legal bar to giving due regard to the proceedings under the Income-tax Act. A similar view was taken by our Madras High Court in the case in Mohammed I. Unjawala v. Asst. CIT [1995] 213 ITR 190 at page 203, wherein it was laid down as follows : "Even though the Supreme Court in P. Jayappan v. S. K. Perumal, First ITO [1984] 149 ITR 696, has made the observation that the result of the proce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssed by the appellate authority, viz., the Deputy Commissioner of Income-tax (Appeals) at Madurai, the charges against the accused in these criminal cases must fall to the ground. Even assuming and without admitting that the order of the Deputy Commissioner of Income-tax (Appeals) at Madurai is to be ignored for some reason or other, and the criminal cases in these two appeals have to be decided independently as urged by learned counsel for the appellant, let us consider the same on the available evidence and materials on record. Now taking up the oral evidence adduced in these two criminal cases it has to be noted that except P-W. 5 Muthu, the evidence of other witnesses cannot be relevant to decide the guilt of the accused. The only evidence that is sought to be advanced to prove the guilt of the accused in these two criminal cases is that of the witness Muthu, who was examined as P-W. 5 in both these cases. His evidence in his chief examination as well as during his cross-examination is similar in these two criminal cases. His evidence as P-W. 5 in C. C. No. 52 of 1983 reads as follows: While it is the evidence of P-W. 5 Muthu at the end of his cross-examination that he wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is not made clear on the side of the complainant that the two amounts covered by two demand drafts have been credited to the account of Vinod Kumar Didwani. However, no lorry receipts or invoices or railway receipts have been produced to show that the transactions between Vinod Kumar Didwani and the accused had taken place in respect of these two demand drafts. In other words, there is no evidence to show that the amounts sent by the two impugned draft amounts related to any particular transaction of the accused. P-W. 5 Muthu has not stated for which transaction of the accused the impugned draft amounts were sent to him. The complainant was not able to point out or specify the transactions in the books of account of the accused correlating the same to these two demand drafts. The evidence adduced in this case and the materials placed on record would not go to show that the amounts covered by the two demand drafts belong to the accused. In other words, there is no satisfactory proof in this case to show that there was nexus between the accused and the amounts sent by way of two demand drafts sent by Raheem to P-W. 5 Muthu, and there is no satisfactory evidence available on record to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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