TMI Blog2021 (6) TMI 774X X X X Extracts X X X X X X X X Extracts X X X X ..... that has actually accrued to the Respondent is taxable. What income has really occurred to be decided, not by reference to physical receipt of income, but by the receipt of income in reality. Given the fact that the Respondent had acted only as a broker and could not claim any ownership on the sum and that the receipt of money was only for the purpose of taking demand drafts for the payment of the differential interest payable by Indian Bank and that the Respondent had actually handed over the said money to the Bank itself, we have no hesitation in holding that the Respondent held the said amount in trust to be paid to the public sector units on behalf of the Indian Bank based on prior understanding reached with the bank at the time of sale ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rders dated 22.07.2005 under Section 271 (1) (c ) of the Act holding that the assessee furnished inaccurate particulars of income. 3. Aggrieved over the above orders passed by the Assistant Commissioner of Income Tax, appeals were filed by the assessee in ITA.Nos.369, 370 371/2005-06 before the Commissioner of Income Tax (Appeals). The appeals were allowed on 28.12.2012. Thereafter, the Revenue filed appeals before the Income Tax Appellate Tribunal. In the meanwhile, the Deputy Commissioner of Income Tax, Chennai, also filed a Civil Appeal in C.A.No.4341 of 2018 (arising out of Special Leave Petition (c ) No.22112/2013 before the Hon'ble Supreme Court against the order of this High Court dated 29.10.2012 in Tax Appeal No.368 of 200 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he question of relationship between the Indian Bank and the Respondent, the normal settlement process in Government securities is that during transaction banks make payments and deliver the securities directly to each other. The broker s only function is to bring the buyer and seller together and help them to negotiate the terms for which he earns a commission from both the parties. He does not handle either cash or securities. In this respect, the broker functions like the broker in the inter bank foreign exchange market. The conduct of the Respondent in the transaction in question cannot be termed to be strictly within the normal course of business and the irregularities can be noticed from the manner in which the whole transactions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iminal court can be taken into consideration while deciding the question as to the relationship between the parties to the case. When the findings are arrived by a criminal court on the evidence and the material placed on record then in absence of anything shown to the contrary, there seems to be no reason as to why these duly proved evidence should not be relied upon by the Court. The High Court has specifically appraised the findings given by the CBI Court in this regard. The relationship between the Indian Bank and the Respondent is very much clear by the evidence led during the criminal proceedings. The Executive Director of the Bank has specifically spoken about the role of the Respondent as a broker specifically engaged by the Bank fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the sum of ₹ 14,73,91,000/- and that the receipt of money was only for the purpose of taking demand drafts for the payment of the differential interest payable by Indian Bank and that the Respondent had actually handed over the said money to the Bank itself, we have no hesitation in holding that the Respondent held the said amount in trust to be paid to the public sector units on behalf of the Indian Bank based on prior understanding reached with the bank at the time of sale of securities and, hence, the said sum of ₹ 14,73,91,000/- cannot be termed as the income of the Respondent. In view of the above discussion, the decision rendered by the High Court requires no interference. 8. In view of the observations made by the H ..... X X X X Extracts X X X X X X X X Extracts X X X X
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