Sec.132 and Chapter 14 B of Income Tax Act - Basing on the receipts one is payment of Rs. 10 lakhs and another is refund of Rs.10 lakhs resulted in failure of a deal - can not be added as unexplained income with out recovering any cash ready in hand -2015 A.P.(2014)MSLLAWREPORTS


The premises of the appellant was searched on 19.01.2001 
by the officials of the Income Tax Department in exercise of power
under Section 132 of the Act.  A receipt evidencing payment of a
sum of Rs.10,00,000/- to one Mr. Prabhakar Reddy is said to have
been discovered.  Another receipt evidencing repayment of that
very amount was also discovered.  A statement under sub-Section 
(4) of Section 132 of the Act is also recorded on the day of search.
When a question was put to the appellant as to whether he has
made any payment to one Mr.Prabhu, he gave answer in a  
negative.
        Thereafter, a further statement was recorded on 27.03.2001.
A question was put to the appellant as to whether he paid a sum of
Rs.10,00,000/- to Mr. Prabhakar Reddy.  The appellant accepted
that he paid that amount to Mr.Prabhakar Reddy on 25.11.2000 
for purchasing of a plot. He further explained that the deal did not
fructify, and as such, the amount of Rs.10,00,000/- was returned
to him on 30.11.2000.  The case of the appellant was that the
amount is from the funds of M/s.Sapta Sikhara Housing Private
Limited (for short the company) in which he himself and his
family members have substantial stake.=
The Assessing Officer passed an order of Block Assessment  
on 31.01.2003 adding a sum of Rs.10,00,000/- to his income and
levying tax as provided for under Chapter 14B of the Act. -
 In the instant case, the plea of the appellant was that the
amount was held by the company and that it was paid to the
owner of the land.  The transaction did not fructify and it was paid
back to the company.  Neither the person, who is said to have
received the amount nor any other individual, were examined to
prove that the payment was by; or, for and on behalf of the
appellant herein.       The plea of the appellant was that the
department did not cross-verify the matter from any authorized
representative of the company.  Therefore, whether one goes by the
factum of the Department itself treating the only documents,
namely, receipts as not true; or their failure to record the
statements of any individual including the authorized
representative of the company, the very basis for the proceedings
ceases to exist.
        The Assessing Officer as well as the Tribunal proceeded on
the assumption that the appellant was under obligation to explain
the factum of payment.  When the amount was not recovered nor 
was said to be in the control and custody of the appellant, there
was no basis for initiating that proceedings.
      We, therefore, allow the appeal and set aside the order of
Block Assessment insofar as it has added a sum of Rs.10,00,000/- 
to the income of the appellant.  There shall be no order as to costs. -2015 A.P.(2014)MSLLAWREPORTS

Popular posts from this blog

Court fee - Sec.34 of A.P.C.F & S.V.Act - partition of Plaints-A and B-Schedule properties, in the manner pleaded by her, and for grant of future profits. Plaint-A Schedule comprised of, four items of immovable properties, and Plaint-B Schedule comprised of, nine items of jewellery. Pleading that the parties are in joint possession of the said properties, the petitioner paid Court-fee of Rs. 200/- under Sub-section (2) of Section 34 of the A.P. Court Fees and Suits Valuation Act, 1956 (for short 'the Act'). The trial Court returned the plaint, through its order dated 23-6-2006, directing the petitioner herein, to pay Court fee on movable properties, on her shares, as per the Act, within the time stipulated by it.= In the instant case, the petitioner asserted that, herself and the respondents are in joint possession of the Plaints-A and B-Schedule properties. In a way, the trial Court was satisfied, that the immovable properties mentioned in Plaint-A schedule are in joint possession, and in that view of the matter, it did not insist on payment of ad-valorem Court-fee, on such items. It, however, took a different view, as regards the movable properties. Neither from the plaint, nor from the endorsement made by the trial Court, it is found that there is any distinction, as to the nature of rights claimed, in respect of Plaint-A Schedule properties, on the one hand, and Plaint-B schedule properties, on the other hand. In fact, the nature and incidence of possession, of an immovable property, gives rise to, relatively greater consequences of law, than the possession of an item of movable property. The possession of an item of immovable property can be said to be more assertive, firm and lasting, than the one, of movable property. The endorsement made by the trial Court cannot be sustained, either on law, or on facts. 2015 A.P.(2006)MSKLAWREPORTS

partition of Plaints-A and B-Schedule properties, in the manner pleaded by her, and for grant of future profits. Plaint-A Schedule comprised of, four items of immovable properties, and Plaint-B Schedule comprised of, nine items of jewellery. Pleading that the parties are in joint possession of the said properties, the petitioner paid Court-fee of Rs. 200/- under Sub-section (2) of Section 34 of the A.P. Court Fees and Suits Valuation Act, 1956 (for short 'the Act'). The trial Court returned the plaint, through its order dated 23-6-2006, directing the petitioner herein, to pay Court fee on movable properties, on her shares, as per the Act, within the time stipulated by it.= In the instant case, the petitioner asserted that, herself and the respondents are in joint possession of the Plaints-A and B-Schedule properties. In a way, the trial Court was satisfied, that the immovable properties mentioned in Plaint-A schedule are in joint possession, and in that view of the matter, it
Read more

Sec.482 Cr.P.C. - Section 8 of the Andhra Pradesh Public Examination (Prevention of Malpractice and Unfair Means) Act, 1997 - Part B question Paper was missed ( said to be distributed to A1 along with other students by A2 an invigilator ) - Charge - she was negligent in performing the invigilation duties. - Their Lordships held that Mere negligence in performing invigilation duties, does not attract the offence set-forth in the Act. Therefore, in absence of any allegation that the petitioner herein has committed the offence set out in Section 5 of the Act, she cannot be subjected to prosecution for which the penalty has been provided under Section 8 of the Act.- Quashed the criminal proceedings - 2015 Telganga & A.P. msklawreports

Law  :- Sec.482 of Cr.P.C. Sub  :- Quash the criminal proceedings Offence  :-Section 8 of the Andhra Pradesh Public Examination (Prevention of Malpractice and Unfair Means) Act, 1997 Summary : -  The investigation revealed that clandestinely question paper Part-B has been removed from the exam hall and it was passed on to Accused No.1 for eventually facilitating in malpractice. However, the police after investigation, filed the charge-sheet.   The petitioner (A-2) along with A-1 is sought to be proceeded against under Section 8 of the Andhra Pradesh Public Examination (Prevention of Malpractice and Unfair Means) Act, 1997 (Act for short).     Section 5 of the Act reads as under: Prevention of leakage by person entrusted with examination works: No person who is entrusted with any work pertaining to a public examination shall, except where he is permitted by virtue of his duties so to do, directly or indirectly divulge or cause to be divulged or make known to any o
Read more

Order 38 Rule 5, only the properties of the defendant can be attached and not the properties in the hands of garnishee has no statutory support nor the support of any precedent.-2015 A.P.(2004) MSKLAWREPORTS

Order 38 Rule 5, only the properties of the defendant can be attached and not the properties in the hands of garnishee has no statutory support nor the support of any precedent. "Order 38, Rule 7 C.P.C. provides that the attachment under Order 38, Rule 5 shall be made in the manner provided for the attachment of property in execution of a decree. It is trite, the attachment envisaged under Order 38, Rule 5 CPC is an attachment before judgment. The restriction found by the learned Single Judge that under Order 38 Rule 5, only the properties of the defendant can be attached and not the properties in the hands of garnishee has no statutory support nor the support of any precedent. The attachment of debts due to the defendant from third party could be attached before judgment under Order 38 Rule 5 CPC.-2015 A.P.(2004) MSKLAWREPORTS
Read more