TaxTMI 
TaxTMI 
1976 (12) TMI 187
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....be invalid by reason only that it is based solely on such presumption. The sub-section consists of two parts. The first part sets out the facts which if proved give rise to a rebuttable presumption. It requires, in order to the raising of this presumption, that the accused must be shown to be in possession of pecuniary resources or property disproportionate to his known sources of income and he should be unable to satisfactorily account for such pecuniary resources or property. If these facts are shown to exist a presumption would be raised by the court trying the offence that the accused was guilty of criminal misconduct in the discharge of his official duty. This presumption would of course be a rebuttable presumption and it would be open to the accused to establish that despite the disproportion of his pecuniary resources or property to his known sources of income, he is not guilty of criminal misconduct in the discharge of his official duty. The burden of displacing the presumption would be on the accused and if he fails to discharge the burden, he would be liable to be convicted for the offence under Sub-section (2). Both the Special Judge as well as the High Court convicted t....
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....ings Certificate received. from father Rs. 2,000.00 ______________ TOTAL Rs. 1,12,515.43 ______________ and we need not, therefore, dwell on the items of income enumerated in these particulars. 4. The appellant, however, sought to add certain other items of income to this list and since these were disputed on behalf of the prosecution, we shall deal with them in seriatim. The first item of income related to profit on sale of gun. The appellant claimed that he had purchased gun No. DEL 1004-49 for. Rs. 600/- and this gun which was held by him under Licence No. 502/1 was sold on 18th on 19th September, 1952 for Rs. 900/- and that resulted in a profit of Rs. 300/- which was liable to be included in determining the total income received by him. The Trial Court did not accept this claim of the appellant on the ground that he had not examined Ram Ratan to whom the gun was sold. Moreover, 30 cartridges had been purchased by him on 7th March, 1953 for a 12-bore gun bearing licence No. 502/1 which showed that he still had his gun No. DBL 1004-49 and he had not sold it on 18th or 19th September, 1952. This conclusion of the Trial Court is patently erroneous since it overlooks the fact tha....
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....o serious cross-examination of Sachhidanand on this point and there is no reason why this statement of his should not be accepted, particularly when it is supported by a debit entry of Rs. 5,700/-under date 25th September, 1948 in the account of the father of the appellant with the State Bank of India, Lucknow Branch Ex. D-126. The entire evidence in regard to payment of the sum of Rs. 5,300/- by the father of the appellant to him (the appellant) in 1948 for purchase of an Austin car is in favour of the appellant and there is absolutely no evidence on the side of the prosecution which would disprove this claim of the appellant The only circumstance on which reliance was placed by the Trial Court for the purpose of disbelieving the evidence led on behalf of the appellant was that the fatter of the appellant was a man of poor means who had about eleven children and he could not possibly have given the sum of Rs. 5,300/- to the appellant But there is absolutely no evidence to show that the father of the appellant was in poor circumstances. It is true that the father of the appellant was an ordinary cleric and after Ms retirement be was earning a small pension, but the evidence of Dr. ....
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.... Agnihotri. Article M and N are the Savings Bank Pass Books. Article M is in the name of my younger brother Ramanand. This is a Minor Account. In 53 Ramanand's age was about 8-9 years. The account of Article N is in the name of my father. My father used to deposit money in Ramanand's account. On 26-6-1956 Rs. 2,000/- was withdrawn in Article M and the entry is at A to A. Rs. 5,000/- were withdrawn from the Pass Book Article N, its entry is at A to A. After withdrawing these amounts I had handed it over to my father. Afterwards my father had given this money to K. Agnihotri in my presence. Article M, which was the Pass Book in respect of the account in the name of Ramanand, showed a withdrawal of Rs. 2,000/- on 26th June, 1956 and so also Article N, which was the Pass Book in respect of the account of the appellant's father, showed a withdrawal of Rs. 5,000/- on the same day. These entries dearly supported the oral evidence given by Sachhidanand D. W. 31. But the story of the appellant does not rest merely on this oral evidence. The same story was put forward by the appellant as far back as October 1960 long before any departmental enquiry was contemplated against the....
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....balance. 8. The result of this discussion is that the total income of the appellant during the period 29th November, 1949 to 1st January, 1962 must be taken to be Rs. 1,12,515.43 plus Rs. 300/- plus Rs. 5,300/- plus Rs. 7,000/- plus Rs. 2,000/- plus Rs. 600/- totalling in the aggregate Rs. 1,27,715.43. 9. We must then go on to consider the expenditure which must have been incurred by the appellant during the period 29th November, 1949 to 1st January, 1962. Here also certain items of expenditure were not disputed on behalf of the appellant and they were as follows: Sl. No. Items Admitted amount of expenditure. 1. Income-tax deductions Rs. 1,560.00 2. Provident Fund deductions Rs. 5,690.00 3. Interest and Bank charge Rs. 729.00 4. Children's Education Rs. 8,252.71 5. Club Expenses Rs. 79.78 6. Maintenance of car Rs. 6,919.00 7. Smoking and drinking Rs. 229.35 _______________ Total: Rs. 23,459.84 _______________ But there was serious controversy between the parties in regard to certain other items and we shall have to deal with them. 10. The first item of expenditure relates to insurance premia paid by the appellant. The case of the appellant was that he had paid insur....
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....June, 1953 to 31st July, 1957 when he was at Satna, the house rent was paid by his maternal aunt who was staying with him and, therefore, an aggregate sum of Rs. 2,500/- being the house rent for the period of Satna stay should be deducted in computing his expenditure on this account. There is great force in this submission of the appellant. There is, apart from the statement of the appellant himself on oath, the evidence of Vishnu Narain D. W. 32 who was Mukhtiar Aam of the aunt, which clearly shows that the aunt was living with the appellant during the period when he was at Satna and she was meeting the household expenses of the appellant. The High Court also accepted this claim of the appellant and it must, therefore, follow that the sum of Rs. 2,500/- representing the house rent of the appellant during his stay in Satna was expended by the aunt and it must be deducted from the sum of Rs. 8,660/- claimed by the prosecution to have been spent by the appellant on account of house rent. On this view a sum of Rs. 6,160/- only would be deductible as expenditure incurred by the appellant on account of house rent. Similarly in regard to electricity charges also, the amount spent at Satn....
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....f cars. The claim of the prosecution was that the appellant purchased an Austin car in 1948 for Rs. 5,300/- and sold it in 1954 for Rs. 2,500/-, thus incurring a loss of Rs. 2,800/- and thereafter he purchased a Rat car for Rs. 9,200/- in 1956 and sold it in 1959 for Rs. 8650/- at a loss of Rs. 550/- and thus he incurred a total loss of Rs. 3,350/- in the sales of these two cars which was liable to be deducted from his total income for determining the proportion of income with the assets. Now it was common ground that the appellant did suffer a loss of Rs. 2,800/- in the sale of the Austin car and a loss of Rs. 550/- in the sale of the Fiat car. The appellant got a sum of Rs. 5,300/- from his father for the purchase of the Austin car and when the Austin car was sold for Rs. 2,500/- he invested the sum of Rs. 2,500/- along with a further sum of Rs. 7,000/- received by him from his father in the purchase of the Fiat can and the sum of Rs. 8,650/- representing the sale proceeds of the Fiat car together with a further sum of Rs. 5,500/- received by him from his father by means of draft Ex. P. 1120 was invested by him in the purchase of an Ambassador car in August 1960 and this Ambassad....
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....t in the absence of any positive evidence on the side of the prosecution -which would disprove the claim of the appellant, we do not see any reason to disbelieve the evidence of the appellant on this point. Moreover, if this explanation were not to be accepted, we fail to see any other reason why such small amounts should have been paid by the appellant to Sheela Devi by cheques out of his banking account We may, therefore safely accept the explanation offered by the appellant and exclude the sum of Rs. 486/- from the expenditure of the appellant under this head. The next item of Rs. 500/- represented monies paid by the appellant to his father Babu Ram. The explanation of the appellant was that this amount represented the sale proceeds of Zamin-dari Abolition Bonds of his father sold by him, but this explanation does not appear to be genuine, because if Zamindari Abolition Bonds of his father were sold by the appellant, the sale proceeds should have gone into his bank account, but no credit entry in regard to this amount could be pointed out on behalf of the appellant and the sum of Rs. 500/- must, therefore, be treated as expenditure incurred by the appellant. The item of Rs. 180/....
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....is difficult to believe that the appellant should have withdrawn a sum of Rs. 900/- from his bank account for household expenses when the household expenses did not exceed Rs. 163/- per month. We would, therefore, reject the contention of the appellant with regard to the sum of Rs. 900/- and add that as part of his expenditure. The result is that under the head "Miscellaneous payments through Cheques" an aggregate sum of Rs. 4,572/- must be treated as expenditure incurred by the appellant. 16. Then we come to two other items. of expenditure, namely, Rs. 856/- on holiday trips and Rs. 550/- on family illness. These two items of expenses could not be disputed on behalf of the appellant and the learned Counsel appearing on behalf of the appellant fairly conceded that they may be added in computing the total amount of expenditure incurred by the appellant. 17. The next item of expenditure related to expenses on kitchen, servants, milk etc. and under this head, the prosecution claimed that an aggregate sum of Rs. 20,000/- must be taken to have been spent by the appellant Though the High Court upheld this claim of the prosecution, we do not think it can be accepted in its entirety.....
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....ge expenses was found from the residence of the appellant when a search of his premises was carried out in 1962. But that by itself cannot possibly lead to an inference that the expenditure shown in the account must have been incurred by the appellant. The appellant stated in his evidence that he did not incur any expenditure on account of the marriage of his sister and that the entire expenditure was incurred by his father and the father also in his statement Ex. D-104 stated that the expenditure in connection with the marriage of his daughter was incurred by him. Moreover, it stands to reason that the expenses in connection with the marriage of a girl in a Hindu family would be incurred by the father and not by the brother. The High Court was, therefore right in coming to the conclusion that the expenses in connection with the marriage of the sister of the appellant were incurred by his father and no part of the expenditure was incurred by him. 20. The net result of the above discussion is that the total expenditure incurred by the appellant during the relevant period must be taken to be an aggregate sum of Rs. 83.331.84 as per the following particulars: Sl. No. Items Amoun....
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....stated in his evidence that on 21st May, 1958 Shanti Devi disposed of some gold Bangles and silver ornaments which she used to put on whilst she was a widow and she obtained a sum of Rs. 1,051.10 as as sale proceeds of these ornaments out of which she deposited a sum of Rs. 1,000/- in this joint account. This story of the appellant did not rest merely on his oral testimony but it was also supported by the sale voucher Ex. D-91 as also the oral evidence of Shambhu Prasad D. W. 33, an employee of M/s. Kanhyalal Damodardas of Benaras to whom the ornaments were sold. Vishwanath Avasthi D. W. 16 who was a cousin of the first husband of Shanti Devi also identified the signature of his father Ramadhin Avasthi on the sale voucher Ex. D-91. This evidence is clearly sufficient to establish that the sum of Rs. 1,000/- deposited in the joint account of the appellant and Shanti Devi belonged to Shanti Devi and not to the appellant, particularly when there is no evidence at all on the side of the prosecution to show that this amount really belonged to the appellant. 23. We then proceed to consider the second item of assets consisting of a sum of Rs. 2,000/- in the GPO Savings Account at Indor....
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....t, what happened was - and that is clear from the evidence of Vishwanath Avasthi D. W. 16, Narain Sevak Tiwari D. W. 17, Vikram Dutt Tripathi D. W. 19, Rama Kant Tripathi D. W. 21 and Ramadhar Avasthi D. W. 22-that an aggregate sum of Rs. 9,000/- collected from these various persons was given to Shanti Devi as a dowry at the time of her re-marriage with the appellant. The High Court also accepted this case of the appellant and observed in its judgment that: "There is evidence to show that at the time of the marriage he was required to raise money from his relations." It is, therefore, clear that there was, no cash amount of Rs. 9,000/- with Shanti Devi which could be said to form part of the assets of the appellant and on the contrary there was a sum of Rs. 9,000/- received by Shanti Devi at the time of her re-marriage with the appellant which accounted for some of the assets standing in her name. 25. The next item of assets to which we must refer is the land at Varanasi which was purchased for Rs. 2,500/- in 1956. The sale deed of this land was in the name of Shanti Devi and hence it must be presumed, unless the contrary is shown by the prosecution, that the land belonged to Sh....
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....ed to Rs. 11,180/- as on 1st January, 1962. This case of the appellant was supported by the evidence of Ramadhar Avasthi D. W. 22 and Ramadhin Avasthi D. W. 90. Vishwanath Avathi D. W. 16 also corroborated the testimony of these two witnesses on the point. It is difficult to see how in the face of this overwhelming evidence it could be concluded that the sum of Rs. 11,180/- lying in fixed deposit in Shanti Devi's name was an asset belonging to the appellant. It must be remembered that the fixed deposit stood in the name of Shanti Devi and the burden, therefore, lay on the prosecution to show that Shanti Devi was a benaminar of the appellant. It is well settled that the burden of showing that a particular transaction is benami and the appellant owner is not the real owner always rests on the person asserting it to be so and this burben has to be strictly discharged by adducing legal evidence of a definite character which would either directly prove the fact of benami or establish circumstances unerringly and reasonably raising an inference of that fact. The essence of benami Is the intention of the parties and not unoften, such intention is shrouded in a thick veil which cannot ....
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.... Devi from her father at the time of her marriage she deposited a sum of Rs. 10,000/- with one Adiya Dutt Thakur in 1946 and this amount was returned to her by Adiya Dutt Thakur in 1958 by means of a cheque and this very cheque was deposited by her with Sharda & Co. and hence this amount belonged to her and not to the appellant. This case of the appellant was amply supported by the statement D-105 given by Adiya Dutt Thakur before the Income-tax Officer on 30th March, 1960 where he clearly stated that Sheela Devi gave him Rs. 10,000/- in June 1946 for safe custody and this amount was returned by him to Sheela Devi in April 1958 by means of a cheque drawn by his son on his bank account with the Central Bank of India, Allahabad Branch. This statement of Adiya Dutt Thakur was corroborated by the evidence of his son Gaya Dutt Thakur D. W. 29. B. P. Khare P.W. 10, a partner of Sharda & Co. also in his evidence supported this story of the appellant. We must, therefore, hold that the deposit of Rs. 10,000/- with Sharda & Co. belonged to Sheela Devi and not to the appellant. That is the reason why the High Court rightly gave credit for Rs. 10,000/- while including the assets standing in th....
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....this amount was deposited by Sheela Devi with M/s. Shridhar Gopal & Co. by taking a loan from the appellant and the appellant in his turn had borrowed an identical amount by taking an overdraft from the Allahabad Bank, Akola and, therefore, if the sum of Rs. 14,000/- with M/s. Shridhar Gopal & Co. was considered as his asset, the liability of Rs. 14,000/- in the overdraft account with the Allahabad Bank. Akola should be set off against this asset and hence nothing should be added to his assets in respect of the deposit with M/s. Shridhar Gopal & Co. But when it was pointed out to the appellant in the course of the arguments that the overdraft of Rs. 14,000/- was taken by him from the Allahabad Bank, Akola against his fixed deposit receipt of Rs. 15,767.93 and the amount of this fixed deposit receipt together with interest aggregating to Rs. 16,065.68 was credited in the overdraft account on 4th June, 1959 as a result of which the debit balance in the overdraft account was converted into a credit balance and there was accordingly no liability in the overdraft account on 1st January, 1962 which could be set-off against the deposit of Rs. 14,000/-with M/s. Shridhar Gopal & Co., the ap....