2020 (2) TMI 1098

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....ivil Court), which ended in conviction, but, subsequently on an appeal filed by the first respondent before this Court in Crl.A.No.231 of 2000, he was acquitted by this Court, aggrieved against which, the appellant Department has filed an appeal before the Hon'ble Supreme Court, wherein, the judgment of acquittal passed by this Court was confirmed. The Income Tax Officer, vide letter dated 13.01.2016 intimated the first respondent about the refund of tax in the individual case. The first respondent sent a communication dated 28.01.2016 stating that refund has to be given to the second respondent M/s.Silver Shoes Pvt. Ltd., The second appellant rejecting the same, had passed an order dated 30.06.2016 granting refund in the name of the first respondent for a sum of Rs. 17,14,640/-. The first respondent returned the cheque and filed petition under Section 154 of the Income Tax Act against the refund order and the same was rejected by the second appellant vide order dated 07.09.2016 as there is no mistake apparent from the record. Thereafter the first respondent filed a writ petition in W.P.No.35234 of 2016 and the learned Single Judge, passed a detailed order dated 13.07.2017, dir....

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....at subsequent to the search made in the house of the first respondent, the Department has filed criminal case, which ended in conviction, but, on an appeal filed by the first respondent, this Court acquitted him and the case went to Supreme Court, wherein, the acquittal of the first respondent was confirmed. The Hon'ble Supreme Court has accepted that the seized assets from the house of the first respondent belonged to his wife and hence confirmed the acquittal of the first respondent. Once the Supreme Court has held that the seized articles did not belong to the first respondent, the refund order passed by the appellant Department in favour of the first respondent is illegal and against the judgment of the Hon'ble Supreme Court and hence the first respondent filed writ petition. The learned Single Judge after an elaborate discussion on the entire facts of the case, has rightly pointed out that refund order has to be done in favour of the second respondent and not in favour of the first respondent. Further it was rightly held by the learned Single Judge that "interpretation to be given in the facts and circumstances of the present case is by interpreting the words 'from....

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....is favour. It is true that in the criminal proceedings, the Department was not a party, but, at the same time, the Hon'ble Supreme Court has held that the seized assets do not belong to the first respondent and it only belongs to his wife. Under these circumstances, the stand of the Department is not correct that they can pass refund order only in favour of a person, from whose custody, the assets were seized. But, at the same time, the learned Single Judge has not appreciated the factual position and also the finding of the Hon'ble Supreme Court regarding the ownership of the assets. The wife of the respondent herself stated in the affidavit that she earned some monies, when she was staying in America and she also paid income tax at America, and after repatriating to India, she started business and all the seized assets recovered during the search were acquired only out of her business through the three Companies mentioned above. 8 The seized assets were assessed at the hands of the first respondent for the A.Y. 1994-95 vide order dated 29.03.1996. Neither the first respondent nor his wife or the second respondent has challenged the said order so far. Further, neithe....

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....- Viswanathan has collected all the materials from various places and he has given the details of his investigation. He has also supported the recoveries which have been made by the Income-tax Department. He in his statement, has also deposed that some money was deposited at various branches of Punjab National Bank at Bangalore and he has examined all the Senior Managers of Punjab National Bank to show that various amounts were deposited in their Banks and the prosecution has also produced them in the witness box to substantiate their allegation as P.Ws.22, 23, 24, 25, 26 and 32. He has also examined the persons against whose names those amounts were deposited in the witness box. He has also examined the Income-tax Officer as P.W.14, P.W.44 Assistant Director of Income-tax (Investigation) and P.W.51- S. Ganapathy Iyer. By this evidence the prosecution has established that the money was recovered at the house of the accused as well as various purchases of immovable properties made by the wife of the accused. The prosecution has tried to establish that all the moneys which had been recovered from the house of the accused, various deposits in the Punjab National Bank at various places....

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....ouse and she has explained that she has purchased those gold ornaments. She has also submitted that some real estate was purchased out of self-earning as well as the loan from the mother of the son-in-law and some contribution was made by the son-in-law which the son-in-law has also admitted. Likewise, D.W.8 her son-in-law, Thiru S.Rajasankar also appeared in the witness box and admitted that he had also saved certain foreign exchange when he had gone on various visits abroad. He has also admitted to have carried some money to be deposited in the bank. The accused has also come forward in the witness box as D.W.13 and has deposed that all the monies belonged to his wife and when he came to know about the unaccounted money at his house, he gave a piece of his mind to her. He has admitted that on one or two occasions the money was carried by himself to be deposited in the account in Punjab National Bank and some money was also deposited on account of some of the members of the family by D.W.8, S. Rajasankar, the son-in-law. Therefore, under these circumstances, the respondent has explained the possession of unaccounted money." 9 On a careful reading of the above ....