TaxTMI 
TaxTMI 
2023 (11) TMI 881
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....the offence under Section 13(2) r/w 13(1)(e) of Prevention of Corruption Act, 1988. The properties were acquired in his name, his wife name and in the name of his minor children mentioning his wife as guardian, therefore his wife (A2) was tried for aiding him to commit the offence. 2. The charge against them as framed by the trial Court reads as below:- 1. A.M.Paramasivam, and 2. P.Nallammal, W/o.A.M.Paramasivam. Firstly, A1 was a Member of Tamil Nadu Legislative Assembly from 16.06.91 to 09.05.96 and during that period you were a Minister for Labour in Government of Tamil Nadu from 17.05.93 to 09.05.96 and during the above period at Chennai and other places that you Al a public servant had acquired and was in possession of properties and pecuniary resources which were disproportionate to your known sources of income to the extent of Rs. 38,72,545/- for which you have not satisfactorily accounted and thereby that you Al committed an offence punishable under section 13 (2) r/w.13(1) (e) of Prevention of Corruption Act, 1988 and within the cognizance of this court. Secondly A2 wife of A1, during the above said period abetted A.1 in the commission of the ....
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....at Rs. 1000/- cash in hand and 100 sovereigns of gold jewels which were given as Sridhana during his marriage with A-2 in the year 1983. 10. At the end of the check period i.e., 09/05/1996, the value of the properties in possession of A-1 was assessed as Rs. 39,78,986/- which includes the immoveable properties purchased in the name of their minor children and his wife A-2. The second accused, who had no independent income of worth mentioning had aided A-1 to acquire these wealth in her name and in the name of her children as their representative and natural guardian (Statement II). During the check period the income of the public servant and his family members from known source was assessed as Rs. 7,09,330/- (Statement III). During that period the probable expenses for him and his family consisting of 4 members was assessed as Rs. 6,03,889/- (Statement IV). His likely saving from the income through known source after defraying expenses assessed as Rs. 1,05,441/-. Thus, he had properties worth Rs. 38,72,545/- disproportionate to the known source of income which is about 546 %. 11. After examination of witnesses and on appreciating the evidence relied on by either side, the Tri....
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....deducting Rs. 1000/- cash in hand at the beginning of the check period was only Rs. 2,45,454/- (Rs.7,96,738/- (-) Rs. 5,51,284/-), the value of assets acquired during the check period is Rs. 37,71,590/-. Thus, the public servant has amassed wealth of 442% disproportionate to the known source of income. Hence the trial Court held A-1 guilty for the offence under section 13(1)(e) of Prevention of Corruption Act and A-2 being his wife for aiding A-1 to commit the said offence by lending her name to acquire properties in her name and in the name of her minor children held her guilty of offence punishable under Section 109 I.P.C r/w Section 13(2) r/w 13(1)(e) of P.C. Act. 13. Aggrieved by the findings of the trial Court, the present appeal is filed on the ground that, the prosecution suffers malafide and perversity on the face of the record. A-1 had income from agricultural land owned by him as well as taken on lease and under his cultivation. He was getting pension as he was an M.L.A during the period 1977-1980. A-2 had her own independent income through agricultural land and money lending. Their income had been disclosed to the Income Tax Department under Ex.D-2 and Ex.D-3. Though ....
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.... DV&AC, Chennai, the case was investigated by P.W-62 Mr.Rathinakumar, Inspector of Police, DV&AC Dindugul. During the course of investigation search of A-1 residences at Madurai, Nelliyenthapatti was conducted. Incriminating documents were found and seized. The value of the house constructed during the check period was assessed through P.W-59 and in his report Ex.P.144, he had opined that, the property is worth about Rs. 20 lakhs. On completion of investigation, draft Statements-I to VI was prepared and sent to A-1 calling upon his explanation. To the Final opportunity Notice (FoN) Ex.P.159 dated 28/05/1997, the accused sent his reply marked as Ex.P- 160 seeking extension of time but did not gave any plausible explanation for holding the properties referred in Statement-II. 17. Ex.D-1, the statement of income tax return filed under block assessment for five years and Ex.D-2 and Ex.D-3, the statement of account showing A-1 and A-2 had cash balance of Rs. 3,59,954/- and Rs. 2,43,000/- are self serving documents which were not produced during the investigation when explanation sought under Ex.P-159. The Income Tax Returns and adjudication of the Commissioner and ITAT have no releva....
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....of the properties acquired by A-1 and his family during the check period and the income from lawful source as spoken by the staff of Legislative Assembly from whom the public servant received salary and other perquisites, the payment receipts from the Sugar mill for the supply of sugarcane by A-1 and A-2, submitted that the trial Court had properly appreciated the evidence and arrived at just conclusion. Hence, the trial Court judgement need to be confirmed. 21. Heard the Learned Counsel for the appellant and the Learned Additional Public Prosecutor for the respondent/State. Records perused. 22. The main contention of the appellants is that the assets held by them at the beginning of the check period were not properly considered. Statement-I is the list containing assets held by the public servant and his family members at the beginning of the check period. The income derived from the agricultural income not been taken into account. If the prosecution properly taken the agricultural income, then the accusation of amassing wealth illegally would have been disproved. 23. The appellants claim that, Ex.D-1, Ex.D-2, Ex D-3, Ex.D-16 and Ex.D-17 are proof to show that, they have ....
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....eby the High Court has accorded unassailable primacy to such income tax returns/orders and have made those final and binding on the criminal court without any appreciation of the probative potential thereof."(Emphasis added). 25. In the light of the said dictum, the question under consideration as to whether the Public Servant was in possession of assets disproportionate to his known source of income has to be examined. 26. The additional documents Ex.D-16 and Ex.D-17 are in respect of decision by the Income Tax Department. Whether the agricultural income of A-1 (HUF) for the years 1992-93, 1993-94 and 1996-1997 mentioned in the returns filed were inflated for the purpose of exemption from tax as income from agricultural income or not was the question before the Commissioner and the Tribunal. While the Assessing Officer ordered that the declared income from agricultural for the relevant assessing years as Rs. 2,39,250, Rs. 2,40,000/- and Rs. 2,49,500/- is highly inflated and from the opinion of the officials from Agricultural Department, the probable income from sale of paddy and other agricultural products will be only Rs. 1,44,813/-, Rs. 1,27,800/- and Rs. 1,17,041/- respec....
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....d, though it is contended by the appellants that, they had other sources which they declared in their Income Tax Returns. To substantiate this fact, they rely upon the testimony of P.W-29, M.V.Veeranan, the father of A-2 and few others, who are all his own relatives. P.W-29 had deposed that, he and his wife were having taxable Agricultural Income even during the year 1973-1974 and received notice from the Department. He is blessed with 8 children (4 sons and 4 daughters). At the time of his daughter Nallammal (A-2) marriage, he gave 100 sovereigns jewels as Shridana, 1.18 acre wet land, 1.35 acres dry land with 50 coconut trees and 15 mango trees and cash of Rs 10,000/- was given to her during marriage. It is to be noted that, there was no title documents produced to prove the ownership. The marriage between A1 & A2 took place in the year 1983, whereas the check period commenced from 16/06/1991. There is no document placed before the Court to indicate that, after marriage till soon before the check period A-1 and A-2 had any source of income other than 5 acres of land shown in the Statement-I or purchased any property. They both had thought fit to file Income Tax Returns only in th....
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....;s Office, Thamaraipatti. (Rs.16,875/- + Stamp duty Rs. 2030/-) 18,905/- 6. 0.09 acres of dry land is S.No.231/13 at Kodikulam during 1992 purchased in the name of Tmt.Nallammal Sale deed Doc.No.4103 of 1992 dated 14.09.1992 of District Registrar's Office, Madurai. (Rs.4,500/- + Stamp Duty Rs. 540/-) 5,040/- 7. 1.45 Acres of wet land in S.No. 253/3 & 296/1 at Kodikulam during 1993 purchased in the name of T.R.Selvakumar Pandian, minor S/o. Tr.A.M.Paramasivam Sale Deed Doc. No.744/93 dt. 15.4.93 of Sub Registrar's office, Thamaraipatty. (Rs.64,980/- + Stamp Duty Rs. 7,860) 72,840/- 8. One ready built house at K.K. Nagar, Madurai and 0.01 acre of land in S.No.514/1, at Kulathoor village, Kerala state during 1993 purchased in the name if Tmt. Nallammal Sale Deed Doc. No. 3359/93 dt: 22.09.93 of S.R.o Kulathoor, Kerala State. (Rs.1,50,500/- + Stamp duty Rs. 9050/-) 1,59,550/- 9. 2.48 Acres of wet land in S.No.256/2 & 261/2 at Kodikulam during 1994 purchased in the name of Tr.Rajkumar Pandian, minor son of Tr.A.M.Paramasivan Sale Deed Doc. No. 608/94 dt. 04.04.94 of S.R.O. Thamaraipatty. (Rs.80,600/- + Stamp Duty Rs. 9,680/-) 90,280/- 10....
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..... Sofa set 3 acquired Tr.A.M.Paramasivam during 1995. 7,000/- 24. One Hero Honda 2000 watts Generator acquired by Tr.A.M.Paramasivam during 1995. 21,200/- 25. One Dish Antenna acquired by Tr.A.M.Paramasivam during 1995. 12,000/- 26. One Office table with six chairs acquired by Tr.A.M.Paramasivam during 1995. 11,800/- 27. One during table with 7 chairs acquired by Tr.A.M.Paramasivam during 1995. 11,000/- 28. Teak wood single and double cost each 2 in Nos. acquired by Tr.A.M. Paramasivam during 1995. 20,000/- 29. 10 sovereigns of gold (old) jewels purchased by Tmt.Nallammal during 1991. 28,000 30. 25 soverings of gold (old) jewels purchased by Tmt. Nallammal during 1992. 75,000 31. 15 sovereigns of gold (old) jewels purchased by Tmt. Nallammal during 1993. 45,000 32. Share certificates of National Co-op. Sugar Mills Alanganallur held by Tr.A.M. Paramasivan and Tmt. Nallammal during 1992, 95 & 96. 7,400/- 33. Cash balance as on 09.05.1996 as per S.B. A/c.3043A of Tr.A.M. Paramasivan in Madurai District Certral Co-op Bank Ltd. Madurai. 8,910/- 34. Cash Balance as on 09.05.1996 as per S....
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....W-30 is a freelance valuer. On the request of A-1, he has inspected the house and given his valuation certificate. His valuation report Ex.D-15 is half the value shown by the P.W.D Valuer Mr.Muthukumarasamy (P.W.59). The proceedings during the inspection of the house and the valuation report given by P.W-59 are marked as Ex.P-143 and Ex.P-144. The photographs of the house are marked as M.O.1 to M.O.31. 38. The Trial Court in its judgment at paragraph Nos.83 to 85 had discussed the evidence regarding the value of the house relied by the prosecution and the defence. On comparing the valuation report of P.W-59 marked as Ex.P-144 and the valuation report of D.W-30 marked as Ex.D-15, the main difference pointed out by the trial Court is the build up area. The defence witness Mr.Rajasekaran examined as D.W-30 had given his report based on Ex.P.44, which is the building plan approved. He had given the valuation report for the purpose of Income Tax Returns. He admits in the cross examination that, M.O.1 to M.O.31 are the photographs of the house of A-1 at K.K.Nagar, Madurai. He admits that the lawn in the building was not valued by him. The house front elevation not valued. His valuatio....
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....sented by them during the house warming ceremony. There is no documentary proof for this claim. The trial Court deleted Rs. 43,800/- the value shown for the two A/c Machines (Serial No.22), since the value of the A/c machines is included in the construction cost of the building. 44. In so far as other items, the trial Court has accepted the prosecution value. For the sake of argument, even if the said explanation is accepted, assuming that the relatives of A-1 and A-2 presented those household articles during the house warming ceremony, the entire value of these house hold appliances like Colour TV - Serial No.20 for Rs. 20,390/-; BPL Fridge - Serial No.21 for Rs. 21,350/-; Three sofa set - Serial No.23 for Rs. 7000/-; Honda Generator - Serial No.24 for Rs. 21,200/-; Dish antenna - Serial No.25 for Rs. 12,000/-; Office table with 6 chairs - Serial No.26 for Rs. 11,800/-; One dinning table with 7 chairs - Serial No.27 for Rs. 11,000/- and Teak wood single and double cots (each 2 in Nos) - Serial No.28 for Rs. 20,000/- only a total sum of Rs. 1,24,740/- can be reduced from the total value of the assets acquired during the check period. At the most, the dispute in valuation can be ....
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....e makes a report of such fact to the Government within a period of one month. Sub-rules (4) and (5) provide, inter alia, that in any other case, the government servant shall not accept any gift without the sanction of the Government and if the gift exceeds Rs 2000, except through an account payee cheque. Rule 17 deals with investment, lending and borrowing and provides inter alia that government servant may give to, or accept from a relation or a personal friend, a purely temporary loan. Rule 19 lays down that the government servant must intimate the details of property inherited or acquired by the government servant. There is no absolute embargo or prohibition in the Rules and all that is required is sanction or permission from the Government. 12. In the instant case, every single amount received by the appellant has been proved on record through the testimony of the witnesses and is also supported by contemporaneous documents and intimations to the Government. It is not the case that the receipts so projected were bogus or was part of a calculated device. The fact that these amounts were actually received from the sources so named is not in dispute. Furthermore, these am....
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....pression states the obvious as is clear from the judgment of this Court in N. Ramakrishnaiah [N. Ramakrishnaiah v. State of A.P., (2008) 17 SCC 83 : (2010) 4 SCC (Cri) 454] . 42. Thus, it is evident from the aforesaid that the expression "known source of income" is not synonymous with the words "for which the public servant cannot satisfactorily account." The two expressions connote and have different meaning, scope and requirements." 46. In the instant case, the known source of income for A-1 and A- 2 was the pay received from the Legislative Assembly and the Agricultural income. The salary income and other perks of A-1 is spoken P.W-8 Soundarabai Satyavati and P.W-9 Ethendrababu. The total pay drawn by A-1 during the check period is Rs. 61,597/- for the period before he become as Minister and Rs. 1,55,581/- for the period after he become as Minister. The Statements for the respective period are Ex.P-28 and Ex.P-29. The Learned Counsel for the appellants contend that the travelling allowances during the check period not taken into account. The pension as M.L.A for the period 1977 to 1980 not taken into account. The travelling allowance is given for the money spent on t....
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....d accepted herself for being assessed by the Income Tax Department. Therefore, in this context, the question arises whether the joint possession of the premises by the husband and wife and the unaccounted money which has been recovered from the house could be said to be in exclusive possession of the accused." 50. In the present case, contrary to K.Inbasagaran case, the wife of the public servant is arrayed as second accused. She had no independent source of income till she got married the Public Servant in the year 1983 or thereafter. There was no property yielding income acquired by her till 1992. A-2 being charged for aiding and found guilty of the said charge, therefore the dictum laid by the Hon'ble Supreme Court in K.Inbasagaran case does not apply to the case in hand. 51. With regard to A-2, the dictum laid by the Hon'ble Supreme Court in P.Nallammal and another -vs- State Rep. by the Inspector of Police reported in 1999 (6) SCC 559 squarely applies. Having obliged her husband (a public servant) to keep the ill-gotten income other than the known source of income to account for, by lending her name for purchase of properties both in her name and in the name of h....
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....tead of Rs. 37,71,590/- then the asset worth Rs. 33,25,136/- will be disproportionate after deducting the likely savings of Rs. 2,45,454/- during the check period (Statement VI). Then, the percentage of disproportionality will be 417.34% instead of 442 % . 54. Thus, it is evident that the deceased first accused being a Public Servant had acquired wealth above 400% of his known source of income. From undeclared source, the properties been acquired by the public servant (A1) in his name and in the name of his wife (A-2) also in the name of his minor children. A-2 have lend her name for purchasing the property through source undeclared. Therefore, the trial Court judgement of conviction dated 15/11/2000 is hereby confirmed. 55. As far as the sentence imposed on A-2 for aiding, the Learned Counsel for the appellant submitted that, A-2 been facing the ordeal of criminal prosecution for more than 25 years. The prosecution was laid against A-1 due to political rivalry and her husband, who was public servant is no more. Being a lady above 80 years, she may be spared from incarceration. 56. The offence being acquiring wealth by a public servant beyond his known source of income and....