TaxTMI 
TaxTMI 
TaxTMI 
2025 (12) TMI 1733
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....the purchase of a house and the land in the year 2014. The accused promised to return the money on or before October, 2015. She issued a cheque in the complainant's favour in November 2017 to discharge her liability. The complainant presented the cheque, but it was dishonoured with the remarks 'funds insufficient'. The complainant served a notice upon the accused asking her to repay the amount within 15 days of the receipt of the notice. The accused failed to repay the amount; hence, the complaint was filed before the learned Trial Court for taking action against the accused as per the law. 3. The learned Trial Court found sufficient reasons to summon the accused. When the accused appeared, a notice of accusation was put to her for the commission of an offence punishable under Section 138 of the NI Act, to which she pleaded not guilty and claimed to be tried. 4 The complainant examined himself (CW-1) to prove his case. 5. The accused, in her statement recorded under Section 313 of Cr.P.C., denied that she had borrowed Rs.12,00,000/- from the complainant. She stated that she had handed over a blank cheque to the complainant. She was not liable to pay the amount mentioned in....
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....his submission. 9. I have given considerable thought to his submissions made at bar and have gone through the records carefully. 10. The present appeal has been filed against a judgment of acquittal. It was laid down by the Hon'ble Supreme Court in Surendra Singh v. State of Uttarakhand, 2025 SCC OnLine SC 176: (2025) 5 SCC 433 that the Court can interfere with a judgment of acquittal if it is patently perverse, is based on misreading/omission to consider the material evidence and reached at a conclusion which no reasonable person could have reached. It was observed at page 440: "12. It could thus be seen that it is a settled legal position that the interference with the finding of acquittal recorded by the learned trial judge would be warranted by the High Court only if the judgment of acquittal suffers from patent perversity; that the same is based on a misreading/omission to consider material evidence on record; and that no two reasonable views are possible and only the view consistent with the guilt of the accused is possible from the evidence available on record." 11. This position was reiterated in P. Somaraju v. State of A.P., 2025 SCC OnLine SC 2291, where....
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....amount of Rs.12,00,000/- was equivalent to his 5 years' salary. He claimed that he had withdrawn the money from the bank, but did not explain why the money was not directly transferred to the account of the accused. He claimed that he had borrowed some money from Raj Kumar, but did not examine him to establish this fact. Learned Trial Court had rightly held that it is highly unlikely that a person would borrow money to advance it to a third person. He claimed that the loan was advanced to purchase the land, but also admitted that the accused owned the land and the house, which shows that the accused did not have any necessity to purchase the land. All these circumstances made the complainant's version doubtful, and the learned Trial Court was justified in doubting the complainant's case. 15. It was submitted that the complainant is not required to prove the existence of liability, and the burden is upon the accused to rebut the presumption. This submission will not help the complainant. The cross-examination of the complainant made it doubtful that he had advanced money to the accused, and the learned Trial Court was justified in insisting upon the proof of advancing the loan. I....
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....ished, the accused is entitled to acquittal. It was observed: "29....Furthermore, there was no financial capacity or acknowledgement in his income tax returns by the appellant to the effect of having advanced a loan to the respondent. Even further, the appellant has not been able to showcase as to when the said loan was advanced in favour of the respondent, nor has he been able to explain as to how a cheque issued by the respondent, allegedly in favour of Mr Mallikarjun, landed in the hands of the instant holder, that is, the appellant." 18. A similar view was taken in John K. Abraham Versus Simon C. Abraham & Another (2014) 2 SCC 236, wherein it was held:- "9. It has to be stated that in order to draw the presumption under Section 118 read along with 139 of the Negotiable Instruments Act, the burden was heavy upon the complainant to have shown that he had required funds for having advanced the money to the accused; that the issuance of the cheque in support of the said payment advanced was true and that the accused was bound to make the payment as had been agreed while issuing the cheque in favour of the complainant." 19. It was submitted that the evidence ....
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....2017. In the absence of the details of the advancement of the loan, the cheque was issued beyond the period of limitation and cannot be said to have been issued in discharge of her legally enforceable debt. It was laid down by this Court in Social Leasing (India) Ltd. v. Rajan Kumar Kanthwal, 2025 SCC OnLine HP 3131, that a cheque issued for repayment of time-barred debt does not fall within the purview of Section 138 of the NI Act. Thus, the complaint was not maintainable as per the averments made in the complaint and the statement on oath. 24. Learned Trial Court held that the loan of Rs.10,00,000/- could not have been advanced in violation of Section 269SS of the Income Tax Act, 1961, and this would make the complainant's case suspect. This finding is contrary to the settled position of law. It was laid down by this Court in Surinder Singh vs. State of H.P. 2018(1) D.C.R. 45 that contravention of Section 269 SS of the Income Tax Act will give rise to a penalty, but will not invalidate the transaction. It was observed: - 5. The relevant portion of Section 269 SS of the IT Act reads thus: - "(a) the amount of such loan or deposit or the aggregate amount of suc....
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....S was to curb this menace." 9. In light of the aforesaid observations, it cannot but be said that Section 269-SS only provides for the mode of accepting payment or repayment in certain cases so as to counteract evasion of tax. However, Section 269-SS does not declare all transactions of loans by cash in excess of Rs.20,000/- as invalid, illegal or null and void, as the main object of introducing the provision was to curb and unearth black money. 25. A similar view was taken by the Hon'ble Supreme Court in Sanjabij Tari v. Kishore S. Borcar, 2025 SCC OnLine SC 2069, wherein it was observed: "19. Recently, the Kerala High Court in P.C. Hari v. Shine Varghese, 2025 SCC OnLine Ker 5535 has taken the view that a debt created by a cash transaction above Rs.20,000/- (Rupees Twenty Thousand) in violation of the provisions of Section 269SS of the Income Tax Act, 1961 (for short 'IT Act, 1961') is not a 'legally enforceable debt' unless there is a valid explanation for the same, meaning thereby that the presumption under Section 139 of the Act will not be attracted in cash transactions above Rs. 20,000/- (Rupees Twenty Thousand). 20. However, this Court is of th....