Jurisprudentiol-Friday's cases

By Vijay Kumar

Legal Corner Icon — the image was hosted by the publisher and was not captured.NDPS

Failure to examine panch witness and variation in purity of samples results in acquittal of accused under NDPS Act by the High Court

THE High Court held:

In a large number of cases involving the NCB, there is a failure to produce the panch witness named. There are cases where panch witnesses are not associated at all and it is sought to be explained by the prosecution that despite its request no person from the public came forward to join in the raid. The latter explanation has been accepted by some Courts by taking judicial notice of the fact that the members of the public are generally reluctant to be involved in criminal cases as witnesses. However, in a case where the NCB specifically names a public witness as being associated in the arrest and seizure, its failure to produce such person for cross-examination must be specifically explained by it.

In the present case the failure to produce the public witness was attributable to a false address given for the witness. This raises serious doubts as to whether such a witness existed at all. It will amount to falsification of the trial Court record if the thumb impression on the arrest and seizure memo is attributed to a witness who is not able to be produced and it is shown that the address given for him, even in the first instance in the summons issued by NCB, was false. This casts serious doubts on the trustworthiness of the prosecution version and in that circumstance the benefit of doubt should certainly go to the accused.

Income Tax

Whether payment on sale of shares can be treated as mere accommodation of cash, in case of availability of DMAT account showing credit of share transactions and contract notes from brokers - NO: High Court

THE assessee is an individual. It was noted that the assessee was purchasing and selling the shares through a broker in Mumbai. It was also noted that the assessee however transacted through the broker at Calcutta, which itself raised doubt about the genuineness of the transaction. The companies, whose shares were traded on exchange namely Bolton Properties, Prime Capital and Mantra were not having sufficient business activities justifying the increase in their shares prices. The AO, therefore, concluded that certain operators and brokers devised a scheme to convert the unaccounted money of the assessee to accounted income and the assessee utilized this scheme. Therefore, assessee's claim regarding capital gain was disallowed and addition of Rs.25,93,150/- was made u/s 68. On appeal, the CIT(A) upheld the order of AO. On further appeal, the Tribunal reversed the order of the CIT(A).

The issue before the Bench is - Whether payment on sale of shares can be treated as mere accommodation of cash, in case of availability of DMAT account showing credit of share transactions and contract notes from the brokers. NO is the answer.

Customs

A one line sentence that the case in volves a pre-meditated modus operandi and is a prima facie case in favour of revenue cannot constitute an order of pre-deposit - since no sufficient reasons given, matter remanded to Commr(A) for disposal of appeal on merits: CESTAT

THE Commissioner of Customs (Appeals), Mumbai - II dismissed the appeals filed by the appellant and its proprietor for non-compliance with the provisions of Section 129E of the Customs Act, 1962.

In the interim order dated 22/01/2013, the only reason given for ordering pre-deposit is that the instant case involves a pre-meditated modus operandi and, therefore, a prima facie case is made out in favour of Revenue. Accordingly, the lower appellate authority had directed the Proprietor to pre-deposit Rs.5 lakhs and the appellant was directed to pre-deposit Rs.48,29,708/- being the differential duty confirmed in the order passed by the adjudicating authority.

See our Columns Friday for the judgements