The Hindu has made available a copy of the judgement of John Michael Cunha J. in the case of State vs. Selvi. J. Jayalalitha (pdf). The judgement exposes the intricate arrangements that were made to launder the huge amount of cash credits that were received by J. Jayalalitha (former Chief Minister of Tamil Nadu) from alleged corrupt means. The judgement also raises disturbing questions as to the role of the auditors of the front companies in seeking to camouflage the true nature of the transactions. A few passages from the judgement are noteworthy.
(i) As in s. 68 of the Income-tax Act, the onus is on the accused to explain the nature and source of the investment & cash credits because he has special knowledge about how a particular asset was acquired or an investment therein was made. Such proof includes proof of the identity of the person who according to the accused provided the source, capacity of such person to advance or spend the money, and lastly, the genuineness of the transaction. On facts, the accused have failed to offer any satisfactory explanation as to the enormous unexplained credits entered into their bank accounts. Whatever explanation offered by the accused by way of confirmatory letters are proved to be false and bogus. The identity of the persons who provided the source is not proved. The transactions which resulted in the cash credit is also not established (Kale Khan Mohammed Hanif (1963) 50 ITR 1 (SC) followed);
(ii) The auditors examined by the accused are found to be propped up to support the false defence set up by the accused. It is proved in evidence that the auditors examined by the accused did not handle their accounts during the check period and they were not conversant with the true facts. It is also proved in evidence that, the returns and the balance sheet and the profit and loss account were maneuvred solely with a view to offer an explanation to the huge unexplained credits entered in their respective bank accounts;
(iii) Mere declaration of property in the Income Tax returns does not amount to showing the same was acquired from the known source of income. The prosecution could show that, there was no real source of income with the assessees and the public servant is the real source. In the instant case, the prosecution has succeeded in proving beyond reasonable doubt that the only source for the acquisition of the large assets is A-1 (J. Jayalalitha) herself.
Mr. Dominic Desa is right. Punish all the culprits . i do not understand a gentleman says do not involve government officials why? Are they the son in laws of government. Usually dud brains as they cannot think as any leader but just managers manage all frauds possible while sideways earning illegal wealth. But show of as great intelligentia that is the problem!
In USA for eg long term capital gain tax is zero if one’s single income is $.38,900.- or if couples combined income is $.73,800.- why indian intelligent parliamentarians do not act like US congressmen?
okay why heftily paid taxmen who get hefty cash DA do not think? May be mentally rusted, but we as tax payers meet their hefty salaries and perks thanks to Manmohan singh’s great ideas of 6th pay commission… indian parliamentarians decide their own salaries, perks unlike in the UK where there is an independent commission which is assessing independently not higher than any senior civil servant, after all MPs are also servants of people is it not?
so a lot of rusted men crowd in all kinds of legislatures of all kinds so too in public civil servants when so how indian economy can improve, like Chinese economy where all are punished for misappropriations without exception!
will india improve?
If governance fails meaninglessly with the help of so called professionalism which thrives on all kinds of corrupt practices is there any light like a ‘light a candle in darkness’!
Somebody got undue benefit hence has paid the bribe.
We should identify the culprits who paid the bribe & punish them. We should confiscate the undue benefit acquired by this bribe & charge a heavy fine.
Then only the bribe givers will disappear.
None is blaming any. System is not working in the was it was expected but what we see system is for obvious reasons of revenue men manipulate the tax notices and tax collections to further their individual benefits as tax officers that is the bane worse than cure .
Fact is half knowledgeable in the garb of tax men are harassing assesses is the import that kind only is promoting Jayalalithas Karunanidhis lalloos mulyams and so on.
Except JJ all the above wanted that court shall not punish the politicians badly tainted by all kinds of corruption in Rajya sabha and tried to get passed a constitutional amendment so that these taxmen n the politicians g on gung ho on assesses in whatever way they wanted; but miserably failed as people are your bosses not you the government or you revenue man you all need to realize.
Corruption is being fostered by politics and public servants through and through but see what happened in China there they even send such politicians and public servants to jails and so on on. Till such time India growth story is jut a drama pitch only!
Gear up well to needs of times, how changes take place;
Other day i was delivering a lecture on faith and globalization in a group of professors in USA they liked that idea as that kind of courses only can help people cooperate if we respect their faith religion then they would yours that kind of thing only can resolve conflicts between Israel and Palestine ;
once we address the issues directly without shadow boxing we may achieve something; india is still not level up well why corruption is only eating India,
taxmen use notices for obvious reasons like police man how he uses criminals for their personal gain but sure long term is not possible.
In india politicians in governing seats punish opponents thru tools like tax men , police man. that is why arrogance we see in public servants, politicians in power, that is the vital probleml
In British india corruption was there but the government punished through courts both giver and taker but what is today.
sec 68 is used with the idea pf sec 271(1)(c) is used so that that Mr X , public servant can get obvious advantage over assesse is the real story behind is the factum!
Black money business: Receiver is the main culprit and giver is the earner only by selling of transactions from reliable source only but actually they don’t have anything. I am agree with the views expressed by Dr. G. Balakrishnaiah. There is a need to control over the Financial bodies and professional who certified these type of transactions because of these are the main authenticate bodies who know well about the transaction.
Further the justice is depend on the facts and evidence on record if the department ignore these on primary stage then the other party got benefit in higher judiciary.
The news item regarding disclosure in THE HINDU regarding JJ’s cash credits does not enthuse an ordinary person acquainted with judicial decisions on Revenue Assessments. The questions unanswered are: What happens to FUNDAMENTAL RULES OF INTERPRETAION: SPECIFIC LAWS OVER GENERAL LAWS/WHICH IS SPECIFIC LAW: ANTI CORRUPTION ACT OR INCOMETAX/WEALTHTAX ACT? If an intelligent Finance Minister thinks that by bypassing IT/WT Acts Deemed Public Servants can be easily be tried under Anti Corruption Act rather than going through rigours of DRI/IT/WT/INVESTIGATION/ENFORCEMENT etc., what will happen? That is those who do not come under Deemed Public Servants can escape since the success rate of Investigation/Enforcement is negligible while trial in a court is an easy one. Is it not a dichotomy when the ITATONLINE is blaming ASSESSING OFFICERS as harassments and umpteen number of judgments blaming ITDEPT while praise is made on DVAC I.e., Is DVAC more qualified/ efficient than ITDEPT. The success rate ofValuation under IT/WT Acts is very much low while valuation by DVAC can be accepted. What about concealment of income/wealth and Center’ s due of Taxes?
Please read the 1136 Pages judgement before reaching to any conclusion. Auditors or Income Tax Department officials are not involved. Whole case is based on financial statements filed before various authorities. Auditors have audited whatever available in Books of Account. Auditor is no way liable for the properties acquired and not shown in Books of Account. Accused have acquired property which was not accounted by them in Books of Account.
Accused were showing virtually nothing in Books of Account. However, they acquired a lot of properties
True there is clear perjury that need be tried on taxmen concerned as the taxman uses section 68 in collution with CAs for obvious reasons a common problem in indian tax system one side; here politicians also committed perjury definitely without any shadow of doubt; how can u punish just receiver while leaving Scott free the giver.
without a giver how 3000 acres are acquired by JJ?
without a giver how JJ acquired cash?
without a giver how she acquired 300 pairs of shoes and other pairs?
So it is lacking full justice is done when full justice is not done then justice is not done after all precondition for justice in crimes is ‘beyond the shadow of doubt’ is mandatory, if not under the same principle the accused gets benefit of doubt doctrine protection;
so it is sure either Hon HC or SC in JJs appeals for bail would grant her plea for bail, ad the matter is not completely settled under constitutional tenets;
Lei us observe how higher courts act as justice not seems to have been done is apparent unless givers are also prosecuted as also great professionals and public servant, relevant politicians are tried under perjury!
so JJ has a definite chance for bail in the matter;
Again judge Mr. Cunha did his best, congratulate him for his own limitations level, after why we have a structure of higher judiciary? is it just a spectator judiciary? clearly No.
Like Gita is itself is based on Limitation principle; Analogy is you have a book, that is bound under a law principle of limitation, else the book shall have end at all; so too every law and every section has a limitation else nothing can meaningfully work like earth rotating spherically!
Every knowledge and everything is like Mahishasura – truth Man himself is a Mahishasura – unruly Bull with enormous ignorance well portrayed in every Navarathri depiction of Mahishssuramardhini but we as nuts we treat that knowledge provided y scriptures as some joke , most of the logical principles emanated from scriptures not from great law makers in parliament or legislatures , if one realizes then wisdom dawns on man!
why we struggle world over ever on same things just because we cross the understanding of Scriptures scripted by wise men of ancient past and then great venerable commentators like Vyasa maharishi, Valmiki, Vashita to name a few…in india like Buddha, Sankara, Ramunaja, Dr. Radhakrishnan our former president of india, ….
Dear sirs
It is not a correct interpretation. The it dept is a govt dept with lot of official .pl avoid it.
Comments could have been reserved till appeal in the interest of justice. Bias is apparent.
K.Srinivasan.
The auditors should be tried for perjury and distorting the facts to the advantage of the accused. The Hon. Court need to order investigation in the role played by the auditors as accomplices in perpetrating the crime.
Parantap Chandurkar
Without involving income tax officer it can not be happen. Ignorance of ITO should come under scanner