INCOME TAX OFFICER Vs. GADAMSETTY NAGAMAIAH CHETTY

JUDGEMENT

(1.) This appeal is filed against the judgment in CC No. 4 of 1989 by the Special Judge for Economic Offences at Hyderabad.

(2.) The brief facts are as follows : A complaint was filed pursuant to the direction of the CIT, Andhra Pradesh, Guntur, under s. 279(1) of the IT Act. A-1 to A-3 along with G. Subba Rao and Kum. G. Subhadramma all belonging to Cuddapah are the owners of the house property bearing D. No. 18/285 situated at Badarkhan Masjid Street, Cuddapah, and they all proposed to sell the said house property to A-4 and another Meda Vijayalaxmi and they have filed an application under s. 230A(1) of the IT Act on 13th Nov., 1987, enclosing a copy of the sale deed proposed to be registered with the Sub-Registrar, Cuddapah, before the ITO, A-Ward, Cuddapah, requesting for issue of a certificate under s. 230A(1) of the IT Act so as to enable them to register the sale deed as proposed. The sale consideration as disclosed by A-1 to A-3 and the other two is Rs. 1,20,000. On 14th Nov., 1987, the ITO, A-Ward, Cuddapah, has carried out survey operations under s. 133A of the Act on the business premises of A-4 and in the said survey, an agreement for sale of the above said property executed by A-1 to A-3 along with two others on 27/07/1987, on a stamped paper was seized and the sale consideration mentioned in that document was Rs. 3 lakhs as against Rs. 1,20,000 disclosed in the application under s. 230A(1) of the IT Act and the said agreement was impounded. The ITO, A-Ward, Cuddapah, and B-Ward, Productor, summoned the accused and recorded their statements. In the sworn statements given before them, they have stated that the sale consideration was understated at Rs. 1,20,000 at the instance of A-4 and that they have no intention of evading any tax. Subsequently, on 28th Dec., 1987, all the accused Nos. 1 to 3 along with G. Subba Rao and G. Subhadramma have filed separate applications under s. 230A(1) of the Act declaring the sale consideration at Rs. 60,000 each. Thus, A-1 to A-3 have made a statement in the application under s. 230A(1) filed on 13th Nov., 1987, which they either knew or believed to be false which is punishable under s. 277 of the IT Act. Therefore, they are liable to be punished under s. 278 of the IT Act.

(3.) In support of the prosecution case, PWs 1 and 2 were examined and exhibits P-1 to P-17 were marked. On the basis of the evidence, charges under s. 277 r/w s. 278 of the IT Act, 1961, against A-1 to A-3 and charge under s. 277 r/w s. 278 of the IT Act against A-4 were framed. The charges were explained to the accused. Thereafter PWs 1 and 2 were called and cross-examined and exhibit P-18 to P-23 were marked. The accused were examined under s. 313, CrPC, after the evidence of the prosecution was closed. In their evidence they stated that they have filed an application in Form No. 34A under s. 230A of the IT Act under exhibit P-1 on 13th Nov., 1987, and that the house property as per exhibit P-2 sale deed was proposed to be sold for a consideration of Rs. 1,20,000 and that as per exhibit P-3 the stamped papers were purchased in the name of A-4 on 24/07/1987, and the agreement exhibit P-3 was executed on 27/07/1987, signed by A-1 to A-3 and another and the total consideration for the sale of the house as per exhibit P-3 is Rs. 3 lakhs and a sum of Rs. 40,000 was also paid to the vendors on 24/07/1987, and further agreed to pay the balance of Rs. 2,40,000 before 26th Nov., 1987. They further stated that A-1 to A-3 have filed another application in Form No. 34A under exhibits P-11 to P-13 and Subhadramma filed exhibit P-14 showing a total consideration of Rs. 3 lakhs and that in their statements they have admitted the sale consideration was only Rs. 3 lakhs but not Rs. 1,20,000. Further, they stated that as per the market value they have filed the application. They have not examined any in defence.