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TMI Blog2010 (3) TMI 468X X X X Extracts X X X X X X X X Extracts X X X X ..... dual capacity. 3. Heard the learned counsel for the petitioners and Mr. K. Ramasamy, learned Special Public Prosecutor (income-tax cases). 4. The prosecution as against the first accused in the case has been quashed by order of this court in Crl. O. P. No. 16623 of 2006 dated December 3, 2009 (R. Baba Shankar v. ITO [2010] 321 ITR 113 (Mad)). I have had the benefit of perusing such order and I find that the contentions now raised by either counsel excepting for one additional submission by the learned Special Public Prosecutor (income-tax cases) are the same. When the facts and the law applicable are correctly stated in the order, I can do no better than reproducing what is stated in the said order. The said order reads as follows (page 114) : "The petitioner, who is the accused in EOCC No. 177 of 2005 on the file of the Additional Chief Metropolitan Magistrate (Economic Offences), Egmore, Chennai, wherein he is facing trial for the alleged offences under sections 276AB read with sections 269UC and 269UL(2) of the Income-tax Act, 1961 (hereinafter called 'the Act'), has filed the above criminal original petition seeking to quash all further proceedings therein. 2. A perus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... p; lakhs. The total extent of the landed property as a whole was mentioned under schedule A of the sale deed as 13,642 sq. ft. and undivided share of the 933 sq. ft. was mentioned under schedule B of the sale deed. (e) Though two separate sale deeds have been executed by accused Nos. 1 and 2 in favour of accused No. 3 the property conveyed was a single unit measuring a total area of 13,642 sq. ft. as mentioned in schedule A of each sale deed. Therefore, the market value of the property as a single unit which was transferred by accused Nos. 1 and 2 to accused No. 3 was Rs. 30 lakhs. (f) That in pursuance of section 269UC of the Income-tax Act, 1961, both the transferors, accused Nos. 1 and 2 and the transferee, accused No. 3 represented by accused No. 4 herein, have legal obligation to file Form No. 37-I prescribed under rule 48L of the Income-tax Rules, 1962, within the statutory time limit prescribed thereunder, since the value of the property situated at Door No. 7, First Main Road, Gandhi Nagar, Adyar, Chennai-20 exceeds Rs. 25 lakhs. (g) It is further alleged in the complaint that the above legal obligation of filing Form No. 37-I as required under section 269UC of the Incom ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve provision is also not attracted since it applies only when section 269 of the Income-tax Act can be invoked. Since the transaction of the petitioner is less than Rs. 25 lakhs none of these provisions are attracted. 7. The learned counsel further submitted that the petitioner is an independent income-tax assessee and similarly the second accused, who is the wife of the first accused, is also an independent income-tax assessee and both of them have honestly shown the purchase and sale of the property concerned promptly in their respective income-tax returns for the corresponding year. The learned counsel further submitted that the petitioner sold a separate and distinct immovable property valued at Rs. 15 lakhs and therefore, no offence is committed. 8. The learned counsel submitted that the complaint proceeds on misconception that accused Nos. 1 and 2 are the owners of the entire property measuring 13,642 sq. ft. which is shown as "A" schedule in their respective sale deeds which has resulted in a miscarriage of justice. 9. On the aforesaid submissions the learned special public prosecutor for the income-tax cases was heard. 10. The learned special public prosecutor submitted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the first respondent was their equal share in the said immovable property, that the apparent consideration was, therefore, less than Rs. 25 lakhs and that, therefore, the provisions of Chapter XX-C would not apply. We should add that even if the agreement of transfer had been so drawn as to show the transfer of the equal shares of the second and third respondents in the said immovable property, our conclusion would have been the same for, looked at realistically, it was the said immovable property which was the subject of the transfer." 11. I have considered the said submissions made on either side and perused the materials available on record and the decisions relied upon by the learned counsel for the respondent. 12. In the complaint in paragraph 5, the complainant/respondent has stated as follows : 'Accused Nos. 1 and 2 are the owners of the landed property comprised in TS No. 23, Block No. 30 of Kottur Village wherein Corporation Door No. 7, 1st Main Road, Gandhi Nagar, Adyar, Chennai, measuring an extent of 13,642 sq. ft. the value of which is exceeding Rs. 25 lakhs.' 13. Again, in paragraph 6, it is stated that accused Nos. 1 and 2 by two separate sale deeds, dated Ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... them under the two independent sale deeds bearing Document No. 773 of 2002, dated March 28, 2002 and Document No. 774 of 2002, dated March 28, 2002. 17. Since individual undivided shares purchased by accused Nos. 1 and 2 have been dealt with by them under the aforesaid two sale deeds, it cannot be said that a single unit has been dealt with by them under two different sale deeds by splitting the single unit. Simply because, accused Nos. 1 and 2 happened to be the husband and wife, the prosecution seems to have been launched by clubbing two properties sold under two different sale deeds as a single unit, which, in the considered view of this court, cannot be done. For example, if two 500/22,000 shares of 13,842 sq. ft. of the entire landed property had been sold by two individuals, who are not related to each other, whether the complaint could be filed and, in, considered view of this court, such a complaint cannot be filed. When accused Nos. 1 and 2 are income-tax assessees and they are two different legal entities in the eye of law, the purchases made by them under two sale deeds can be dealt with by them individually and as such the sales effected by them cannot be clubbed toget ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... immovable property. That the equal shares of the second and third respondents therein are to be transferred to the first respondent is a necessary incident of such sale. The parties to the transaction filed Form No. 37-I with the Appropriate Authority and correctly stated that what was being sold was the said immovable property and not the one-half shares of the second and third respondents therein. It also stated correctly that the total apparent consideration for the transfer of the said immovable property was Rs. 47 lakhs. From that, the apex court came to the conclusion that the consideration for such transfer was the sum of Rs. 47 lakhs. The apex court has pointed out that it is of no consequence that the second and third respondents owned the immovable property as tenants-in-common that this is how they had shown their ownership in their income-tax returns. On the aforesaid reasonings, the apex court reversed the judgment of the High Court holding that what had been sold by the second and third respondents to the first respondent was their equal share in the said immovable property that the apparent consideration was, therefore, more than Rs. 25 lakhs and that, therefore, the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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