9911796707
TMI Blog1996 (4) TMI 102X X X X Extracts X X X X X X X X Extracts X X X X ..... " Where any amount is borrowed on a hundi from, or any amount due thereon is repaid to, any person otherwise than through an account payee cheque drawn on a bank, the amount so borrowed or repaid shall be deemed to be the income of the person borrowing or repaying the amount aforesaid for the previous year in which the amount was borrowed or repaid, as the case may be : Provided that, if in any case any amount borrowed on a hundi has been deemed under the provisions of this section to be the income of any person, such person shall not be liable to be assessed again in respect of such amount under the provisions of this section on repayment of such amount. Explanation.---For the purposes of this section, the amount repaid shall include the amount of interest paid on the amount borrowed. " The short facts are as follows : The respondent-assessee is a registered firm carrying on business in grains and cereals. The relevant assessment year is 1978-79 with the previous year ending with March 31, 1978. The assessee borrowed the following amounts of hundi from Messrs. P. P. M. Sankaralinga Nadar Sons, Virudhunagar : Date Amount (Rs.) 6-7-1977 10,000 6-7-1977 10,000 11-7 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the objects and reasons for the introduction of this section. The reference there is only to the Wanchoo Committee report which had made reference to unearthing black money and preventing its proliferation. In other words, the object was only to see that the transactions of borrowal by hundi will be made visible by making the transaction go through a bank. From this purposive approach it would be apparent that the object of identifying the payee is achieved whether it is sent by a crossed account payee cheque or a crossed demand draft. Learned counsel for the petitioner laid stress on the fact that section 69D does not refer to a bank draft while other sections refer to that alternative mode of payment. We notice that payment by either an account payee cheque or account payee bank draft, was considered to be necessary under section 40A(3), which was introduced from April 1, 1968, as well as section 269T, which was introduced with effect from July 11, 1981, and section 269SS which came into effect from April 1, 1984. The provisions of section 69D came into effect in between, on April 1, 1977. A perusal of the analogous sections shows that they were also concerned with the transpare ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ission by the Central Legislature of the expression "account payee crossed bank draft" in section 69D, by inadvertence, as held in the abovesaid decision of the Andhra Pradesh High Court. He further relies on the following passage in Sampath Iyengar's Law of Income Tax, Ninth edition (1994), at page 47 : " A casus omissus cannot be supplied by the court except in the case of clear necessity and when reason for it is found in the four corners of the statute itself but at the same time a casus omissus should not be readily inferred and for that purpose all the parts of a statute or section must be construed together and every clause of a section should be construed with reference to the context and other clauses thereof so that the construction to be put on a particular provision makes a consistent enactment of the whole statute. This would be more so if literal construction of a particular clause leads to manifestly absurd or anomalous results which could not have been intended by the Legislature. In some situations, however, the courts supplement the words of the statute to give 'force and life' to the intention of the Legislature and are compelled to perform some judicial serv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ayment of that borrowed amount, it would be absurd to hold that section 69D is attracted and that the amount repaid should be fictionally deemed to be income under the said section. Such a thing, according to learned counsel, could not have been at all the intention of the Legislature when it introduced section 69D. According to him, as laid down in CIT v. Gwalior Rayon Silk Mfg. Co. Ltd. [1992] 196 ITR 149 (SC), tax laws have to be interpreted reasonably and in consonance with justice adopting a purposive approach. He also relies on V. Guruviah Naidu and Sons v. CIT [1995] 216 ITR 156 (Mad). He also submits that even in a draft, relevant parties could be identified or traced. Even where the draft is obtained by paying cash to the bank, the name and address of the party paying the cash and applying for the draft have to be entered in the challan, which has to be submitted to the bank. That apart, he also points out that in the case of the abovesaid repayment by draft, the payee's name alone has to be identified, the payer being the assessee himself and the draft itself would show the payee's name. We have considered the rival submissions. In Suganchand and Co. v. Brahmayya and Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment would often provide the solution to the problem of interpretation. Further, in CIT v. K. S. Vaidyanathan [1985] 153 ITR 11 (Mad) [FB], the majority view is, the rule of strict construction applies only to charging sections and not to machinery sections, like section 2(m) of the Wealth-tax Act, 1957, which defined the term "net wealth" for the purpose of levy of wealth-tax. There also, it was observed that the principle of purposive construction has to be applied, which would promote the general legislative purpose underlying the provision. Here also, section 69D could be considered only as machinery section. Further, in view of the fact that the interpretation which learned counsel for the Revenue wants to put on section 69D would lead to absurd result, particularly in the present case, which is a case of repayment of admittedly borrowed amount, the different phraseology used in the other abovereferred to sections, viz., section 40A(3), section 269T and section 269SS by itself will not lead to the conclusion that the Legislature, when it enacted section 69D, deliberately intended to exclude account payee crossed bank drafts in enacting the abovesaid deeming provision. No d ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
