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TMI Blog1990 (10) TMI 12X X X X Extracts X X X X X X X X Extracts X X X X ..... e and made it appear as if the third petitioner continued to be a partner even after April 1, 1977, fabricated the partnership deed dated April 1, 1977, fabricated the day-books by omitting to enter the real profits due to petitioners Nos. 2 and 4, fabricated the ledger by showing false capital account and false current account, produced these false documents before the Income-tax Officers and, on the basis of the misrepresentation contained in those documents, made the Income-tax Officers pass assessment orders for the assessment years 1978-79 and 1979-80 at reduced rate, delivered before the Income-tax Officers false returns and false statements, forged the signatures of the third petitioner in the registration deed and in the partnership deed, used the above forged documents as genuine, falsely made verification in the returns for the above years for continuing the registration that there was no change in the constitution of the firm, delivered these false verifications before the Income-tax Officers and committed the above offences in pursuance of the conspiracy and made themselves liable for punishment under sections 120B, 193, 196, 420, 467 and 471 of the Indian Penal Code, 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hird petitioner was questioned by the officers, he stated that he did not know anything about the day-to-day management and affairs of the firm, that his share in the business was 25 per cent. but beyond that he did not know anything about the actual profit due to him. On the basis of this material, the prosecution case is that the third petitioner had ceased to be a partner of the firm from April 1, 1977, and, consequently, the statements made to the Department, the returns filed, the declarations made and all connected records on the basis of which the assessment orders for the assessment years 1978-79 and 1979-80 had been passed were also false. The admitted signatures of the third petitioner in the warrant of authorisation for the search, in the panchnama relating to the search and in the sworn statement recorded after the search, were compared with the application for registration of the firm for the year 1978-79, with the new partnership deed and it was found by the document expert that the signatures in the two latter documents were not those of the third petitioner. On the basis of this evidence, the prosecution sought to establish its case. During trial, on behalf of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... facts. Extensive submissions were made referring to the caselaw touching on the various aspects which the learned public prosecutor, by way of lengthy submissions and by referring to case-law, sought to meet. However, in view of my finding on one question which is the crux of the prosecution case, namely, whether the prosecution has proved that the third petitioner was not a partner even after March 31, 1977, it is needless to refer to all the other submissions, both on facts and on law, made by the respective learned counsel. The entire prosecution case is built on the allegation that the third petitioner ceased to be a partner of the firm on March 31, 1977, and thereafter, he was not a partner and the partnership consisted only of the second petitioner and the fourth petitioner and that, for the purpose of getting a concession under the Income-tax Act, 1961, in the matter of assessment, all the petitioners conspired together and made it appear, as if the third petitioner also continued to be a partner of the firm. It is, on this premise that the entire prosecution case is built up. We have, therefore, to find out whether, as a fact, the prosecution has succeeded in establishin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d during the trial. A scrutiny of the facts, therefore, has been necessitated under the above circumstances. It is the prosecution case that when Joseph retired from the firm and the firm was reconstituted, the third petitioner continued to be partner of the firm. This was on March 31, 1977. When that is the prosecution case, one fails to see at what stage the third petitioner had ceased to be a partner. According to the prosecution, when the partnership was first formed in 1976, the third petitioner was a partner. According to the prosecution, exhibit P-3(a) is a true document and it reflects the true facts. In the next year, according to the prosecution, Joseph alone had retired. The third petitioner had not retired. If, in 1976, under exhibit P-3(a), the third petitioner was a partner of the firm, I am unable to find at what stage the third petitioner ceased to be a partner. It is to be kept in mind that exhibit P-17 ledger as well as exhibit P-20 ledger for the expenditure and export, etc.., all show that the third petitioner also was a partner of the firm. His share of the initial investment is shown. The related day-book contains a ledger page for the third petitioner and t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat the third petitioner had ceased to be a partner from March 31, 1977. This inference is sought to be drawn by the prosecution on the ground that the income from the first petitioner-firm is shown as having been divided equally between the second petitioner and the fourth petitioner and that no separate share has been shown as payable to the third petitioner. Even if such an inference could be made, it would not be decisive in establishing that the third petitioner was not a partner. This would not be the only inference that could be drawn from exhibits P-24 and P-31 series. We cannot miss the fact that petitioners Nos. 2 and 3 are brothers and the fourth petitioner is the only stranger in the firm. It is the statement of the second petitioner that he is managing the business of all his sisters and his only brother, the third petitioner herein, and also the business of his late mother and the two trusts, one created by his grandfather and the other created by his senior paternal uncle. Even according to the prosecution, the third petitioner was not managing the affairs of the firm. In a partnership, it is not necessary that all the partners should know everything about the part ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o find out whether the profit that is shown in the first petitioner's ledger as having been credited to the third petitioner is a false document or is mere paper entry would be to find out whether the income from the first petitioner-firm is reflected in the returns and in the statement of accounts filed by the third petitioner in his individual capacity., If they are not so reflected, the prosecution would be justified in concluding that the ledgers and account-books of the first petitioner-firm contain false entries. On the contrary, we find that, in exhibit P-8, the statement of account for the assessment year 1978-79, a sum of Rs. 22,027 has been shown as the share of the third petitioner in the profit of the first petitioner-firm. In no ambiguous terms, it is mentioned in exhibit D-8 that the share of profit from Jay Frozen Foods, Madras, is Rs. 22,027. The evidence of DW-2 is that, on the basis of these returns, exhibit D-9, assessment order, was passed in which the above profit has been accepted as the third petitioner's asset. Similarly, for the assessment year 1979-80, exhibit D-10, showed loss of Rs. 17,746, as being his share of the loss in the first petitioner-firm, DW- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the opinion of a fingerprint expert, the opinion of a handwriting expert could not be taken with certainty, particularly in this case, when the third petitioner whose signature is alleged to have been forged himself contends that it is his signature and that it is genuine. Further, it is also common knowledge that the handwriting of a person as well as his signature would change and vary depending upon several factors. Hence, no undue importance should be given to the evidence of PW-10. As stated earlier, when the prosecution rests purely on circumstantial evidence to establish its case, that circumstance must be such as to lead to the only inference that the facts put forward by the prosecution are proved. In the instant case, since exhibits D-13 to D-17 are reflected in exhibits D-7 to D-11 which had come into existence long prior to the search and seizure, it is impossible to hold that the prosecution has succeeded in establishing that the third petitioner had ceased to be partner after March 31, 1977. Unless that basic fact is proved, none of the offences can be said to have been committed. 1, therefore, hold that the prosecution had failed to establish the basic fact that th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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