Cash recovered from employee of politician’s trust rightly added to politician’s income: HC

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  • Last Updated on 7 March, 2022

cash seized from employee of politician's trust; voters; politician; politician income; income tax seizure

Case Details: Durai Murugan Kathir Anand v. ACIT - [2022] 136 70 (Madras)

Judiciary and Counsel Details

    • C. Saravanan, J.
    • P.S. Raman, Sr. Counsel and R. Sivaraman for the Petitioner. 
    • A.P. Srinivas, Sr. Standing Counsel for the Respondent.

Facts of the Case

Assessee was a politician who contested the election from Vellore Parliamentary Constituency. On 01-4-2019, Rs. 11.49 crores in cash was recovered from the house party workers. The cash was kept for distribution to the Voters to secure the victory of the assessee in the parliamentary election.

Mr S. Srinivasan, brother of a party worker, came forward and gave a voluntary statement that such cash belonged to him. He also said that he earned the cash in his real estate business. Later, he applied to settle the case before the Settlement Commission by declaring the seized cash to his income.

The Assessing Officer (AO) added the cash recovered from the party worker as income in the hands of the assessee under section 269A. However, the assessee contended that such cash didn’t belong to him and thus, couldn’t be added to his income. AO rejected the assessee’s contention and passed the order. The assessee filed the writ petition before the Madras High Court.

High Court Held

The Madras High Court held that the statement of Mr S. Srinivasan claiming that the cash belonged to him does not satisfy the test of preponderance of probability that the cash indeed belongs to him. He had not produced any records to substantiate that the cash belonged to him. Thus, there was a preponderance of probability that the cash belonged to the assessee.

Merely because Mr S. Srinivasan came forward and gave a sworn statement claiming ownership over seized money does not mean that the liability that can be fastened on the assessee can shift him. Further, applying to settle the case before the Settlement Commission by declaring the seized cash was irrelevant.

The cash was not found under control, and the possession of the said, Mr S. Srinivasan. It was found in the residence of party workers with packet markings of the Municipal Wards, falling under the Vellore Parliamentary Constituency from where the assessee was contesting. The presumption under Sections 132(4A) and 292C though a rebuttable presumption, was to be presumed against the assessee.

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