KLG Tradefin (P) Ltd v Ashoka Hawai & Shoes (P) Ltd

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The Tax PublishersAPO Nos 53 and 54 of 2022, CS Nos 40 and 41 of 2022, IA GA No 1 of 2022 2022 TaxPub(DT) 7970 (Cal-HC) IN THE CALCUTTA HIGH COURT HARISH TANDON & SHAMPA DUTT (PAUL), JJ. KLG Tradefin (P.) Ltd. v. Ashoka Hawai & Shoes (P.) Ltd. APO Nos. 53 & 54 of 2022, CS Nos. 40 & 41 of 2022, IA GA No. 1 of 2022 15 July, 2022 Appellant by: Suresh Sahni, Soumik Ghosh and Karuna Bose, Advocates Respondent by: Anirban Ray, VVV Sastry, Tridip Bose and Vidhi Sharma, Advocates JUDGMENT *Harish Tandon, J.* The seminal point involved in the instant appeal is whether the Court can pass an order directing the Income Tax authority to make an investigation over the transactions between the parties to be unconscionable and opposed to public policy and submit the report for further course of action, in a suit simplicitor for recovery of money lent and advanced by the plaintiff to the defendant. 2. The plaintiff has approached the Division Bench with an Intra-Court appeal under clause 15 of the letters patent assailing the said order primarily raising an above point and not on the ground of refusal to pass an appropriate interim orders which, according to the plaintiff may be dealt with at the time of final disposal of the interlocutory application. Therefore, the consideration is restricted to the above point and the competence and jurisdiction of the Court to embark its journey to such so-called difficult terrain beyond the conceivable limits and jurisdiction bestowed upon it under the law. 3. The prelude to the litigation is required to be adumbrated and ensued when the plaintiff-appellant advanced a sum of Rs. 65 lakhs through bank transactions in favour of the defendant-respondent with clear stipulation that the aforesaid amount is repayable together with an interest at the rate of 12 per cent per annum. The aforesaid amount was lent and advanced on diverse dates between 18-1-2020 and 18-9-2020 corroborated with the documentary evidence more particularly, the bank statement of the plaintiff's bank account. It is undeniable that the part payment to the tune of Rs. 1, 37, 650 was made on 10-10-2020 on account of the repayment of interest and the TDS was also deducted of the specified amount from time to time during the Financial Year 2019-20 and 2020-21. The suit was filed when the plaintiff-appellant demanded the return of the said amount together with an interest and the defendant neglected and failed to pay the said amount. 4. It is pertinent to record that the letter of demand for repayment of the amount together with an accrued interest thereupon was called upon the defendant-respondent which has been duly replied to. Interestingly, a plea was taken by the defendant-respondent in the said reply that the alleged transaction was not real but is an accommodated entry or 'Jamma Kharji' and, therefore, the claim is fraudulent and fictitious as the plaintiff-appellant never actually gave the said amount from its own resources or the income but the unaccounted money in cash was given by the defendant-respondent to the plaintiff-appellant and, therefore, there was no real transactions entered into by and between the parties. Even the same defence has been projected and/or repleted in the written objection filed by the defendant-respondent to an application of the plaintiff-appellant under Order 39, rules 1 and 2 read with Order 38, rule 5 of the Code of Civil Procedure. SUBSCRIBE FOR FULL CONTENT

The Tax PublishersAPO Nos 53 and 54 of 2022, CS Nos 40 and 41 of 2022, IA GA No 1 of 2022
2022 TaxPub(DT) 7970 (Cal-HC)

IN THE CALCUTTA HIGH COURT

HARISH TANDON & SHAMPA DUTT (PAUL), JJ.

KLG Tradefin (P.) Ltd. v. Ashoka Hawai & Shoes (P.) Ltd.

APO Nos. 53 & 54 of 2022, CS Nos. 40 & 41 of 2022, IA GA No. 1 of 2022

15 July, 2022

Appellant by: Suresh Sahni, Soumik Ghosh and Karuna Bose, Advocates

Respondent by: Anirban Ray, VVV Sastry, Tridip Bose and Vidhi Sharma, Advocates

JUDGMENT

Harish Tandon, J.

The seminal point involved in the instant appeal is whether the Court can pass an order directing the Income Tax authority to make an investigation over the transactions between the parties to be unconscionable and opposed to public policy and submit the report for further course of action, in a suit simplicitor for recovery of money lent and advanced by the plaintiff to the defendant.

2. The plaintiff has approached the Division Bench with an Intra-Court appeal under clause 15 of the letters patent assailing the said order primarily raising an above point and not on the ground of refusal to pass an appropriate interim orders which, according to the plaintiff may be dealt with at the time of final disposal of the interlocutory application. Therefore, the consideration is restricted to the above point and the competence and jurisdiction of the Court to embark its journey to such so-called difficult terrain beyond the conceivable limits and jurisdiction bestowed upon it under the law.

3. The prelude to the litigation is required to be adumbrated and ensued when the plaintiff-appellant advanced a sum of Rs. 65 lakhs through bank transactions in favour of the defendant-respondent with clear stipulation that the aforesaid amount is repayable together with an interest at the rate of 12 per cent per annum. The aforesaid amount was lent and advanced on diverse dates between 18-1-2020 and 18-9-2020 corroborated with the documentary evidence more particularly, the bank statement of the plaintiff's bank account. It is undeniable that the part payment to the tune of Rs. 1, 37, 650 was made on 10-10-2020 on account of the repayment of interest and the TDS was also deducted of the specified amount from time to time during the Financial Year 2019-20 and 2020-21. The suit was filed when the plaintiff-appellant demanded the return of the said amount together with an interest and the defendant neglected and failed to pay the said amount.

4. It is pertinent to record that the letter of demand for repayment of the amount together with an accrued interest thereupon was called upon the defendant-respondent which has been duly replied to. Interestingly, a plea was taken by the defendant-respondent in the said reply that the alleged transaction was not real but is an accommodated entry or 'Jamma Kharji' and, therefore, the claim is fraudulent and fictitious as the plaintiff-appellant never actually gave the said amount from its own resources or the income but the unaccounted money in cash was given by the defendant-respondent to the plaintiff-appellant and, therefore, there was no real transactions entered into by and between the parties. Even the same defence has been projected and/or repleted in the written objection filed by the defendant-respondent to an application of the plaintiff-appellant under Order 39, rules 1 and 2 read with Order 38, rule 5 of the Code of Civil Procedure.