Delhi District Court
C.B.I. vs . 1. Kamlesh Chander Aggarwal on 8 August, 2014
IN THE COURT OF DINESH KUMAR SHARMA
SPECIAL JUDGE (PC ACT), CBI 01,
SAKET COURTS, NEW DELHI
CC No.01/13
Unique Case ID No.02406R0538562009
C.B.I. Vs. 1. Kamlesh Chander Aggarwal
S/o Late Sh. Laxmi Narayan Aggarwal
R/o C118, East of Kailash,
New Delhi.
2. Saraswati Devi Aggarwal
W/o Late Sh. Laxmi Narayn Aggarwal
R/o C118, East of Kailash,
New Delhi.
3. Sheela Aggarwal
W/o Sh. Kamlesh Chandra Aggarwal
R/o C118, East of Kailash,
New Delhi.
4. Rajeev Chaudhary
S/o Sh. Mahender Prasad Chaudhary
R/o Devakpara, Chandan Nagar,
Distt. Hugli, West Bengal.
RC No. : DAIA2005/0034
u/Ss : 13(2) r/w 13(1)(e) of the POC Act, 1988 and
Sec. 109 PC r/w 13(2) r/w 13(1)(e) of the POC Act and
Sec. 193 IPC.
CBI Vs. KC Aggarwal & Ors. CC No.01/13 Page 1 of 116
Date of Institution : 29.07.2009
Received by transfer on : 05.02.2013
Arguments Concluded on : 05.08.2014
Date of Decision : 08.08.2014
Appearances:
Sh. S. Krishna Kumar, Ld. PP for CBI.
Sh. Jagdish Singh, Ld. counsel for the accused persons.
Sh. VK Ohri, Ld. counsel for A4 Rajeev Chaudhary.
JUDGMENT
1.0 Pursuant to a source information regarding possession of disproportionate assets RC No. DAIA00305/2005/0034 dated 26.06.2005 was registered against Sh. KC Aggarwal, DANICS (hereinafter referred as A1). A1 was posted as Joint Director (Education) GNCT of Delhi in the pay scale of Rs.14,30018,300/. He had joined the government service in September 1982. During his service, the accused amassed huge assets in his name and in the name of members of his family through corrupt and illegal means disproportionate to his source of income. As per FIR, during the check period between September 1982 to June 2005, the total salary received by accused was around Rs.34,00,000/. After deducting 1/3rd for kitchen expenses i.e. Rs.11,33,000/ the total savings of accused would have been Rs. 22,67,000/. In comparison to this, the accused was having assets amounting to Rs.1,11,57,650/ approximately. Thus, A1 was in possession of CBI Vs. KC Aggarwal & Ors. CC No.01/13 Page 2 of 116 disproportionate assets to the tune of Rs.88,90,650 (approx.) as against income of Rs.34,00,000/ for which he cannot satisfactorily explain. Investigation revealed that A1 (DOB 08.08.1954) was born in the family of Smt. Saraswati Devi Aggarwal (hereinafter referred to as "A2") and Late Sh. Laxmi Narayan, a businessman. He had four sisters and two brothers. A1 was married to Smt. Sheela Aggarwal (hereinafter referred to as "A3") on 21.06.1977. A2 had also been residing with A1 after the death of her husband and was a housewife. A1 and A3 were blessed with three sons namely Sh. Apoorva Aggarwal (DOB 31.07.1978); Sh. Pankaj Aggarwal (DOB 17.11.1979) and Sh. Saurabh Aggarwal (DOB 10.10.1982). Sh. Apoorva and Sh. Pankaj got married in 2004 and 2005. A1 had also worked with the Government of Rajasthan for the period September, 1977 to September, 1982. A1 joined UT Civil Services as a probationer on 23.09.1982 and held various postings in the Union Territory of Delhi. 1.1 During investigation, the check period was fixed as 01.01.1991 to 30.06.2005. Investigation revealed that A1 to A3 had following immovable properties in Delhi: (A) House property at C118, East of Kailash, New Delhi :
A1 and A2 purchased this property in July, 1999 for Rs. 34,00,000/ and in addition they spent an amount of Rs.2,72,000/ towards corporation tax/stamp duty. Initially, Agreement to Sell of this property was CBI Vs. KC Aggarwal & Ors. CC No.01/13 Page 3 of 116 executed on 02.04.1998 with Late Sh. L. N. Aggarwal (father of A1) and he had paid Rs.9,00,000/ as an advance. However, subsequent to death of Late Sh. L. N. Aggarwal on 20.04.1998, A1 and A3 were substituted as intending purchaser. A1 paid a sum of Rs.34,000/ as brokerage. A1 also spent a sum of Rs.12,00,000/ on renovation and addition in the property and, therefore, total cost of the premises worked out to be Rs.25,00,000/ (34,00,0009,00,000 paid by Late Sh. L. N. Aggarwal) plus Rs.2,72,000 (corporation tax) plus Rs.35,000/ (brokerage charges) plus Rs.12,00,000 (renovation) which comes out to Rs.40,00,000/. In addition to this, A1 had also paid the regularization charges in the sum of Rs.57,987/. (B) Property Flat No. B114, Sheikh Sarai in the name of Smt. Saraswati Devi Aggarwal.
The CBI has not included this property in the chargesheet as disproportionate asset since there was title dispute of the property. (C) Plot in Hanuman Nagar Society, Jaipur, Rajasthan in the name of A3.
This property was provisionally alloted to A3 on 15.11.1991 which was later on cancelled on 26.11.1997. However, investigation revealed that A3 had paid a sum of Rs.4,650/ which has been taken as her expenditure.
CBI Vs. KC Aggarwal & Ors. CC No.01/13 Page 4 of 116 (D) Purchase of plot in Village Gheora by M/s Bhagwati Agencies Pvt.
Ltd. ( hereinafter referred to as "BAPL" ):
M/s BAPL through its Director A3 purchased this property on 09.08.1991 for Rs.1,90,000/ plus duty/tax being Rs.15,200/. Further land were also purchased in March, 1997 by M/s BAPL for Rs.70,000/ of which tax/duty in the sum of Rs.17,600/ were paid, thus, total sum of Rs.1,90,000 + 15,200 + 70,000 + 17,600 = Rs.2,92,800/ was taken as disproportionate asset.
(E) Flat No.705, Maitri Apartment, Plot No. 29, Sector9, Rohini, Delhi.
This property was acquired by A1 prior to the check period after raising loan from the Department. This premises was rented out from January, 1991 till December, 1999 and the rental income has duly been added in the income of A1.
(F) Land at Village Tikri, New Delhi Investigation revealed that this land was purchased before check period, however, the construction on this land having being carried out after the check period the cost of construction is being taken as Rs.4,00,000/ in view of the valuation report on record.
CBI Vs. KC Aggarwal & Ors. CC No.01/13 Page 5 of 116 (G) Land in Village Kanjhawala in the name of minor sons of A1 and A3 .
During searches, three Sale Deed (Ex.P2) dated 18.07.1996 of land purchased for a consideration of Rs.65,000/ each plus stamp duty/corporation taxes being Rs.5,200/ regarding land at Village Kanjhawala were seized. The total land so bought was 13 bighas and 17 biswas, in the year 1996, while all the sons were school going minor children and payments were made in cash. IO has also mentioned in the charge sheet itself that the sons of the accused had been filing their Income Tax Returns out of the income generated from tuition and gifts received from relation. In the charge sheet, the sum of Rs.2,10,600/ was taken for D.A. purposes against this land.
(H) Flat at Rajasthan Housing Board Colony:
This flat was alloted to A1 on 24.06.1996 which was duly intimated to the Department. The payment made by A1 in the sum of Rs. 15,000/ on 13.04.1994 is being taken as expenditure. Since A1 did not make payment of the balance amount, the allotment was cancelled. (I) Land at Village Chirkhana, District Alwar in the name of A3.
A3 had bought this property vide Sale Deed dated 03.07.1998 (Ex.P3) for a consideration of Rs.1,14,400/ and stamp duty of Rs.11,440/ and another Sale Deed dated 04.07.1998 for a consideration of Rs.1,12,000/ CBI Vs. KC Aggarwal & Ors. CC No.01/13 Page 6 of 116 and stamp duty of Rs.11,200/. Thus, the value of these properties in the sum of Rs.2,49,040 is being taken as an asset of A3.
(J) Shop no. GI out of property no.1/142, Ganda Nala, Panja Sharif, Nichelson Road, Mori Gate, Delhi.
A3 purchased this property vide Sale Deed (Ex.P1) for consideration of Rs.1,50,000/ and Rs.12,000/ towards stamp paper, on 11.08.1997 and thus, value of this property for DA purchase was taken as Rs. 1,62,000/ (K) Land purchased by M/s BAPL through A3 at Village Alipur.
M/s BAPL purchased this property from Sh. Om Prakash Mittal in cash through three different Agreement to Sell (Ex.P9) for a sum of Rs. 65,000+55,000+45,000. In the Income Tax Return for Assessment Year 20012002, the cost of construction of the godown at the abovesaid property was mentioned as Rs.6,04,000/ thus, the net asset value of the property for DA was taken as Rs.7,69,000/. The investigation revealed that pursuant to the execution of Will dated 21.02.1998 (Ex.P44) by Late Sh. L. N. Aggarwal, A1 received Rs.42,20,792/ on account of proceeds of various accounts/FDRs and the same were taken as an income. The net carry home salary of A1 during the check period was found to be Rs.14,37,194/. A1 had also an income of Rs.82,51,786/ on account of interest during the check CBI Vs. KC Aggarwal & Ors. CC No.01/13 Page 7 of 116 period, the details of which have been given at para 17 of the charge sheet and have not been reproduced herein for the sake of brevity. 1.2 During the check period, A1 and the members of his family invested Rs.5,64,915/ in LIC and received money back/maturity value of Rs.8,26,605/ and, therefore, earned a sum of Rs.2,62,690/. A1 and the members of his family were having total credit balance in the sum of Rs. 71,12,200/ in different bank accounts the details of which have been given at page no.2021 of the charge sheet and have not been reproduced herein for the sake of brevity. The investigation revealed that A1 had made an expenditure of Rs.26,18,848/ during the check period the details of which are as follows:
S. Particulars Amount (in No Rs.) 1 Payment of House Tax towards C118, East of Kailash, New Delhi. 1,04,361/ 2 Payment of House Tax towards Flat No.705A, Maitri Nagar, CGHS, 28,000/
Sec9, Rohini vide receipt no. G8 No. 790093 dated 30.03.2002. 3 Payment of mobile phone no. 932224515 in the name of Sh. K. C. 20,713/ Aggarwal since 02.03.2003.
4 Kitchen Expenses of the order of one third of gross salary Sh. K. C. 10,61,500/ Aggarwal for the period 01.01.1991 to 30.06.2005. 5 Expenses i.e. bank charges on account of availing of OD of Rs. 8,96,414/ 74,70,000/ on 18.02.2003 with ICICI Bank against pledge of ICICI and RBI bonds i.e. interest debited as on 30.06.2005. 6 Payment of premium on personal accident policy with Royal Sundaram 3,400/ Alliance Insurance Company Ltd. on 16.11.2004.
7 Payment made to Rajasthan Housing Board in June 1996 towards 15,000/ purchase of flat at Mansarovar, Jaipur which was cancelled subsequently. CBI Vs. KC Aggarwal & Ors. CC No.01/13 Page 8 of 116 8 Educational expenses of Sh. Pankaj Aggarwal while studying at Roorki 1,01,523/ (Mess expenses Rs.47,198/ and tuition fee Rs. 54,325) 9 On 20.01.2001 Sh. Pankaj Aggarwal purchased Hyundai Ascent Car No. 2,22,779/ DL 3CJ 1607 and in all spent Rs.6,62,779/ the vehicle was stolen on 28.02.2002. Insurance claim of Rs.4,40,000/ on 07.05.2003. Accordingly, net expenditure works out to Rs.2,22,779/. 10 Expenses of Sh. Pankaj Aggarwal towards purchase of vehicle no. DL 91,491/ 2CZ 0941 for Rs.3,66,491/ on 20.01.2003 and its sale for Rs.2,75,000/ on 23.05.2006.
11 Educational expenses during the year 19962001 of Sh. Apurv Aggarwal 15,680/ while studying at IIT Delhi.
TOTAL 26,18,848/ 1.3 Investigation revealed that Smt. Sheela Aggarwal (A3) had income in
the sum of Rs.12,72,711/ during the check period, the details of which is reproduced as follows:
S. Particulars Amount (in No Rs.) 1 Interest on FDR with Bank of Rajasthan Ltd. since 17.09.1998 as on 17,320/ 30.06.2005. 2 Interest on account no.1040242412161 with Times Bank. 2,220/ 3 Interest on account no.9886 with State Bank of Patiala, Kalkaji. 66/ 4 Interest on account no.23941 with SBI, GKI, New Delhi. 1,086/ 5 Interest earned in A/c No. 002901507 with ICICI Bank, GKI. 2,39,232/ 6 Income on account of rent of godown of M/s Bhagwati Agencies run 9,91,030/
by Smt. Sheela Aggarwal received from Sh. Suraj Bhan and reflected in A/c No. 1031376 of the company.
7 On 20.04.2005 she received as interest on the IDBI bonds. 1,745/
8 Income on account of interest on ICICI Bonds 20,012/
TOTAL 12,72,711/
CBI Vs. KC Aggarwal & Ors. CC No.01/13 Page 9 of 116
1.4 A3 had also earned a sum of Rs.1,11,250/ in the land transaction
situated at Green Field Colony, Faridabad as Director M/s Best Fit Apparels India Pvt. Ltd. The movable assets of A3 were found in the sum of Rs. 31,66,553/, the details of which are reproduced as below:
S. Particulars Amount (in No Rs.) 1 Credited with Bank of Rajasthan Ltd. in respect of A/c No. 1031384 6,020/
opened in the name of M/s Sita Medicare Pvt. Ltd. as on 30.06.2005. 2 Credited with Bank of Rajasthan Ltd. in respect of A/c No. 1031376 36,388/ opened in the name of M/s Bhagwati Agencies as on 30.06.2005. 3 FDR with Bank of Rajasthan Ltd. as on 30.06.2005. 53,320/ 4 Smt. Sheela Aggarwal entered into a contract with Sh. Mahendra 20,00,000/ Pratap Singh MD, M/s Info Com. Digital System for purchase of Plot No. 52, Sec34, Gurgaon for Rs.20 lacs. She paid Rs.1 lac through cheque no. 180877286 all for Rs.10,000 each on 05.11.1995 drawn on SBI, GKI A/c No. 28148 of Sh. K. C. Aggarwal and Rs. 10,00,000/ through cheque drawn on her account no. 9286 with SBP, Kalkaji. Similarly, she paid Rs.9 lacs on 05.10.1995 through cheque drawn on her A/c 23941 with SBI, GKI. Thus she paid Rs. 20,00,000/ for acquiring the property and the cheques were credited in the account no. 709 of the company maintained with Syndicate Bank, Nehru Place on 05.10.1995. However, this transaction did not materialized and is subjudice in the High Court of Delhi. Accordingly, Rs.20 lacs is being taken as her investment. 5 Credit in A/c No.002901507 with ICICI Bank, GKI. 10,088/ 6 FDR with Bank of Rajasthan in the name of Bhagwati Agencies. 1,00,000/ 7 Stocks held in the name of Smt. Sheela Aggarwal in physical form as 4,56,832/ per Affidavit dated 07.02.2007 of Shri K. C. Aggarwal. 8 Stocks held in the name of Smt. Sheela Aggarwal in demet form as 5,03,905/ per Affidavit dated 16.01.2008 of Shri K. C. Aggarwal. CBI Vs. KC Aggarwal & Ors. CC No.01/13 Page 10 of 116 9 FDR held with Bank of Rajasthan, East of Kailash in the name of 36,000 + Smt. Sheela Aggarwal/Bestfit Apparels India Ltd./ Bhagwati 60,000 + Agencies. Interest thereon is not been taken with consideration as the 82,000 + FDR was not liquidated during the cheque period. 1,00,000 = 2,78,000/ TOTAL 31,66,553/ 1.5 A3 had also invested in IDBI (Tax Saving Bonds) in the sum of Rs.30,000/ as well invested in ICICI Prudential Life Insurance Policy in the sum of Rs.2,40,000/. The Tax Saving Bonds and ICICI Insurance Policy were redeemed after the check period, however, since it were invested during the check period, the same were taken as movable asset. Smt. Sheela Aggarwal also found to have investments in the sum of Rs.37,94,817/, the details of which are as follows:
S. Particulars Amount (in No Rs.) 1 Credit in CA No. 880142 of Bhagwati Agencies with SBI, Chandni 27,185/ Chowk as on 30.06.2005. 2 Credit in A/c No. 241212033 of Bhagwati Agencies opened with 1,36,420/
HDFC Bank by Smt. Sheela Aggarwal as on 30.06.2005. 3 Investment in Policy No. LFB 1083497 on 28.03.2004 37,500/ 4 Investment with DMC Plantation for allotment of plot at Kashi Pur, 60,880/ Nainital.
5 Shares/Stocks recovered in the name of Smt. Sheela Aggarwal. 4,56,832/ 6 Funds advanced by Bhagwati Agencies to Sh. Sanjay Gupta/JSR 31,00,000/ Overseas uptill 30.06.2005 Rs.1,42,30,000/ and received back Rs. 1,11,30,000/. Accordingly, net fund advance Rs.31 lacs.
TOTAL 37,94,817/
CBI Vs. KC Aggarwal & Ors. CC No.01/13 Page 11 of 116
1.6 A3 had incurred an expenditure of Rs.1,03,000/ which includes
losses suffered as per Income Tax Return by M/s BAPL for the period 19911992 till June, 2005. M/s BAPL had also paid a sum of Rs.69,427/ to M/s L.M. Prem and Co. Pvt. Ltd. as lease amount of premises at Hauz Khas Village.
1.7 Investigation revealed that A1 had total movable assets in the sum of Rs.8,46,305/ in the name of his minor sons and during the check period the total income of sons of A1 was 9,97,224/, the details of which are given at page no.28 of the charge sheet and have not been produced herein for the sake of brevity.
1.8 A2 Smt. Saraswati Devi Aggarwal (mother of A1) purchased a plot measuring 389 sq. yards at Nai Wala Estate, Karol Bagh from M/s Bhola Construction for Rs.5,00,000/ vide Sale Deed dated 20.11.2003 and spent a sum of Rs.30,000/. A2 earned a total of Rs.9,203/ and had movable assets in the sum of Rs.21,18,469/ and made an expenditure of Rs.61,096/. The investigation concluded that A1 to A3 had assets for a sum of Rs.5,04,800/ at the beginning of the check period, the details of which are as below: S. Particulars Amount (in No. Rs.) 1 Flat No. 705 A, Maitri Apartment Plot No.29, Sector9, Rohini, 2,53,000/ Delhi in the name of K. C. Aggarwal.
2 Land at Village Tikri Kalan in the name of Smt. Sheela Aggarwal. 97,200/ CBI Vs. KC Aggarwal & Ors. CC No.01/13 Page 12 of 116 3 Amount deposit with Rajasthan Housing Board for Flat No. 22/21/1 4,600/ MIGB, Mansarover, Jaipur in the name of K. C. Aggarwal purchased on 10.01.1980.
4 Amount spend towards purchase of land at Vill. Gheora, Rajasthan. 1,15,000/
TOTAL 5,04,800/
1.9 The accused persons acquired total assets in the sum of Rs.
4,09,27,400/, the details of which are as below: S. Details of Assets Amount No. (Rs) 1 Total cost of property C118, East of Kailash, New Delhi alongwith 4006000 renovation and alteration.
2 Total cost of property in Vill. Gheora, Khasra No. 705 (019), 708 292800 (10), 709 (10) and 710 (018) in the name of Bhagwati Agencies Pvt. Ltd.
3 Cost of construction of Farm House on the land at Tikri Kalan, 400000 Delhi.
4 Total cost of property at Kanjhawalan in the name of minor sons of 210000 KC Aggarwal 5 Total cost of property at Kalu Sarai in the name of M/s Sita 162000 Medicare Pvt. Ltd., its Director Smt Sheela Aggarwal. 6 Cost of land at Village Chirkhana, Dist. Alwar in the name of Smt. 249040 Sheela Aggarwal.
7 Cost of property shop No. G1, Ganda Nala, Panja Sarif, Mori Gate 162000 in the name of Smt. Sheela Aggarwal 8 Cost of land at Vill. Alipur in the name of M/s Bhagwati Agencies 769000 Pvt. Ltd. alongwith the cost of construction of Godown on it. 9 Amount spent on ICICI tax saving bond in the name of Sh. KC 130000 Aggarwal 10 Bank balance in A/c No. 901126 with ABN Amro Bank, Cannought 10250 Place, New Delhi.
CBI Vs. KC Aggarwal & Ors. CC No.01/13 Page 13 of 116 11 Bank balance in A/c No. 1508 with ICICI Bank, GK1, New Delhi. 1345094 12 Bank balance in A/c No. 002901055873 with ICICI Bank, GK1, in 25000 the name of Laxmi Saraswati Foundation.
13 Bank balance in A/c No. 1942 of KC Aggarwal and Saraswati Devi 30098 with ICICI Bank.
14 Articles except clothing observed during search at C118, East of 297415 Kailash, New Delhi.
15 Cash recovered during search at C118, East of Kailash, New Delhi. 593280 16 Jewellery observed during search at C118, East of Kailash, New 838687 Delhi.
17 Bank balance in A/c No. 47492 with SBI, IP Estate in the name of 17123 KC Aggarwal 18 Amount in the form of ICICI Bond 3300000 19 Amount in the form of investment in shares/stocks in the name of 250758 KC Aggarwal 20 Amount in the form of investment in shares/stocks in the name of 318100 KC Aggarwal (HUF) 21 Bank balance in account No. 1506 with ICICI Bank and in the form 81964 of FDR's in the name of KC Aggarwal and Sons (HUF) 22 Bank balance in account No. 1031384 with Bank of Rajasthan Ltd. 6020 in the name of Sita Medicare Pvt. Ltd. as on 30.06.2005 23 Bank balance in account No. 1031376 with Bank of Rajasthan Ltd. 36388 in the name of M/s Bhagwati Agency 24 Amount in the form of FDR's with Bank of Rajasthan Ltd. as on 53320 30.06.05 in the name of Sheela Aggarwal 25 Amount deposit with M/s Infocom Digital System Ltd. for purchase 2000000 of plot No. 52, Sector34, Gurgaon by Smt. Sheela Aggarwal 26 Bank balance in A/c No. 1507 with ICICI Bank, GK1 in the name 10088 of Sheela Aggarwal 27 Amount in the form of FDR with Bank of Rajasthan in the name of 100000 Bhagwati Agencies.
28 Amount in the form of ICICI bonds in the name of Sheela Aggarwal 30000 CBI Vs. KC Aggarwal & Ors. CC No.01/13 Page 14 of 116 29 Bank balance in A/c No. 880142 with SBI, Chandni Chowk in the 27185 name of Bhagwati Agency.
30 Bank balance in A/c No. 241212033 with HDFC Bank in the name 136420 of Bhagwati Agency.
31 Amount deposit with DMC Plantation at Kashipur for plot No. 15A 60880 32 Amount deposit in respect of Shares/Stocks in the name of Sheela 456832 Aggarwal 33 Amount deposit with Sanjay Gupta, Proprietor of M/s JSR Overseas 3100000 Ltd.
34 Amount deposit with M/s Mohan & Co., Jaipur 8575000 35 Amount deposit with MDR Jewellers, Jaipur 3677511 36 Total cost of property No. 2606 and 2607, Gali No. 45, Karol Bagh 530000 in the name of Saraswati Devi Aggarwal 37 Bank balance in A/c No. 89201 with Bank of Rajasthan in the name 12694 of Saraswati Devi 38 Amount in the form of FDR with Bank of Rajasthan in the name of 60000 Saraswati Devi.
39 Bank balance in A/c No. 9136 with State Bank of Indore, Green 32968 Park in the name of Saraswati Devi 40 Amount in the form of 4 FDR's with State Bank of Indore, Green 1000000 Park in the name of Saraswati Devi.
41 Funds deposit with Sanjay Gupta 1000000 42 Amount paid as advance for purchase of property at Gurgaon and 6000000 the DDs held in suspense Account with ICICI Bank, in respect of this purchase 43 Payment of premium to ICICI Prudential by Smt. Sheela Aggarwal 240000 44 Investment in Policy No. LFB 1083497 on 28.03.04 by Smt. Sheela 37500 Aggarwal 45 Stocks held in the name of Smt. Sheela Aggarwal in physical form 456832 as per Affidavit dtd. 7/2/07 of Sh. KC Aggarwal.
46 Stocks held in the name of Smt. Sheela Aggarwal in demet form as 503905 per affidavit dtd. 16.1.08 of Sh. KC Aggarwal.
CBI Vs. KC Aggarwal & Ors. CC No.01/13 Page 15 of 116 47 Stocks held in the name of Sh.KC Aggarwal in demet form as per 4431 affidavit dtd. 16.1.08 48 Stock held in demet form in the name of Smt. Saraswati Devi 12807 Aggarwal as per affidavit dtd. 16/1/08 of Sh. KC Aggarwal 49 FDR held with Bank of Rajasthan, East of Kailash in the name of 278000 Smt. Sheela Aggarwal / Bestfit Apparels India Ltd./ Bhagwati Agencies. Interest thereon is not been taken with consideration as the FDR was not liquidated during the check period.
TOTAL 4,09,27,400 1.10 The expenditure incurred by the accused persons during the
check period was Rs.28,52,616/, the details of which are as follows:
S. Details of Expenditure Amount
No. (Rs.)
1 Amount spent towards regularization of property C118, East of 57987
Kailash with MCD
2 Amount spent towards plot No. E13, 5, Hanuman Nagar, 4650
measuring 500 sq. yards in the name of Smt. Sheela Aggarwal 3 Amount spent with Rajasthan Housing Board for flat No. 22/21/1, 15000 MIG, Mansarovar Jaipur 4 Amount spent towards House Tax of C118, East of Kailash with 104361 MCD.
5 Amount paid towards mobile phone No. 932224515 in the name of 20713 KC Aggarwal 6 Kitchen expenses of one third of gross salary of KC Aggarwal 1061500 7 Expenses towards Bank charges on account of availing of OD with 896414 ICICI Bank.
8 Payment of premium on accident Policy with Royal Sunderam 3400 9 Educational expenses of his children 101523 10 Amount spent towards purchase and stilling of vehicle No. DL3CJ 222779 1607 CBI Vs. KC Aggarwal & Ors. CC No.01/13 Page 16 of 116 11 Expenses towards purchase and sale of vehicle No. DL2CZ 0941 by 91491 Pankaj Aggarwal 12 Education expenses of Apoorva Aggarwal in IIT Delhi. 15680 13 Amount spent towards charges of Bank of Rajasthan Ltd. in respect 380 of A/c No. 1031384 in the name of M/s Sita Medicate Pvt. Ltd. 14 Amount spent towards charges of Bank of Rajasthan Ltd. in respect 1489 of A/c No. 1031376 in the name of M/s Bhagwati Agency 15 Amount spent in A/c No. 1849 with ICICI Bank, GK1 as Bank 13384 charges 16 Losses suffered as per IT Return for the period 199192 till 83142 30.06.05 by Bhagwati Agencies.
17 Amount spent to M/s LN Prem & Co. Pvt. Ltd. towards the rent of 69427 7 shops at Darya Cha, Hauz Khas.
18 Bank charges in A/c No. 241212033 with HDFC Bank in the name 200 of Sheela Aggarwal 19 Bank charges paid by Saraswati Devi to State Bank of Indore, 61096 Green park towards availing of OD of Rs. 10 lac.
20 House Tax in respect of House Property 705A, Maitri Nagar, 28000 CGHS, Rohini.
TOTAL 28,52,616 A1 to A3 had total income in the sum of Rs.1,55,64,625/, the details of which are as under: S. Details of Income Amount No. (Rs.) 1 Income from payment of FDR's of LN Aggarwal issued from Bank 967892 of Baroda, Guwahati in the name of KC Aggarwal 2 Income from payment of Credit Balance of A/c No. 974 of LN 41563 Aggarwal with Synidcate Bank, BD Road, New Delhi in the name of KC Aggarwal.
3 Income from payment of Credit Balance of A/c No. 2933 of LN 8945 Aggarwal with Bank of Baroda, Jangpura, New Delhi. CBI Vs. KC Aggarwal & Ors. CC No.01/13 Page 17 of 116 4 Income from payment of credit balance of A/c No. 7681 of LN 4094 Aggarwal with Punjab & Sind Bank , Station Road, Jaipur. 5 Income from payment of credit balance of A/c No. 936 and amount 1548295 of FDRs of LN Aggarwal with Allahabad Bank, Subhash Nagar, Jaipur.
6 Income from payment of Credit Balance of A/c No. 76239 of LN 18610 Aggarwal with Bank of Rajasthan, Bani Park, Jaipur. 7 Income from payment of Credit Balance of A/c No. 9709 of LN 119679 Aggarwal with OBC, MI Road, Jaipur.
8 Income from payment of 4 FDRs of LN Aggarwal with Syndicate 1403583 Bank, MI Road, Jaipur.
9 Income from payment of credit balance of A/c No. 2, UCO Bank, 108130 Baneti of LN Aggarwal.
10 Income from Salary received by KC Aggarwal from his department 1437194 during 01/01/91 to 30/06/05 11 Income from interest on IDBI Bonds. 1745 12 Income from interest on Credit Balance in A/c No. 901126 with 470 ABN Amro Bank, CP, New Delhi in the name of KC Aggarwal. 13 Income from interest earned in A/c No. 9866 with HDFC Bank of 9048 KC Aggarwal.
14 Income from interest earned in A/c No. 28148 with SBI, GKI of 353 KC Aggarwal.
15 Income from interest earned in A/c No. 1508 and on FDRs with 911751 ICICI Bank GK1 in the name of KC Aggarwal.
16 Income from interest earned in A/c No. 47492 with SBI, IP Estate, 4327 New Delhi.
17 Income from interest earned on RBI bonds worth Rs. 50 lacs. 2250000 18 Income from interest on ICICI Bonds worth Rs. 33 lacs. 885133 19 Income on account of availing of OD of Rs. 74,70,000/ against 2999579 ICICI Bonds i.e. debit balance in the account as on 30.06.05. 20 Income from rent of Ground Floor, House No. C118, East of 215600 Kailash, New Delhi.
CBI Vs. KC Aggarwal & Ors. CC No.01/13 Page 18 of 116 21 Income from rent of First Floor of C118, East of Kailash, New 336000 Delhi.
22 Income from rent of Flat No. 705, Maitri Apartment, Rohini. 315000 23 Income from interest on ICICI bond of KC Aggarwal & Sons. 20012 24 Income from interest earned in A/c No. 1040292463100 of KC 4079 Aggarwal & Sons (HUF) with HDFC Bank.
25 Income from interest earned in A/c No. 002901001506 and FDRs 298689 with ICICI Bank, GKI of KC Aggarwal & Sons (HUF).
26 Income from Interest earned on FDR's with Bank of Rajasthan Ltd. 17320 in the name of Smt. Sheela Aggarwal.
27 Income from interest earned on A/c No. 1040242412161 with 2220 Times Bank.
28 Income from interest on A/c No. 9886 with State Bank of Patiala, 66 Kalkaji in the name of Sheela Aggarwal.
29 Income from interest earned on A/c No. 23941 with SBI, GK1, of 1086 Sheela Aggarwal.
30 Income from interest earned in A/c No. 002901507 with ICICI 239232 Bank, GK1, of Sheela Aggarwal.
31 Income from rent of godown of M/s Bhagwati Agencies in A/c No. 991030 1031376 of the Company.
32 Income from interest earned on IDBI Bonds in the name of Sheela 1745 Aggarwal 33 Income from interest earned on ICICI Bonds in the name of Sheela 20012 Aggarwal.
34 Income from interest earned in A/c No. 89201 with Bank of 1966 Rajasthan in the name of Saraswati Devi.
35 Income from interest earned in A/c No. 9136 with State Bank of 7237 Indore, Green Park in the name of Saraswati Devi.
36 Income from purchase and sale of property at Green Field, 111250 Faridabad by Smt. Sheela Aggarwal.
37 Income on account of investment in 8 LIC money back/maturity of 261690 policies.
TOTAL 15564625
CBI Vs. KC Aggarwal & Ors. CC No.01/13 Page 19 of 116
1.11 During the course of investigation, three high volume
transactions came to the notice which primarily became the pivot of entire DA case against the accused persons. The brief description of these three transactions are:
(1) Gift in the sum of Rs.45,00,000/ received by A1 from A2; (2) Income from shares in the sum of around Rs.51,00,000/ by A2; and, (3) Huge outstanding in the account of M/s BAPL being run by A3 (1) Income on account of receipt of gift of Rs.45,00,000/ received by A1 from A2.
A1 received a gift of Rs.45,00,000/ from his mother A2. The investigation revealed that one Sh. Amitabh Sharma was carrying out business in the name & style of M/s Grow More Construction, INC. Jaipur. Late Sh. L. N. Aggarwal and Sh. Lalit Mohan Sharma (father of said Amitabh Sharma) were friends and they entered into an understanding to carry out business of export of garments. Pursuant to this agreement, Late Sh. L. N. Aggarwal was to make available the export order and in consideration thereof, he was to receive 60% of the profit. Consequent upon this, A2 was inducted as partner vide Partnership Deed dated 01.04.1998 and she remained partner till 31.03.1999. A2 Smt. Saraswati Devi Aggarwal invested/deposited sum of Rs.51,000/ in the partnership business. During the CBI Vs. KC Aggarwal & Ors. CC No.01/13 Page 20 of 116 period 01.04.1998 to 31.03.1999, M/s Grow More Construction earned a profit of Rs.92,40,906.52 out of which Sh. Amitabh Sharma paid Rs. 45,00,000/ to A2 vide three cheques dated 06.02.199, 10.02.1999 & 23.02.1999. A2 deposited these cheques in her account no. 24679 Syndicate Bank, M.I.A. Jaipur and gifted sum of Rs.45,00,000/ to A1 by way of five demand drafts of Rs.9,00,000/ each on 24.02.1999. A1 deposited this amount in ICICI Bank, Greater KailashI. IO did not accept the export transaction as Sh. Amitabh Sharma did not produce any record pertaining to receipt of purchase orders, production of garment and its export. Investigation revealed that the transaction was designed in a manner with a sole objective to make available funds worth Rs.45,00,000/ to A2 through this channel, only in order to convert the ill gotten money of A1. The IO did not give benefit of this Rs.45,00,000/ to A1.
(2) Income from shares in the sum of around Rs.51,00,000/ by A2.
A2 received a sum of Rs.51,00,000/ on 31.03.2005 from M/s Ahilya Commercial Pvt. Ltd., Kolkata by way of proceeds of sale of 22,000 shares of M/s Continental Fiscal Management Ltd. on 24.03.2005 for Rs. 51,23,000/. During the course of the investigation, A1 stated that these shares were purchased in physical form on 12.06.2003 in consideration of payment of Rs. 2,21,340/ (Rs. 31,340/ in cash and the remaining Rs.1,90,000/ through cheque dated 16.06.2005). The investigation revealed that M/s Continental Fiscal Management Ltd. had never alloted or transferred CBI Vs. KC Aggarwal & Ors. CC No.01/13 Page 21 of 116 shares in the name of A2. Sh. Rajeev Chaudhary, Director M/s Ahilya Commercials Pvt. Ltd. (hereinafter referred to as "A4") arranged delivery of aforesaid 22,000 physical shares in the name of one Raj Kishore Routh to A2. However, M/s Continental Fiscal Management Ltd. confirmed that it never alloted/transfered shares in the name of Sh. Raj Kishore Routh of Orissa. Thus, the fact that A2 purchased/held the said shares at any point of time till March, 2005, was not substantiated. It was also revealed that trading in any manner either directly or indirectly by M/s Ahilya Commercial Pvt. Ltd. had been stopped by SEBI under Section 11(B) and 11(4) of SEBI Act 1992 vide their letter dated 30.09.2005. In the document the benefit of receipt of approximately Rs.51,00,000/ by A2 from M/s Ahilya Commercial Pvt. Ltd. was not taken into account as an income.
(3) Huge outstanding in the account of M/s BAPL being run by A3.
M/s BAPL entered into a tripartite agreement dated 27.01.2004 with M/s Project Equipment Corporation Ltd. (hereinafter referred as PEC Ltd.) and M/s Mohan & Co. M/s BAPL was to procure gold from M/s P.E.C. and to supply it to M/s Mohan & Co. The investigation revealed that as on 30.06.2005, M/s BAPL was to receive Rs.85,75,000/ from M/s Mohan & Co. Investigation also revealed that M/s Mohan & Co. had filed suit against M/s BAPL for misappropriation of its 20 kg gold and since M/s BAPL was to receive Rs.85,75,000/ from M/s Mohan & Co., this amount was taken as an asset of company for D.A. purpose. Pursuant to the above CBI Vs. KC Aggarwal & Ors. CC No.01/13 Page 22 of 116 said tripartite agreement, the litigation also commenced between MDR Jewelers and M/s BAPL vide which MDR Jewelers had claimed Rs. 35,24,990/ from M/s BAPL. However, as per books of account of M/s BAPL, it was to receive Rs.37,77,511/ from MDR Jewelers. Since the books of account of M/s BAPL itself revealed that it is to receive Rs.37,77,511/ from MDR Jewelers, it was being taken into consideration as an assets of company for D.A. purposes.
1.12 It was concluded that A1 to A3 had D.A. in the sum of Rs. 2,82,15,391/ at the end of check period. A2 and A3 were found to be party to acquiring of assets out of ill gotten money of A1 sources of which were not known. Hence, A1 and A2 abated the commission of crime of possession of D.A. to the known sources of income by A1. A4 also facilitated the commission of crime in as much as during the course of investigation he led false/fabricated evidence, the object of which was apparently to shield the commission of crime. The charge sheet was filed U/Sec.13(2) r/w 13(1)(e) of the POC Act, 1988 against A1. A2 and A3 were charge sheeted U/Sec.109 IPC r/w Sec. 13(2) r/w 13(1)(e) of the POC Act, 1988 and A4 was charge sheeted U/Sec. 193 IPC and Sec. 109 r/w Sec. 13(2) r/w 13(1)(e) of the POC Act, 1988. The sanction for prosecution against A1 was duly accorded against A1. The charge sheet was filed on 29.07.2009 and the cognizance was taken on 10.08.2009.
CBI Vs. KC Aggarwal & Ors. CC No.01/13 Page 23 of 116 CHARGE 2.0 After compliance of Sec. 207 Cr.PC, being a prima facie case, the charges against accused persons were framed on 23.08.2010. A1 was charged for offence U/Sec.13(2) r/w 13(1)(e) of the POC Act; A2 & A3 were charged for offence U/Sec.109 IPC r/w Sec. 13(2) r/w 13(1)(e) of the POC Act and A4 was charged for offence U/Sec. 109 r/w Sec. 13(2) r/w 13(1)(e) of the POC Act and Sec. 193 IPC.
PROSECUTION EVIDENCE 3.0 Prosecution examined 53 witnesses in support of its case. It would be convenient to discuss the witnesses categorywise:
3.1 In respect of the salary income of A1, prosecution has examined PW3 Sh. Vijay Pal Singh, PW45 Sh. MK Bharadwaj and PW46 Sh. HS Taneja.
PW3 Sh. Vijay Pal Singh had furnished the salary details of A1 for the period October 1989 to November 2005 except May'92 to March'95, Aug.'98 to Jan.'2000 and Aug.'2000 to Sept., 2001, during which A1 was in MCD.
Similarly, PW45 Sh. MK Bharadwaj produced the salary detail of the period Sept., 1998 to April'99 and Dec.'99 to Jan.'2000.
PW46 Sh. HS Taneja produced the salary statement of A1 for the period June' 2003 to June'2005.
CBI Vs. KC Aggarwal & Ors. CC No.01/13 Page 24 of 116
During cross examination of PW3, it was put that the total gross pay of A1 during the check period was Rs. 31,84,499/. 3.2 During the course of investigation it came that A2 Smt. Saraswati Devi had issued cheque of Rs. 5 lakhs each in the name of PW5 Sh. Mahesh Sharda and PW33 Sh. Sanjay Bansal from joint account of A1 and A2 bearirng SB A/c No. 9136 towards purchase of property No. 438/2, Ward No. 16, Gurgaon. Since the deal did not materialise, PW5 and PW33 issued the cheques for Rs. 5 lakhs each dtd. 9/3/05 in the name of A2 and these cheques were recovered during the searches and therefore, Rs. 10 lakhs was taken as an asset. During the course of investigation, it was also revealed that the total consideration amount to be paid for the purchase of the plot was Rs. 60 lakhs and for purported payment of Rs. 50 lakhs, two DD's of Rs. 25 lakhs each dtd. 31/3/05 were got issued from ICICI Bank, GKI, in the name of PW5 and PW33 against credit held in account No. 1942 of A1 and A2. However, these DDs were never presented for payment by their beneficiaries /their bankers and thus, the amount was kept by ICICI Bank in suspense account. This Rs. 50 lakhs was also taken as an asset of A1. In order to prove this transaction prosecution examined PW5 Sh. Mahesh Sharda. He stated on oath that he had purchased the property in question alongwith PW33 Sanjay Bansal and wanted to sell the same. PW9 Sh. Dinesh Singla approached him and expressed his desire to purchase this property. It was agreed to sell the property for Rs. 162 lakhs. PW9 gave two self cheques of CBI Vs. KC Aggarwal & Ors. CC No.01/13 Page 25 of 116 Rs. 1 lakh each, Rs. 11,000/ in cash and two cheques of Rs. 5 lakhs each in his name and in the name of PW33. The cheques were issued by a person namely Saraswati. The cheques were deposited and the same were duly cleared on presentation. An agreement to sell with A2 was executed and PW9 signed on behalf of A2. Lateron, a dispute arose with PW9 and thus, PW5 requested PW9 to cancel the deal. PW5 and PW33 handed over two cheques of Rs. 5 lakhs each in the name of A2 to PW9 and remaining amount received in cash by self cheques were also returned back to PW9. The property was sold to somebody else after sometime. PW5 stated that the cheques issued by them in favour of A2 were not presented. The witness stated that he had never met A2 and had met A1 only once in Noida in the company of PW9 and one friend, after he filed the civil case against PW5 and PW33 at Gurgaon and also got an FIR registered in Delhi. The suit filed in Gurgaon was dismissed and closure report was filed in the FIR registered at Delhi. In the cross examination, PW9 admitted that he and PW33 still owe a sum of Rs. 10 lakhs to A2.
PW33 Sh. Sanjay Bansal deposed on the similar lines. He proved the complaint filed by A2 as Ex.PW33/A. The witness stated that since PW9 was not able to complete transaction, it was called off with the intervention of common friends and money received was duly returned back. He also stated that A2 did not get the cheques encashed even till date, while the witness was making statement in the Court in February 2013. CBI Vs. KC Aggarwal & Ors. CC No.01/13 Page 26 of 116
PW9 Sh Dinesh Singla deposed on oath that he met A1 through his advocate. A1 was interested in purchasing the property in question and the deal was finalised at Rs. 1.82 crores. PW9 stated that he did not know on whose name A1 wanted to purchase the property. However, A1 wanted to buy the property directly from the registered owner. The witness stated that A1 had handed over two cheques in the sum of Rs. 5 lakhs each drawn in the name of PW5 and PW33. He also stated that subsequently, the sellers cancelled the deal. PW9 did not know that A2 had not encashed the cheque. During cross examination, the witness denied the suggestion that he had visited the residence of A1 on 15/2/05 and had personally received two cheques of Rs. 5 lakhs from A2.
3.3 In respect of C118, East of Kailash property, prosecution examined only PW10 Sh. Prem Lal Kukreti who proved the deposit of Rs. 57,987/ on account of regularization charges of C118, East of Kailash, New Delhi.
3.4 In respect of plot No. 13, Kalu Sarai, shown in the chargesheet in the name of A3 Sheela Aggarwal, prosecution examined PW12 Ravinder Chaudhary. The witness stated that vide registered sale deed dtd. 5/8/94, he alongwith his wife who was coowner of this plot sold it to M/s Sita Medicare Pvt. Ltd. through its Director A3 for a consideration of Rs. 1.5 lakhs paid by A1. The sale deed was proved as Ex.PW12/A. In the cross CBI Vs. KC Aggarwal & Ors. CC No.01/13 Page 27 of 116 examination, the witness admitted that as far as he remember the payment was made by A1 but he was not sure as it was quite an old issue. The witness was also not sure whether the payment was made in cash or by cheque. 3.5 The prosecution examined nine witnesses from bank. PW1 Sh. Anupam Goel proved the account of A1 and the members of his family with Royal Bank of Scotland erstwhile ABN Amro Bank and proved the account opening form of A1 as Ex.PW1/B, account opening form of Sh. Apoorva Aggarwal as Ex.PW1/C, the statement of account of A1 from November 2003 to March, 2007 as Ex.PW1/D, statement of account of Sh. Apoorva Aggarwal for the same period as Ex.PW1/E, another statement of account of A1 as Ex.PW1/G. The statement of account of M/s Bhagwati Agencies was proved as Ex.PW1/H, the account opening form as Ex.PW1/K, the statement of account of M/s Bhagwati Agencies for the period January 2001 to August 2007 as Ex.PW1/M and the resolution of M/s Bhagwati Agencies as Ex.PW1/N. The documents were submitted alongwith forwarding letter Ex.PW1/A. PW14 Sh. Rajesh Passey proved account No. 9886 maintained by A3 with State Bank of Patiala. The statement of account for the period 23/4/95 to 30/4/96 was proved as Ex.PW14/A. The photocopy of account opening form was proved as Ex.P33.
PW15 Sh. Surender Dutt proved the photocopy of ledgersheet pertaining to SB A/c No. 23941 in the name of A3 w.e.f. 18/8/94 to 22/2/97 CBI Vs. KC Aggarwal & Ors. CC No.01/13 Page 28 of 116 as Ex.PW15/E. The statement of account of SB A/c No. 28148 in the name of A1 for the period 1/6/94 to 23/12/95 was proved as Ex.PW15/G. The witness proved that the interest in the sum of Rs. 1,086.69 was paid in account No. 23941 of A3 and a sum of Rs. 353.14 was paid in account No. 28148 of A1. The witness also proved the computer generated statement of account No. 9886 in the name of Rohit Sarkar and Vibha Sarkar as Ex.PW15/K. This had reference to the cheques debited in the account of A1 and A3.
PW19 Sh. Shiv Kumar Sharma, proved the certified copy of statement of account No. 24338 in the name of Late Sh. Laxmi Narain Aggarwal for the period 3/4/87 to 2/12/93 as Ex.PW19/A. PW29 Sh. Vinod Kumar proved the production cum seizure memo dtd. 16/11/07 vide which four FDRs bearing No. 165465 to 165468 Ex.PW29/B1 to B4 dtd. 03/07/02 in the name of A2 were seized. PW29 had also submitted the document Ex.PW29/D1 to D15 vide letter Ex.PW29/C. PW36 Sh. AK Deb proved the seizure memo dtd. 9/2/08 vide which statement of account of A/c No. 5231, 5461, 5599 and 5232 were seized vide seizure memo Ex.PW36/A. The documents so handed over were proved as Ex.PW36/B1 to B10.
PW38 Sh. Harinder Pal Singh proved the letter dtd. 14/7/05 as Ex.PW38/A vide which the documents relating to M/s Best Fit Apparels Pvt. Ltd., M/s Bhagwati Agencies, M/s Panchsheel Nursery were submitted to IO. CBI Vs. KC Aggarwal & Ors. CC No.01/13 Page 29 of 116 The witness also proved another letter dtd. 9/7/05 as Ex.PW38/B. The documents so handed over were proved as Ex.PW38/C1 to Ex.PW38/C21.
PW39 Sh. Gaurav Malhan proved the statement of account of Sh. Saurabh Aggarwal Ex.PW39/A and that of Sh. Apoorva Aggarwal as Ex.PW39/B which was handed over to CBI. The witness also proved another seizure memo dtd. 27/7/09 as Ex.PW39/C vide which the documents Ex.PW39/D2 to D35 were seized.
PW47 Sh. K. Ashok Kumar, Officer from Syndicate Bank proved the documents Ex.PW47/A1 to A17.
3.6 In respect of the vehicles, prosecution has claimed that vehicle No. DL3CS 1607 and DL2CZ 0941 was purchased by A1 during the check period. In this regard, the prosecution has examined PW8 Yaadram, PW11 Sh. BS Bharadwaj, PW13 Sh.NR Purthy, PW23 Sh.US Sahai and PW49 Sh. Anil Kumar.
PW8 Sh. Yaadram Singh proved the letter of National Insurance Company dtd. 15/6/07 whereby true copy of policy No. 6211142 for the insurance of Maruti WagonR car in the name of Sh. Pankaj Aggarwal alongwith confirmation of premium paid was handed over to IO. The policy for the period January 2003 to January 2004 was proved as Ex.PW8/B and the computer generated statement was proved as Ex.PW8/C. PW11 Sh. BS Bharadwaj proved the production cum seizure memo dtd. 12/6/07 vide which file in respect of car No. DL3CS 1607 CBI Vs. KC Aggarwal & Ors. CC No.01/13 Page 30 of 116 Ex.PW11/A was produced. The car was purchased on 02/02/01 for Rs. 6,53,701/ in the name of Sh. Pankaj Aggarwal. Since the car was stolen, a communication was received on 11/4/03 from National Insurance Company for the transfer of vehicle in the name of the insurance company.
PW13 Sh. NR Purthy proved the production cum seizure memo Ex.PW13/A vide which he handed over papers pertaining to theft claim of Car No. DL3CS 1607. The witness stated that insurance company settled the claim for Rs. 4,30,000/ and payment was made through cheque dtd. 7/5/03.
PW23 Sh. US Sahai proved the documents regarding purchase of vehicle No. DL3CS 1607 in the name of Sh. Pankaj Aggarwal as Ex.PW23/A. PW49 Sh. Anil Kumar handed over the shadow file ExPW49/A alongwith the documents of above said vehicle to IO.
Prosecution has also examined PW41 Prachur Goel who purchased the car No. DL2CZ 0941 from M/s Automart India Ltd. 3.7 The allegation of the prosecution is that A1 had been running the business in the name of M/s Bhagwati Agencies. M/s Bhagwati Agencies was a private limited company in which A3 Sheela Aggarwal was a Director. In order to prove the business of this company, prosecution examined 03 witnesses PW4 Sh. KM Paliwal, PW6 Sh. Pradiptam Sanyal and PW28 Sh. Sanjay Gupta.
CBI Vs. KC Aggarwal & Ors. CC No.01/13 Page 31 of 116
PW4 Sh. KM Paliwal proved the statement of account of M/s Bhagwati Agencies with Canara Bank bearing A/c No. GKCA000075276 for the period 17/5/03 to 29/8/07 as Ex.PW4/A. The certified copy of account opening form has been proved as Ex.PW4/B. The documents were forwarded to the CBI vide forwarding letter dtd. 29/8/07 Ex.PW4/C. PW6 Sh. Pradiptan Sanyal from State Bank of India proved the letter dtd. 12/9/07 vide which statement of account of current A/c No. 01050/880142 was produced. The statement of account for the period 29/5/03 to 5/10/06 has been proved as Ex.PW6/B. In the cross examination, the witness admitted that in statement of account Ex.PW6/B, there are number of transactions of cost of gold purchased from time to time.
PW28 Sh. Sanjay Gupta was a star witness of the prosecution. PW28 nephew of A3 deposed that A3 purchased the ownership of M/s Bhagwati Agencies and that the address of the firm originally was C118, East of Kailash and lateron it was shifted to Karol Bagh. On 5/6/03, the firm commenced a new gold business. PW28 stated that firm had rental income from Alipur Godown of Rs. 25,000/p.m. He also stated that firm had agricultural income. The witness stated that he used to receive a salary of Rs. 6,000/ per month till 2005. It came in the testimony of the witness that the account opened with Canara Bank was operated by A3 and Sh. BS Aggarwal. Another bank accounts were also opened in different banks. The witness stated that he received a cheque of Rs. 60 or 61 lakhs from A3 in the name of A2 and the same was deposited in Canara Bank, Barakhamba Road CBI Vs. KC Aggarwal & Ors. CC No.01/13 Page 32 of 116 and from this money he purchased 5 kg of gold from M/s PEC Ltd. and this gold was sold by him in open market in cash and this was his first business transaction in gold bar. The witness proved the production cum seizure memo dtd. 23/11/07 Ex.PW28/A vide which he produced the ledger of copy of account of Bhagwati Agencies Pvt. Ltd. pertaining to M/s Mohan & Company from 28/1/04 to 19/5/04 and copy of ledger account pertaining to M/s MDR Jewellers. The ledger account of Mohan and Co., for the period 1/4/03 to 31/3/04 was proved as Ex.PW28/B1 to B2. Perusal of this account would indicate that there was a debit balance of Rs. 88,21,430/. Similarly, the ledger account of M/s MDR Jewellers for the period 1/4/03 to 31/3/04 was proved as Ex.PW28/C1 to C11. Perusal of this would also indicate that as on 31/1/04 there was a debit balance of Rs. 40,05,045/. Some calculation on the bottom of it indicates the balance of Rs. 35,36,736/ as on that date. The witness also proved his handwritten communication dtd. 3/10/07 (Ex.PW28/D). He also identified his signatures as proprietor/ Manager of M/s JSR Overseas on Ex.PW28/E1 to E9. In the account of M/s JSR Overseas, there was a debit balance of Rs. 10,60,000/ against A2 Saraswati Devi and similarly, credit balance of Rs. 34,80,851/ against M/s Bhagwati Agencies as on 31/3/05. The witness also proved the letter Ex.PW28/F written by him to RG Verma, Chartered Accountant vide which he asked for the survey report submitted in the insurance company. He also proved the letter dtd. 3/1/05 addressed to Sh. RG Verma, Chartered Accountant as Ex.PW28/G. Vide this letter, the witness was requesting his Chartered CBI Vs. KC Aggarwal & Ors. CC No.01/13 Page 33 of 116 Accountant to submit final report to Oriental Bank of Commerce Ltd., pursuant to the filing of non traceable report by the police. The witness also proved the signature of A1 on Ex.PW28/B1 and Ex.PW28/B2 at point B. In the cross examination, the witness stated that he had seen the account of M/s Mohan & Co., and as per their account, they were not liable to pay M/s Bhagwati Agencies and the reason for variation in this account was on account of the fact that M/s Bhagwati Agencies had supplied 25 kg of gold to M/s Mohan and Co., and M/s Mohan and Company had given some cash prior to the supply but no receipt of this cash was given by M/s Bhagwati Agencies to M/s Mohan and Company. Nor this account was shown in the account of M/s Bhagwati Agencies. The witness also accepted the suggestion that M/s MDR Jewellers were also not liable to pay any amount to M/s Bhagwati Agencies and rather M/s MDR Jewellers were claiming a sum of Rs. 36 lakhs from M/s Bhagwati Agencies. The witness accepted the suggestion that M/s Mohan and Co., and M/s MDR Jewellers are associate firms operating from Jaipur. The witness stated that this variation of account took place on transaction of 25 kg of gold and if the price of gold prevailing at that time is taken into consideration it offsets both the aforesaid differences. A suggestion was given that the factual position was that the accounts were square and no party was liable to pay anything to anyone and the dispute is subjudiced. There was also some settlement between the parties before the arbitrator and same could not be acted upon due to tax liability. He accepted that M/s Preeti Mercantile Company had invested Rs. 50 lakhs in CBI Vs. KC Aggarwal & Ors. CC No.01/13 Page 34 of 116 M/s Bhagwati Agencies in July, 2004 and this is duly reflected in Ex.P55 at point X. The dispute regarding tax liability of this account also took place which was ultimately resolved by the order of Commissioner of Income Tax Ex.PW28/DA1 and this was also ultimately upheld by the Hon'ble High Court vide order dtd. 25/5/2011 Ex.PW28/DA2. The witness stated that his liability as reflected in document Ex.PW28/D was settled as he paid Rs. 20 lakhs in April 2005 and remaining amount of Rs. 14 lakhs in 2006. The witness stated that he was only liable to pay a sum of Rs. 10,57,000/ to A3 as on 31/3/05. In answer to a Court question, the witness stated that he does not maintain any personal account nor could he produce any document regarding payment to M/s Bhagwati Agencies or A2. The witness also admitted that he did not intimate income tax department about such transactions.
3.8 The accused persons had been dealing in shares in huge manner and one of the transactions vide which A2 received a sum of Rs. 51 lakhs approximately from M/s Ahilya Commercials Pvt. Ltd. has raised eyebrows. In respect of the share transactions and in particular to share transactions pertaining to M/s Continental Fiscal Management Ltd. the prosecution has examined PW1 Sh. Anupam Goel, PW7 Sh. KA Kulwal, PW32 Sh. Shyamalendu Shome, PW35 Sh. Amit Santra and PW44 Sh. Santosh Kumar Gupta.
CBI Vs. KC Aggarwal & Ors. CC No.01/13 Page 35 of 116
PW1 Sh. Anupam Goel proved the letter dtd. 1/9/07 of Regional Operation Head (North) ABN Amro Bank vide which the documents pertaining to account No. 901126 and 824008 in the name of Apoorva Aggarwal were submitted. The account opening form pertaining A/c No. 901126 in the name of A1 has been proved as Ex.PW1/B and certified copy of account opening form in the name of Apoorva Aggarwal as Ex.PW1/C. The statement of account of the aforesaid accounts have been proved as Ex.PW1/D and Ex.PW1/E. The witness proved another letter dtd. 8/7/05 vide which the documents pertaining to A/c No. 901126 and A/c No. 835838 in the name of M/s Bhagwati Agencies were submitted. The letter was proved as Ex.PW1/F. The statement of account were proved as Ex.PW1/G and Ex.PW1/H. He also proved the letter dtd. 1/7/05 as Ex.PW1/J vide which account opening form Ex.PW1/K of M/s Bhagwati Agencies was submitted. The witness proved another letter dtd. 27/8/07 as Ex.PW1/L vide which the documents pertaining to A/c No. 835838 in the name of Bhagwati Agencies were submitted. The statement of account was proved as Ex.PW1/M and details of directors as Ex.PW1/N. PW7 Sh. KA Kulwal was posted as Chief Manager in the shares department at the headquarters of State Bank of Bikaner and Jaipur. He proved 20 share certificates as Ex.PW7/A1 to A20. These shares were in the name of A1 and A2 as per the endorsement on the back side of each share certificate. The witness stated that the shares had face value of Rs. 100/ and were sold at a premium of Rs. 440/. Lateron these shares were split in shares CBI Vs. KC Aggarwal & Ors. CC No.01/13 Page 36 of 116 of Rs. 10/ each and the present market value was stated to be Rs. 503/ for the split share of Rs. 10/ each.
PW32 Sh. Shyamalendu Shome proved the communication of TSR Darashaw as Ex.PW32/A. The letter was in response to certain queries raised by CBI in regard to the shares of the company and the payment of dividend to A3. The shares in the name of A3 were also proved as Ex.PW32/B1 and B2.
PW35 Sh. Amit Santra was a star witness. He was Manager (surveillance), Calcutta Stock Exchange. The witness proved the letter dtd. 05/02/08 received from CBI as Ex.PW35/A. In this letter details of transactions in stock of M/s Continental Fiscal Management Ltd. that took place through the exchange during the period 11/3/03 to 11/3/05 alongwith record pertaining to transaction of 42,000/ shares in the name of A2 on 12/6/03 were sought. The record pertaining to transaction of sale of these shares on 24/3/05 by M/s Ahilya Commercials Pvt. Ltd. were also sought. The witness proved the letter dtd. 7/2/08 of the Calcutta Stock Exchange Association as Ex.PW35/B. In this reply, the details of transactions in shares of M/s Continental Fiscal Management Ltd. executed in the online trading system for the period 31/3/03 to 31/3/05 was submitted. The stock exchange replied that it appeared from the record of the exchange that no trade was executed in the shares of M/s Continental Fiscal Management Ltd on 12/6/03 in the online trading system of the exchange. However, the detail of transactions in the share of M/s Continental Fiscal Management Ltd. CBI Vs. KC Aggarwal & Ors. CC No.01/13 Page 37 of 116 executed by M/s Ahilya Commercials Pvt. Ltd. on 24/3/05 was furnished. The stock exchange informed that particulars of distinctive number of shares regarding transaction dtd. 12/6/03 was not available. However, it was informed that transaction on 24/3/05 was executed in Dmat form and hence, there cannot be any distinctive number. The communication informed that Exchange shares of M/s Continental Fiscal Management Ltd. were transferred to Compulsorily Rolling Segment w.e.f. 29/3/01 and as per SEBI Regulations, the shares of the company cannot be transacted in physical form for quantities more than 500 shares after 29/3/01. The witness also proved another letter dtd. 8/2/08 of Calcutta Stock Exchange as Ex.PW35/C. This was regarding the sales executed on 24/3/05 by M/s Ahilya Commercials Pvt. Ltd. The stock exchange also forwarded order of SEBI dtd. 30/9/05 Ex.PW35/E against M/s Ahilya Commercials Pvt. Ltd. vide their letter dtd. 12/02/08 Ex.PW35/D. The witness stated that suspension of M/s Ahilya Commercials Pvt. Ltd., had nothing to do with the transaction of the present case. The sale transactions carried out on 24/3/05 by M/s Ahilya Commercials Pvt. Ltd. for and on behalf of A2 was genuine and no part of it was fake. In the cross examination, the witness admitted that there was no apprehension regarding open market transaction and the off market transactions are not reflected in exchange platform. However, the witness voluntarily stated that generally off market transactions are not genuine transactions and the investigation into such transactions are generally carried out. He admitted that in the present case, no investigation was carried out and CBI Vs. KC Aggarwal & Ors. CC No.01/13 Page 38 of 116 therefore, he cannot say whether the same was genuine or not. In a specific question that whether the broker in order to honour his commitment with the client transfer shares to the client in DMAT form either after the purchase of physical share and getting them converted it into DMAT or from his own holding of shares of concerned company. The witness replied that the broker is only an intermediate between the buyer and the seller and he cannot convert the shares from physical form to DMAT form or vice versa. He also stated that the broker cannot transfer his own holding of the same company to the buyer only in order to honour his commitment. The witness stated that in the off market transactions there are two prerequisite - that there should be movement of shares from seller to buyer and movement of funds from buyer to seller.
PW44 Sh. Santosh Kumar Gupta, Director, M/s Continental Fiscal Management Ltd., proved that pursuant to the letter dtd. 5/2/08 Ex.PW44/A, he forwarded the information vide letter dtd. 8/2/08 Ex.PW44/B. In this letter it was informed that as per information available with them, there was no share holder in the name of A2 having her address as C118, East of Kailash to whom the shares of company had been allotted directly in physical or Dmat form. The company further informed that as far as Dmat form is concerned, they have checked with their company registrar and transfer agent M/s Nicht Technology Pvt. Ltd. and found that A2 did not have any share as on March, 2003. The company also informed that they had issued shares in the year 1996 at a face value of Rs. 10/ and thereafter, at a CBI Vs. KC Aggarwal & Ors. CC No.01/13 Page 39 of 116 face value of Rs.10/ with a premium of Rs. 40/ in the year 2004. The company also informed vide letter Ex.PW44/C that they had not allotted any share to Raj Kishore Routh. The witness also proved the copy of Form No. 32 as Ex.PW44/D1 to D3. In the cross examination, the witness admitted that in his letter Ex.PW44/D, he has given the position of shares only upto February 2005. He admitted that as per information received from M/s Nicht Technology, A2 was holding 42,000 shares of M/s CFML between 11/3/05 to 18/3/05 and shares were disposed of after 25/3/05 and 31/5/05 in DP ID IN 301782 with M/s Nam Securities Ltd. vide document Ex.PW42/DA. The witness also admitted that as per rough estimate 60% 70% holding of the company is in Dmat shares and the rest are still in physical form. He also admitted that untill and unless the shares are sent to the company for transfer, he cannot know who is buying the shares and who is selling the shares. The company is concerned with the transferor and transferee and are not concerned with the off market deals.
In regard to the share transactions, prosecution has also examined PW2 Sh. Cordell Ashley Payne. He was the Branch Manager, HDFC Bank, Kolkatta. The witness proved the seizure memo dtd. 6/2/08 Ex.PW2/A whereby the certified copy of statement of account in the name of M/s Ahilya Commercials Pvt. Ltd. and others were seized. The certified copy of statement of account of M/s Ahilya Commercials Pvt. Ltd. running into 45 sheets has been proved as Ex.PW2/A1. The witness also proved another seizure memo dtd. 8/2/08 Ex.PW2/B vide which certified copies of cheques CBI Vs. KC Aggarwal & Ors. CC No.01/13 Page 40 of 116 and certain vouchers alongwith statement of accounts of one Sh. Manmohan Damani was seized. Another seizure memo dtd. 9/2/08 was proved as Ex.PW2/C whereby the certified copy of account opening form of M/s Ahilya Commercials Pvt. Ltd. was seized.
3.9 In regard to the insurance premiums, the prosecution has examined PW16 Sh. Shivanand Jha, PW17Sh. Narender Kumar, PW18 Sh. Shanti Lal Yadav, PW22 Sh. Irfan Khan, PW30 Sh. Anubhav Rikhi and PW37 Sh. Vivekanand Jha.
PW16 Sh. Shivanand Jha was a witness in regard to the policy in the name of A1. Since it has not been disputed, there is no benefit of its discussion.
PW17 Sh. Narender Kumar was also a witness regarding the LIC policy in the name of A3.
PW18 Sh. Shanti Lal Yadav also proved LIC policy in the name of A1 and A3.
PW22 Sh. Irfan Khan proved the ICICI policy details of A3. PW30 Sh. Anubhav Rikhi deposed regarding Aviva Life Insurance Policy in the name of A3.
PW37 Sh. Vivekanand Jha was also a witness in regard to the LIC policy in the name of A1 and his sons.
CBI Vs. KC Aggarwal & Ors. CC No.01/13 Page 41 of 116 3.10 In regard to the educational expenses of the children of A1 and A3, prosecution has examined PW26 Sh. Nirmalchand Rana, PW31 Sh. Barthlomew Xalxo, PW42 Sh. Kalyan Kumar Bhattacharjee and PW43 Sh. Surender Kumar Saini. These witnesses proved the educational expenses of the children of A1 and A3. The factum of these expenses have not been disputed. The only dispute is that whether these amounts were paid by A1 out of his own pocket or the same were paid by A3 or were met out of the gift or earnings of the children.
3.11 In regard to the mobile expenses of A1, prosecution has examined PW25 Col. AK Sachdeva. This has not been disputed by the accused and is not being discussed further.
3.12 The purchase of Whirlpool Magicool150EL AC and a Blue Bird Voltage Stabilizer by Sh. Apoorva Aggarwal have been proved by PW27 Sh. Aviral Thareja.
3.13 Besides these, the prosecution has examined PW20 Sh. Mohinder Singh Kathuria. He deposed regarding some discussion between him and A1 regarding the sale of his factory, the deal of which did not materialise.
CBI Vs. KC Aggarwal & Ors. CC No.01/13 Page 42 of 116 3.14 In respect of the transaction with M/s Infocomm Digital System, the prosecution examined PW21 Sh. Shyam Lal Rastogi. However, there is no use of discussion of this witness as the testimony of this witness remained incomplete as earlier the cross examination was deferred and subsequently, the witness could not appear having died.
In respect of this transaction, prosecution has also examined PW24 Sh. Madan Lal Grover. He proved the document Ex.PW24/A. This was a contract of sale between M/s Infocomm Digital System and A3. The witness stated that this document was submitted in his bank in the official course of business.
3.15 Prosecution examined PW34 Smt. Alka Jain who proved the transaction between DMC Plantations and A3 dtd. 21/8/96 regarding plot No. A15.
3.16 PW40 Anuj Aggarwal proved the lease agreement between M/s LM Prem & Co. Pvt. Ltd. and M/s Bhagwati Agencies regarding lease of premises No. LG17, LG18, LG19, LG27 and LG28 as Ex.PW40/A. He also stated that a sum of Rs. 69,426.35 was received from M/s Bhagwati Agencies.
3.17 In the category of CBI witnesses, the prosecution has examined PW48 DSP Mridula Shukla. She had conducted the search at the office CBI Vs. KC Aggarwal & Ors. CC No.01/13 Page 43 of 116 premises of A1 alongwith two independent witnesses. The search list was proved as Ex.PW48/A. PW50 SI Praveen Ahlawat had taken part in search proceedings and proved the search cum observation memo as Ex.PW50/A. The search was conducted at the house of Sh. Apoorva Aggarwal. Another search was conducted on the same day regarding which the search memo Ex.PW50/B was prepared.
PW51 Inspt. CK Sharma deposed that he was entrusted the investigation of this case and proved the carbon copy of FIR as Ex.PW51/A. He stated that the premises of A1 was searched on 30/6/05 and proved the search cum seizure memo as Ex.PW51/B. The observation memo Ex.PW51/C was proved. He stated that during the course of house search total cash in the sum of Rs. 7,77,280/ was recovered. The jewellery recovered was duly valued. The total valuation was assessed as Rs. 8,38,687/. IO stated that he collected documents and duly seized the same. The different seizure memos were proved as Ex.PW51/D1 to Ex.PW51/K10. IO stated that during investigation accused was found in possession of 09 immovable properties. The investigation revealed that most of the assets were acquired after 1991 and therefore, the check period was fixed from 1/1/91 to 30/6/05. Accused was also found in possession of 03 immovable properties other than 09 immovable properties, but since these were acquired before the check period, they were not taken into account. IO stated that accused had paid a sum of Rs. 20 lakhs to Infocom Digital System Ltd., CBI Vs. KC Aggarwal & Ors. CC No.01/13 Page 44 of 116 however, the property was not transferred in the name of A1 and the money of the accused in the sum of Rs. 20 lakhs remained with Infocom Digital System Ltd. and in this regard accused had also filed a civil suit which was pending disposal. IO also deposed regarding the transaction of property with PW5 and PW33. Inspt. CK Sharma stated that during investigation the plea of the accused was that the sum of Rs. 50 lakhs for the purpose of making two DD's of Rs. 25 lakhs each was arranged by sale of shares in the name of A2. However, no such share was sold and the source of Rs. 50 lakhs could not be explained. Sh. Sanjay Gupta who was the employer of accused in the business of sale and purchase of gold suffered some loss and started operating through his own company M/s JSR. The account book of this company also revealed that M/s JSR was liable to pay a sum of Rs. 31 lakhs to M/s Bhagwati Agencies and Rs. 10 lakhs to A2. IO also stated that M/s MDR Jewellers and M/s Mohan & Co. were also liable to pay a sum of Rs. 85,75,000/ to M/s Bhagwati Agencies. IO stated that it did not surface during the investigation that A1 was exonerated while sever strictures were made in complaint No. 38/96 against Mr. Sagar inquired by ACB Delhi and in the second complaint regarding alleged DA on source information from CVC was also closed with concurrence of CVC. In the cross examination, the IO stated that he did not remember whether he had seen or considered the balance sheets or income tax returns or income tax assessment orders of Bhagwati Sales Agencies till 2005 during the course of investigation. IO denied that all such documents were available to him but he deliberately did CBI Vs. KC Aggarwal & Ors. CC No.01/13 Page 45 of 116 not consider the same. IO admitted that Ex.PW51/DA1 to 6 are the certified true copy of ITRs of M/s Bhagwati Agencies for AY 200102 to 200607. He also admitted that Ex.PW51/DB is certified true copy of appellate order in regard to the AY 20052006 of Bhagwati Agencies. IO stated that he had no knowledge about final report dtd. 7/4/98 Ex.PW51/DC submitted by Anti Corruption Branch. IO admitted that a sum of Rs. 4,56,832 at S. No. 32 and 45 in the asset of A2 acquired during the check period has inadvertently been taken twice. IO was not able to say the exact number of shares found to have been in the name of A1, A2 and A3. IO had taken a sum 4,56,832/ on the basis of affidavits Ex.PW51/DD submitted by A1. IO also admitted that he had not taken into account, the dividend on profit earned on such shares. IO admitted to have received a communication dtd. 7/3/06, 1711/07 and 28/1/08 Ex.PW51/DE , Ex. PW51/DF and Ex.PW51/DG. However, he stated that he had not come across four annexures and the final report E.PW51/DH as well as the enquiry report u/S 55 of Delhi Cooperative Society Act, 1972, Ex.PW51/DJ during the course of investigation. IO denied the suggestion that he has wrongly clubbed the income and assets of M/s Bhagwati Agencies as well as of Smt. Saraswati Aggarwal who were separate entities. Similarly, income, expenditure and assets of KC Aggarwal HUF were wrongly added to jack up the DA. IO admitted that he did not get any direct evidence to show that money was paid by A1 to purchase the Kanjhawala Land in the name of children of A1 and A3. IO stated that he did not come across any evidence during the investigation, which could show that CBI Vs. KC Aggarwal & Ors. CC No.01/13 Page 46 of 116 Apoorva Aggarwal, Pankaj Aggarwal had any source of income which could enable them to purchase this property. IO admitted that he had come to know during investigation that Apoorva Aggarwal, Pankaj Aggarwal and Saurabh Aggarwal had been filing their separate ITRs but he did not get any material that these children had any independent source of income. IO admitted that he did not file any complaint to Income Tax authorities that false ITRs have been filed. IO also admitted that he did not come across anything during investigation that these ITRs had been rejected by the Income Tax department. IO expressed his ignorance that M/s Preeti Mercantile had invested Rs. 50 lakhs with M/s Bhagwati Agencies. He also expressed his ignorance of this issue having been settled by the Hon'ble High Court.
IO admitted that late Sh. LN Aggarwal, husband of A2, got A2 entered into a partnership to carry out business of export and late Sh. LN Aggarwal was to make available the export orders and in consideration thereof, A2 was to receive 60% of the profits. He also admitted the partnership deed dtd. 1/4/08 Ex.P75 having been submitted by Sh. Amitabh Sharma during the investigation. IO admitted that there is no specific letter on record whereby the department had rejected the request of A1 regarding the receipt of gift in the sum of Rs. 45 lakhs. He also admitted that there are several entries in the account of M/s Grow More Inc No. CA 2111 in Bank of Madura Ltd. regarding receipt of money in US Dollars for the period April 98 to March 99, which total up to Rs. 1 crore. In respect of the entries of M/s Mohan & Co., and M/s MDR Jewellers, IO stated that he did not see the CBI Vs. KC Aggarwal & Ors. CC No.01/13 Page 47 of 116 books of accounts of M/s Mohan & Co., and M/s MDR Jewellers. Perusal of the cross examination of IO would indicate that entire defence was put to him. However, he expressed his ignorance regarding most of them and put denial on record to the remainder. IO stated that he did not make any further investigation on the affidavit furnished by A1 on the basis of which he had taken value of shares. Nor did he make any investigation as to the date and source of acquisition of such shares. IO stated that he did not know during investigation that A2 was an income tax assessee. In regard to the income tax returns filed by A2, IO remained evasive. Similar was his response in regard to the income tax returns filed by A3. During the cross examination, the income tax returns of A1, A2 and A3, Apoorva Aggarwal, Pankaj Aggarwal and Saurabh Aggarwal as well as KC Aggarwal HUF were duly furnished. There were certain typographical mistakes in the cross examination dtd. 3/8/2013 which were duly corrected in terms of order dtd. 7/8/2013 and was placed on record.
3.18 PW52 Sh. Jitender Kumar Singh proved the letter dtd. 23/9/09 as Ex.PW52/A vide which sanction order of the competent authority for prosecution against A1 u/S 19 of the POC Act was forwarded. The sanction was also proved as Ex.PW52/B. The witness stated that after receiving the request from CBI, the case was processed and after taking the approval of the competent authority, the matter was referred to CVC and after obtaining the advise of CVC, the file was further submitted to the CBI Vs. KC Aggarwal & Ors. CC No.01/13 Page 48 of 116 competent authority and thereafter, the sanction for prosecution was granted by Minister of State, Ministry of Home in the name of President of India. The witness stated that the competent authority was President of India and under Transaction of Business rules, the power has been delegated to the Ministry of Home Affairs who has further directed it to MOS (Home). He has stated that MoS Home is the appropriate authority in respect of all the officers/ officials of Union Territory except IAS and IPS. The relevant order dtd. 22.12.08 and 15/6/09 were also proved as Ex.PW52/DA and Ex.PW52/DB. The witness denied the suggestion that even under this order MOS (Home) has not been conferred power to grant the sanction. The witness proved the notification Ex.PW52/DC dtd. 16/2/2012 vide which desk officer has been authorized to authenticate the signatures.
3.19 PW53 Sh. Sunil Goel was the witness in regard to K114, Sheikh Sarai. However, this property since has not been taken in DA, it is no purpose of making any discussion over this.
4.0 A1 KC Aggarwal in his statement u/S. 313 Cr.PC denied the incriminating evidence. It is submitted that A2 and A3 are the separate entity and had been filing ITR since long. He further submitted that his name has been added in the bank account along with A2 only for the convenience to operate the account. In respect of income, A1 stated that his entire income from other source including honorarium has not been taken into CBI Vs. KC Aggarwal & Ors. CC No.01/13 Page 49 of 116 consideration. In regard to shares of State Bank of Bikaner & Jaipur, A1 submitted that it belongs to his mother A2 and his name has been added only as a matter of convenience. In regard to the LIC policy no. 110186609, A1 stated that he is karta of HUF and the premiums were paid from the HUF account. In respect of A3 the accused stated that she is an independent person and is regularly filing ITR and even paying income tax. A1 stated that he has nothing to do with the transactions carried out by A2 & A3. In regard to the education expenses of his sons, A1 stated that his sons had their own resources to meet the educational expenses. They were filing ITRs regularly after becoming major and prior to it their income was being clubbed with their mother i.e. A3. In respect to M/s BAPL, A1 stated that it is an independent entity and he has nothing to do with the transactions of the same. A1 stated that he personally had no dealing with M/s ACPL or in share of M/s CFML. A1 stated that he did help his old aged mother, coaccused Smt. Saraswati Devi Aggarwal i.e. A2. A1 stated that transaction dated 12.06.2003 was an offmarket purchase by M/s ACPL and was never claimed to be through online system of stock exchange. It was submitted that exchange is not in a position to explain offline transaction as the same are not recorded in the stock exchange and this is also confirmed in the letter Ex.PW35/B. In respect of recovery of cash from during the house search on 30.06.2005, A1 stated that a sum of Rs.1,84,000/ was shagun which was received in the marriage of Pankaj Aggarwal. The marriage took place on 28.06.2005. The cash of Rs.5,93,280/ in fact belonged to M/s BAPL. M/s CBI Vs. KC Aggarwal & Ors. CC No.01/13 Page 50 of 116 BAPL had withdrawn cash of Rs.13,80,000/ from HDFC Bank A/c on 31.03.2005 vide cheque no. 0575837 as reflected in Ex.P31. Accused has stated that foreign currency belonged to his son Pankaj Aggarwal, who was employed in IBN Global Services Pvt. Ltd. He was issued in US$ 18,000/ in three trenches of US$ 6,000/ each in October, 2003, March, 2004 and October, 2004 by his employers. In respect to the property at Village Chirkhana, Subtehsil Bahadurpur, Tehsil Alwar, Rajasthan in the name of A3 Smt. Sheela Aggarwal, the accused stated that this property belonged to A3 which she acquired in her own name in her own right and out of her own funds as distinct from his funds. The accused placed reliance upon ITR of A3 Ex.PW51/DK. In regard to renovation expenses of C118, East of Kailash, A1 stated that after the purchase of the house, only a sum of Rs.1,95,000/ were spent on the renovation and remaining renovation was carried out by the sellers. In regard to the purchase value of C118, East of Kailash, A1 stated that cash amount of Rs.9,00,000/ was paid by his father Late Sh. L. N. Aggarwal and the remaining payment of Rs.25,00,000/ were paid by A3 from her own account as reflected in page 36 Ex.PW51/DK. The drafts were made from account 1507 of ICICI Bank of A3 Smt. Sheela Aggarwal. This account was duly reported to income tax authorities. A1 stated that he had contributed a sum of Rs.34,000/ as broker's commission towards C118, East of Kailash and this was duly reflected by him in his ITR (page 38 Ex.PW51/DS). A1 also stated that he had duly intimated this transaction under conduct rules as reflected in prosecution documents Ex.P69 (D125). CBI Vs. KC Aggarwal & Ors. CC No.01/13 Page 51 of 116
In regard to the share holdings A1 stated that the shares exclusively in his name belonged to him and have been duly reported under conduct rules wherever required and also accounted under income tax and the shares in joint name with A2, belongs to A2 and his name i.e. A1 has been added only as a matter of convenience. The other shares belonging to respective persons and entities have been acquired by them out of their own funds and duly accounted under income tax independently and separately from him. A1 also stated that CBI has not taken any income into consideration on account of dividend and purchase of shares. Approximately an income of Rs.116 lacs has been concealed by CBI which is evident from documents available on record as Ex.PW51/DK to Ex.PW51/DX6 and these facts have duly been explained in affidavit Ex.P16. In respect of sanction of loan against securities for a sum of Rs.1,00,00,000/ on 14.03.2003 by ICICI Bank against Govt. of India bonds and ICICI Bank bonds, A1 stated that in fact the loan was taken by coaccused A2 and his name was added to facilitate loan on basis of his securities. The loan was duly been accounted for by A2 in her ITR. The ICICI Bank bonds held by A2 have also been duly accounted in income tax. The accused also stated that as per Ex.P58 (D107) the bonds stood matured on 18.11.2004 with credit of Rs.51,67,000/. In regard to the sale of 20,000 shares of M/s CFML (Ex.P71) by A2 on 24.03.2005, the accused stated that it was the matter pertaining to part of purchase of shares sold by A2. A1 stated that the shares were sold through Kolkata Stock Exchange and, therefore, there was no contact with the buyer. CBI Vs. KC Aggarwal & Ors. CC No.01/13 Page 52 of 116 The response was in respect of transaction with M/s Toplink Tradelink (Pvt.) Ltd. and M/s Topgrain Vyapaar Pvt. Ltd. A1 stated that the share of M/s CFML were purchased for A2 as offmarket transaction on 12.06.2003 and the shares were transferred in demat form to her demat account on 14.03.2005. A1 stated that he has been falsely implicated and the witnesses have deposed under pressure of the CBI.
4.1 A2 Saraswati Devi Aggarwal in her statement u/S. 313 Cr.PC deposed that she had purchased the shares of State Bank of Bikaner & Jaipur at the prevailing market price and the name of A1 was added as a matter of convenience. The transactions were duly shown in ITR. The dividend earned in these shares have also been shown in her ITRs. In respect of transaction of Gurgaon property, the accused stated that deal was for Rs.1,00,00,000/ and for which a loan of Rs.88,00,000/ was got sanctioned from ICICI Bank, however, the deal did not materialize on account of some dispute. In respect of transaction as stated by PW20, A2 stated that after the death of her husband, she wanted to invest her savings and capital including stridhan in rent earning property and PW20 agreed to sell his property for Rs. 93,00,000/ initially, however, later on PW20 stated that he would first settle his dispute with excise/custom authorities. A2 stated that A1 had acted on her behalf and he had nothing to do with the transactions. In respect of the loan to PW28 as reflected in Ex.PW28/D, A2 stated that PW28 had taken a loan of Rs.40,00,000/ from her out of which he returned Rs.30,00,000/ prior to CBI Vs. KC Aggarwal & Ors. CC No.01/13 Page 53 of 116 31.03.2005 and Rs.10,00,000/ in April, 2005. A2 stated that as on 30.06.2005 only the interest amount of Rs.67,000/ was due. In respect of ban order of M/s ACPL, A2 stated that this ban order was issued after the check period, it did not apply to M/s ACPL during the period when she completed her transaction in the shares of M/s CFML. A2 stated that ban order did not apply/pertain to or questions any transaction in the share of M/s CFML including her transaction nor did it apply to any of her transactions at Kolkata Stock Exchange. A2 stated that the record of share holding as on March, 2003 / June 2003 to February, 2005 was misleading. IO deliberately did not bring before the Court the share holding details of March, 2005. A2 stated that she was shareholder of M/s CFML from 14.03.2005 to 24.03.2005 in the records of the company because the shares of M/s CFML were purchased by M/s ACPL as an offmarket transaction on 12.06.2003, but the shares were transferred in demat form to her demat account no. 10012266 with M/s Nam Securities Limited with DP ID No. 301782 on 14.03.2005. The shares were sold on 24.03.2005 on the online system of Kolkata Stock Exchange through M/s ACPL, therefore, company record as on March, 2003 / June, 2003 to February, 2005 cannot speak of her shareholding in the company. In respect of gift of Rs.45,00,000/ to A1, A2 stated that she had gifted this amount out of the funds received by her as profit from M/s Growmore Connections Inc. The said profit of Rs.55,43,543.94 had been duly accounted in her ITR available at page 1 of Ex.PW51/DX and this has been accepted as tax free export profit by income tax authorities as per CBI Vs. KC Aggarwal & Ors. CC No.01/13 Page 54 of 116 assessment order available at page 3 of Ex.PW51/DX. A2 stated that IO wanted to frame her son A1 in false and illegal cases and, therefore, he implicated her also falsely. A2 also made certain additional submissions in her statement u/S. 313 Cr.PC, which are as follows:
"i) All properties, moveable or immoveable, in my name belonged to me and not to Mr. K.C. Agarwal or anyone else. I have accounted all my assets and transactions under income tax. Prior to his death, my late husband Mr. Lakshmi Narayn Agarwal used to look after my tax and other matters. After his death, the tax matters are looked after by Mr. K.C. Agarwal. However, all my assets continued to belong to me and I have every right and entitlement to gift, bequeath or use them as per my own desire and decision. In particular, the addition of name of any of my son in my accounts or securities, do not make them automatically any owner or part owner thereof.
ii) In my bank accounts at Delhi, the name of Mr. K.C. Agarwal has been added for convenience. Similarly, in my bank account at Jaipur, the name of my elder son has been added for convenience.
The bank accounts, however, belonged to me and transactions therein have been duly accounted for in income tax.
iii) My late husband Shri Lakshmi Narayn Agarwal was very meticulous in compliance with law and maintenance of records. My income tax returns have been filed long before. Mr. K.C. Agarwal came to service or was born. However, after the said demise of my late husband, we could not trace all the records despite exploring all possible sources. My late husband expired in April 1998. The Chartered Accountant, who was handling my matters till the death of my late husband, could provide only the original acknowledgment of my last income tax return filed for the period immediately before and the first income tax return filed for the period immediately after the death of my late husband. However, copies of some of the records could be found which show that even raids and scrutiny under income tax could not reveal anything adverse and that I was one of those persons who not only filed Income Tax Returns but was also assessed under wealth tax. Ours is traditionally a well to do family. I have been holding properties much prior to joining of service by Mr. K.C. Agarwal. Incidentally the original papers of one such property, CBI Vs. KC Aggarwal & Ors. CC No.01/13 Page 55 of 116 although already sold long ago, could be traced now while tracing other papers. The property stands sold long ago during the life time of my husband. Perhaps this document could not be delivered to the concerned buyer. It is submitted for kind perusal of this honourable court.
iv) It is unfortunate that when I am on verge of my life and waiting for death and despite of all records and accounts, this false case has been slapped against me as a reward for my son's honesty.
v) I have gifted a sum of Rs. 45,00,000/ to my son Mr. K.C. Agarwal as per Law and from my assessed income and accounted wealth. I have also given gifts to other sons and daughtersinlaws at various point of time. In the assessment year 200506 I have gifted a sum of Rs. 11,50,000 to my eldest son Mr. Ghanshyam Agarwal which is duly reflected in my income tax returns which can be verified from my statement of affairs filed with income tax return for AY 200506. A copy of the same is submitted for perusal.
vi) In the ICICI Bank, the loan taken in account No. 002905001572 belongs to me and has been duly shown in my income tax on year to year basis.
vii) After the death of my husband I wanted to buy some rent bearing property and accordingly a deal was finalized with Mr. M.S. Kathuria (PW20 in the present case) but the same cannot be brought to fruition till date as he started insisting on company transfer after settling his custom/excise disputes which is yet to happen. He appears to have gone dishonest.
viii) Thereafter I wanted to buy some property for my grand children i.e. the children of Mr. K. C. Agarwal. This was the deal with Mr. Mahesh Sharda (PW5) and Mr. Sanjay Bansal (PW33)."
The accused also produced certain documents for consideration of the Court:
"i)My original property registry regarding property (6 sheets).
(ii) Forwarding letter of the Chartered Accountant Mr. Bhawani Shankar Sharma (1 sheet)
(iii) Information provided by National Securities Depositories Limited regarding holding of my shares of Continental Fiscal Management Limited in dematted form. (2 sheets) CBI Vs. KC Aggarwal & Ors. CC No.01/13 Page 56 of 116
(iv) My statement of demat account No. 10012266 with M/s Nam Securities Limited (DP ID IN 301782) for the period 01.04.2004 to
31.03.2005.
(v) Old income tax documents which could be traced.(14 sheets)
(vi) Copy of statement of affairs for AY 200506 as filed along with the income tax return for relevant period. (1 sheet)
(vii) Copies of export documents of Growmore Connections Inc for AY 19992000
1. Form No17 sheets
2. Bank account statementUnion Bank of India13 sheets
3. Certificate of Inward Remittance of Bank of Madura13 sheets
4. Union Bank of India letter dated 01.02.2000 regarding overdue export bill along with enclosures - 2 sheets
5. Application for permission to obtain extension for realization of export proceeds - 2 sheets
6. Growmore letter dated 30.05.2000 in reply to Union Bank of India letter dated 18.05.2000 1 sheet
7. Certificate of Inward Remittance of Union Bank of India5 sheets
8. Foreign Exchange credit advice of Union Bank of India13 sheets
9. Copy of ICICI Bank Ltd. Loan Sanction order dated 31.03.2005 for Rs.88 Lakhs for the Gurgaon property.
(viii). Copy of ICICI Bank Ltd. Loan Sanction order dated 31.03.2005 for Rs.88 Lakhs for the Gurgaon property. "
4.2 A3 Sheela Aggarwal in her statement u/S. 313 Cr.PC deposed that M/s BAPL is owned by her. M/s BAPL files its ITR as a legal person. In respect of income of children, A3 stated that they are independent person and filing their ITR separately after becoming major, prior to that their income was clubbed with her for tax purposes. In respect of property at Kalu Sarai, A3 stated that it pertains to her company M/s SMPL which is a separate and independent legal person and filed ITR as per law. In respect of investment CBI Vs. KC Aggarwal & Ors. CC No.01/13 Page 57 of 116 made by A1 in the sum of Rs.20,00,000/ vide cheque in share application in her name i.e. A3, the accused stated that all the investments in her name was from her own resources and they are duly accounted in income tax and her husband has nothing to do with the same. In respect of the money paid to PW28 Sanjay Gupta, A3 stated that A2 Smt. Saraswati Devi Aggarwal had taken loan from ICICI Bank in account no. 1572 and out of this account cheque was given to PW28 to operate the business of gold in the name & style of M/s BAPL. A3 stated that the accounts of M/s BAPL were maintained by PW28 and information given to her was that neither M/s BAPL is entitled to receive any amount from M/s Mohan & Co. and M/s MDR Jewelers nor they are entitled to receive any amount from M/s BAPL. She further stated that a dispute took place between the parties and the business was stopped in May, 2004. The incomplete books of account were seized. A3 denied that PW28 had to pay a sum of Rs.31,00,000/ plus interest of Rs.3,01,851/ as on 30.06.2005. A3 stated that a sum of Rs.20,00,000/ was paid in April, 2003 and only a sum of Rs.11,00,000/ as principle amount remained outstanding apart from interest of Rs.3,01,851/ as on 30.06.2005. The remaining amount was paid by cheque in 2006. In respect of recovery of cash, A3 reiterated that this was part of the cash withdrawn by her from the account of M/s BAPL vide cheque no. 575837 on 31.03.2005. In respect of jewellery assets of Rs.8,38,687/, A3 stated that the jewellery pertained to precheck period. A3 stated that she inherited 467 gm from her maternal grandmother and also paid estate duty thereon. A3 also stated that CBI Vs. KC Aggarwal & Ors. CC No.01/13 Page 58 of 116 she got jewellery in her marriage from her parents and brothers and from her inlaws. A3 also got jewellery as gift at the time of birth of her three sons in 1978, 1979 and 1982. A3 stated that she belonged to a family of jewellers and got the jewellery remade from time to time. In respect of Tikri Kalan property, A3 stated that this was acquired by her before check period from her own funds as reflected in ITR Ex.PW51/DK. A3 stated that the cost of construction assessed at Rs.1,44,000/ is correct. Market value assessed vide order dated 02.08.2000 makes an assessment of rateable value w.e.f. 01.03.1999 which has no relevance to calculations for DA purpose. In respect of C118, East of Kailash, A3 reiterated that she had paid Rs. 25,00,000/ from her own resources and the same was duly declared and intimated in the income tax department. A3 stated that M/s BAPL is an independent company and it filed ITR separately on annual basis. The said account has also entries relating to the investment of Rs.50,00,000/ by M/s Priti Mercantile Company Limited and these investments have duly been upheld by the Commissioner, Income Tax and Hon'ble High Court of Delhi as reflected in Ex.PW28/DA1 and Ex.PW28/DA2. A3 stated that this is a false case and she has been implicated falsely for the following reasons:
"(i) The I.O. wanted to implicate my husband in false case. No such case was made out against him and, therefore, the IO added our assets without adding our income to make false case against us.
(ii) I am not repeating the facts which my husband has narrated for sake of brevity and also because I do not know as much details.
(iii) I have my independent source of income even prior to my marriage with Mr. K.C. Agarwal. The family of my inlaws is very particular in compliance of law and tax matters. After my marriage, CBI Vs. KC Aggarwal & Ors. CC No.01/13 Page 59 of 116 my late fatherinlaw got ITRs filed by me at Guwahati. Even prior to joining DANICS by Mr. K.C. Agarwal, my independent returns were being filed from Guwahati from where my late fatherinlaw was managing his diversified business. Before transfer of my tax file to Delhi, the tax matters continued to be managed from Guwahati with the help of my late fatherinlaw till few years after the joining of DANICS by Mr. K.C. Agarwal.
(iv) My minor sons also got gifts from my inlaws and other relatives which were consolidated and invested in the business of late my fatherinlaw. This corpus of funds grew gradually with accretion of interest. The income of my sons was clubbed together with my income for tax purposes till they became major. After that they are filing their income tax returns independently. My sons also got handsome out of pocket expenses from my late fatherinlaw whenever he used to visit us or we used to visit him which gave adequate savings for depositing school fee. Even otherwise the school fee and educational expenses of my children was modest and not substantial because everywhere they got admissions as per their merit. Even from the kitchen expenses, I used to save money & utilized the same for their educational expenses/needs.
(v) My three sons started earning very early and even made money from tuitions for which they independently filed income tax returns.
My sons also acquired good amount of knowledge about shares and helped me also in making investment which gave me decent profits. I accounted all such dividends and profits under income tax.
(vi) I came from a family of jewelers. I got 476 grams of jewelry from my maternal grandmother by way of her Will. I also paid Estate Duty over the same. The copy of Estate Duty Assessment Order and original tax demand notice is available at page 43 and 44of EX.PW51/DL/. I also got jewelry in gift at the time of my marriage from my inlaws as well as from my parents and brothers. I also get jewelry in gift at the time of marriage of my sons in 1978, 1979 and 1982. The jewelry so acquired before check period is my Stridhan. I got the jewelry remade from time to time without incurring any expenses easily with the help of my brothers who are jewelers.
(vii) There is absolutely no disproportion either individually or collectively. My total income as per income tax returns comes to Rs. 10055552/ for which a yearwise summary has already been CBI Vs. KC Aggarwal & Ors. CC No.01/13 Page 60 of 116 submitted by my husband Mr. K. C. Agarwal which included the page numbers of the relevant document as available in EX.PW51/DK.
(viii) The IO has used every trickery to implicate my husband and for that purpose implicated my old widow motherinlaw and me - a self employed innocent woman. The IO mixed up and confused everything despite full accounting of each paise by us. Apart from my company Bhagwati Agencies Private Limited, the IO has taken sporadic figures from my other two companies as well to somehow increase disproportion as follows:
Sita Medicare Private Limited :
Bank balance (page 23 and 32): Rs. 6,020/
Bank charges: Rs. 380/
Kalu Sarai Plot Rs. 1,62,000/
Bestfit Apparel (India) Private Limited:
Bank Balance Rs. 1,930/
Bank Charges Rs. 3,247/
Total assets /expenditure Rs. 1,71,577/
Profit from sale of plot at Faridabad ()Rs. 1,11,250/ Net addition to disproportion Rs. 60,327/ In fact the two companies have their separate existence. The IO has labored so much to add this to disproportion. On the other hand, the IO had with him papers regarding accumulated profits in the said companies which he conveniently ignored. In fact the companies are separate entities and filed their income tax returns. Both the companies are dysfunctional / closed. Old papers / documents are not now available. I am submitting herewith the available papers to show that income tax returns were filed, balance sheets were prepared and got audited and that the companies are closed now. Similarly the IO has added the disputed amounts in the case of Bhagwati Agencies Private Limited pertaining to dispute with M/s Mohan and Company and MDR Jewellers. Apart from the fact that the affairs of independent companies are separate and cannot be clubbed with mine, in fact there are no dues to be recovered and my company is making efforts for obtaining compensation for unnecessary litigation that it had to face from M/s Mohan and Company. Mr. K. C. Agarwal has already submitted the certified copy of statement of account filed by M/s Mohan and Company in CBI Vs. KC Aggarwal & Ors. CC No.01/13 Page 61 of 116 the year 2004 before Hon'ble High Court of Delhi in OMP 178 of 2004. I am also submitting a notice dated 01.02.2005 of Value Added Tax department showing that the company was not functioning. Even nil returns could not be filed in VAT department, not to talk of updating accounts. The IO has, however, tried to illegally show ledger balances from incomplete accounts in respect of Mohan and Company, MDR Jewelers, JSR Overseas / Sanjay Gupta to artificially increase disproportion."
A3 also filed the following documents for consideration: "1) Notice No. 1964 dated 01.02.2005 of VAT Department. (1 sheet)
2) Original postal receipt, office copy of letter regarding dividend of Bhagwati Agencies Private Limited (3 sheets)
3) Original counter foil of dividend warrant. (1 sheet)
4) Copy of income tax return for AY 200304, copy of receipt of Registrar of Companies regarding deposit of annual report and balance sheet, Income tax computation sheet and audited balance sheet of M/s Sita Medicare Private Limited for AY 200304 (11 sheets)
5) Original receipt of Registrar of Companies regarding deposit of annual report and balance sheet, copy of audited balance sheet of M/s Bestfit Apparel India Private Limited for AY 199798 and original income tax return. (10 sheets)
6) IT notice u/s 271/274, notice u/s 156, IT computation form, IT order dated 31.12.2002 in respect of AY 200102 (5 sheets)
7) Copy of Government of India, Registrar of Companies notice under section 560 regarding closure of Bestfit Apparel (India) Private Limited. (1 sheet)
8) Copy of Government of India, Registrar of Companies notice under section 560 regarding closure of Sita Medicare Private Limited. (1 sheet)."
4.5 A4 Rajeev Chaudhary in this statement u/S. 313 Cr.PC denied entire incriminating evidence against him. He stated that the statement of M/s ACPL is correct and the payment of sale proceeds of M/s CFML shares to A2 has duly been accounted for. In respect of transaction on 12.06.2003, A4 stated that since there was no 'online' transaction through the system of the CBI Vs. KC Aggarwal & Ors. CC No.01/13 Page 62 of 116 stock exchange, therefore, no distinct numbers were available . A4 stated that in fact IO of this case wanted him to give statement on dotted lines to falsely implicate A2 and her family. Since A4 refused to play in the hands of IO and stuck up to his guns, therefore, he was falsely implicated. A4 stated that he had no financial or signing authority in M/s ACPL. The transactions with A2 were not handled by him as he was not the Director of the company, at that relevant time. A4 stated that he became Director of the company w.e.f. 30.06.2006.
5.0 Accused persons also produced eight defence witnesses in support of his case. DW1 Manoj Shukla was the Chartered Accountant of the accused. He stated that he had been filing the ITR of A1, A3 and their sons. DW1 had also been filing ITR of M/s BAPL, M/s SMPL and BFAIPL. The witness stated that the booklets Ex.PW51/DK, Ex.PW51/DS, Ex.PW51/DX, Ex.PW51/DX1 to DX4 contained the ITRs, acknowledgment forms, computation of income and documents filed along with them as well the assessment orders. These Returns were filed by the witness for the Assessment Year 199293 to Assessment Year 200607. DW1 deposed that he had also prepared and filed the ITR of A2 for Assessment Year 200001 to 200607 as well ITR of M/s SMPL for the Assessment Year 200304. The audit report dated 01.09.2003 for the year ending 31.03.2003 of M/s SMPL Ex.DW1/1 to Ex.DW1/6 was duly proved. Audit report dtd. 31.09.1997 has also been proved as Ex.DW1/2 by the defence witness. CBI Vs. KC Aggarwal & Ors. CC No.01/13 Page 63 of 116
In the cross examination, DW1 admitted that he cannot verify the source of income of the assessee and he filed the Returns on the basis of information and documents supplied by the assessee to him. The defence witness stated that he did not verify the correctness or genuineness of the documents which were supplied to him by the respective assessee for filing the ITR. The witness denied the suggestion that the false ITRs were filed to show rolling of unexplained income of A1. The witness also denied the suggestion that A2 and A3 were simply housewives without having independent source of income.
5.1 DW2 Jitender Aggarwal, Chartered Accountant stated that he had been practising since 1993 under the name & style of M/s JSM&Co. and M/s Growmore Connections Inc. was their client from Assessment Year 199596 to 200102. The witness provided the file containing ITR and audit report of M/s Growmore Connections Inc. the ITR of Assessment Year 19992000 was prepared by DW2 and filed at Jaipur. The acknowledgment slip was proved as Ex.DW2/A, the computation and audit report u/S. 44AB of Income Tax Act along with its annexures and schedule were proved as Ex.DW2/B and Ex.DW2/C. The audit report u/S. 80HHC along with its annexures was proved as Ex.DW2/D. The witness stated that he considered cash book, bank book, sales register, purchase register, journal ledger and supporting documents including purchase vouchers / purchase bills, manufacturing bills and vouchers, bank statements, FIRC (Foreign Inward CBI Vs. KC Aggarwal & Ors. CC No.01/13 Page 64 of 116 Remittance Certificate) issued by bank, bank advices, bank realization certificate, export invoices duly attested by customs, shipping bill, airway bill, GR copies, bank finance sanction letters and other related documents for the purpose of audit conducted by him. The bank certificate in support of realization along with the application for permission to extend the period for realization of export proceeds was proved as Ex.DW2/E and Ex.DW2/F. In the cross examination, the witness denied the suggestion that Ex.DW2/A and Ex.DW2/C are manipulated documents. He stated that relevant books of account and bills and vouchers were returned back to client after examination. The witness denied the suggestion regarding the ingeniousness of the account books and the transactions. 5.2 DW3 Rohit Goswami, System Incharge in Nam Securities Ltd. deposed that his company is a depository participant under National Securities Depository Ltd. (NSDL). He further stated that A2 had an account in the company. He also brought statement of account of A2 for the period 01.03.2005 to 31.03.2005 and proved the same as Ex.DW3/A. 5.3 DW4 Raje Singh got the statement of account of education loan account of Saurabh Aggarwal and proved the same as Ex.DW4/A. He stated that there was outstanding loan amount of Rs.7,26,450/ as on 30.06.2005. He also proved the statement of account of Saving Bank A/c as Ex.DW4/B. CBI Vs. KC Aggarwal & Ors. CC No.01/13 Page 65 of 116 5.4 DW5 Vinod Kumar, VAT Inspector in Trace and Taxes Dept., proved the show cause notice dated 01.02.2005 issued to M/s BAPL as Ex.DW5/A. In cross examination, the witness admitted that as per show cause notice, the company was not found functioning at C118, East of Kailash.
5.5 DW6 Deepak Swami from IBM company was examined to prove that Pankaj Aggarwal was given dollars in the sum 6,047.25, 5,992.09 and 6,647 in the year 2004. He proved the statement as Ex.DW6/B. 5.6 DW7 Bharat Mohan from Union Bank of India, Overseas Branch, Jaipur stated that the documents pertaining to M/s Growmore Connections Inc. requisitioned in this case are not traceable being 15 years old and have possibly been destroyed as in order to make the space available for the new record. The witness states that generally the record of more than 10 years old is made destroyed.
5.7 DW Keval Chand Jain seems to have been inadvertently numbered as DW7 again. The defence witnesses deposed that he used to look after the entire affairs of firm M/s MDR Jewellers, owned by his nephew Rajesh Jain. In the year 2003 they had the arrangement for purchase of gold through M/s PEC Ltd. and M/s BAPL. He further deposed that M/s MDR Jewellers and M/s Mohan & Co., were business associates. The witness CBI Vs. KC Aggarwal & Ors. CC No.01/13 Page 66 of 116 stated that the sum and substance of dispute between M/s BAPL and M/s Mohan & Co. was that 25 kg of gold was supplied by M/s BAPL to M/s Mohan & Co. out of which 15 kg was delivered through him. However, M/s Mohan & Co. declined to give acknowledgment of the gold and M/s BAPL did not acknowledge the receipt of payment. The witness stated that he had no direct dispute with M/s BAPL and he got involved in the dispute between M/s BAPL and M/s Mohan & Co. as out of 25 kg of gold 15 kg of gold was supplied through him. The witness stated that M/s Mohan & Co. filed a case against M/s BAPL and they also got the agency of M/s BAPL cancelled. The litigation between M/s Mohan & Co. and M/s BAPL continued for around 89 years. The witness states that he intervened and got the matter settled.
In the cross examination, the witness stated that now M/s MDR Jewellers has been wound up. He also stated that M/s BAPL to his knowledge was owned by A3 and was used to be managed by Sanjay Gupta and Ajay Gupta. The witness stated that he knew A1 and used to meet him many times at the office of M/s BAPL at Karol Bagh, New Delhi. The witness stated that he has no knowledge regarding any outstanding of his firm towards M/s BAPL.
6.0 Sh. S. Krishna Kumar, Ld. PP for CBI submitted that A1 had infact been running the entire business and A2 and A3 were only the front persons. A1 employed his ill gotten money in the various business purported to be run by A2 and A3. A2 and A3 have also actively aided and abetted in CBI Vs. KC Aggarwal & Ors. CC No.01/13 Page 67 of 116 amassing the huge wealth by A1. Similarly, A4 also actively aided and abetted A1 in converting the ill gotten money into the share income. It was submitted that A2 and A3 had no source of income and "corpus" being housewives. A2 simply invested Rs. 51,000/ in M/s Growmore Inc. in 1997 which was multiplied to Rs. 45 lakhs in the very next year. Ld. PP submitted that funds can be generated by an individual in 03 ways i.e., either one has some corpus; or has some special skills; or one is indulging into illegal activities. It was submitted that in the present case A1 was indulging into illegal activities and in these illegal activities M/s Ahilya Commercials Pvt. Ltd. and other companies also played an active role. Ld. PP submitted that it has duly been proved on record that A1 was given complete opportunity to explain the income and only thereafter, the income of A2 and A3 has been taken which has been verified during the investigation. In respect of the gift of Rs. 45 lakhs received by A1 from A2, it has been submitted that it is a sham transaction and an apparent means to convert the ill gotten money into white money. Ld. PP submitted that it is beyond comprehension that a person would invest Rs. 50,000/ and in one year it would fetch a profit of more than Rs. 50 lakhs. There is no document on record to suggest that A2 or Late Sh. LN Aggarwal was instrumental in getting any export order to M/s Growmore Inc. The story propounded by the accused persons regarding procurement of order is totally misconceived and cannot be accepted. It has further been submitted that intimation given by A1 to the department regarding receipt of Rs. 45 lakhs was never accepted by the department. A1 did not respond to CBI Vs. KC Aggarwal & Ors. CC No.01/13 Page 68 of 116 the explanations called by the department. It cannot be accepted that the accused was not aware of the objections raised by the department.
In respect of the share income earned by A2, it has been submitted that this is again a sham transaction. The explanations put up by accused persons that shares were purchased in the year 2003 cannot be believed. The story of the accused that in the year 2003, 42000 shares were purchased at the sum of Rs. 2,21,000/ out of which a meagre amount was paid in cash and remaining was paid in cheque. The cheque so paid was never encashed by the broker. It is quite unbelievable that only in March 2005, the payment was made in by cheque and at that time, the cheques were received in Dmat form. Ld. PP submitted that as per defence, the shares were received actually on 14/3/05 for a consideration of Rs. 2,21,000/ and the same shares were sold within 10 days on 24/3/05 for more than 50 lakhs. Ld. PP submitted that defence has not been able to produce any document to show that this share transaction was genuine. Rather, the nature of the transaction apparently shows that it is again a sham transaction only in order to convert the black money into white money. Ld. PP submitted that income earned by A2 in this method was then transferred to M/s Bhagwati Agencies owned by A3 which shows that all the accused persons were mixed up and the entire business and resources were being used in the common pool. Ld. PP submitted that it has come on the record that entire share transactions through M/s Ahilya Commercials Pvt. Ltd. of which A4 was the Director was being infact carried out by A1. The entire resources actually belonged to CBI Vs. KC Aggarwal & Ors. CC No.01/13 Page 69 of 116 A1 and A2 and A3 had only aided and abetted A1. Ld. PP further submitted that M/s Bhagwati Agencies of which A3 was only a front person, was actually doing the business under the control and supervision of A1. In this business also, the ill gotten money of A1 was being used. The books of account maintained by M/s Bhagwati Agencies itself shows that the firm had to receive a sum of Rs. 85 lakhs approx. from M/s MDR Jewellers and around Rs. 36 lakhs from M/s Mohan and Co. Besides this, A2 and A3 were also to receive huge sum of money from PW28 Sanjay Gupta regarding which the prosecution has duly proved the handwritten document of the witness. It has been submitted that PW28 did not give the complete picture as he was admittedly close relative of the accused persons. Ld. PP also pointed out that two cheques of Rs. 5 lakhs each in the name of A2 and similarly, demand drafts in the name of PW5 Mahesh Sharda and PW33 Sanjay Bansal were also found which shows that accused persons had excess flow of cash and the money was being kept here and there. This all shows that A1 had huge DA as compared to his known sources of income which he amassed with the active aid of A2 to A4. Ld. PP submitted that accused had admitted documents Ex.P1 to Ex.P75 and the testimony of prosecution witnesses read with admitted documents proves on record the case against the accused persons beyond reasonable doubt and therefore, accused persons are liable to be convicted.
CBI Vs. KC Aggarwal & Ors. CC No.01/13 Page 70 of 116 6.1 Sh. Jagdish Singh, Ld. counsel for all the accused persons made a detailed argument and also filed several sets of written submissions, additional written submissions, note on legal and factual aspects regarding loose /unsubstantiated points raised by IO/Ld. PP. Ld. Counsel has also placed on record several charts displaying the taxable and non taxable income of A1, A2 and A3. Ld. counsel has also placed on record Annexure I to Annexure XA regarding the analysis/summary of income of accused persons, M/s Bhagwati Agencies, M/s KC Aggarwal & Sons HUF, Apoorva Aggarwal, Pankaj Aggarwal and Saurabh Aggarwal. Sh. Jagdish Singh, Ld. counsel submitted that A4 has falsely been implicated. There is not even an iota of evidence regarding abetment against A4. A4 was not even a Director at the time of transaction in question. The prosecution has not led any evidence in this regard. The attention was drawn to the chargesheet being filed by the prosecution itself, wherein the prosecution has no where averred that A4 was the Director at the relevant time. Ld. counsel invited the attention of the Court to the testimony of PW2 Sh. Cordell Ashley Payne and PW44 Sh. Santosh Kumar Gupta. It has been submitted that there is nothing unusual about steep rise in the value of shares in view of the fact that share market is volatile. Ld. counsel submitted that it is not the case of the prosecution that M/s Continental Fiscal Management Ltd. (CFML) , was a fictitious company. Nor did the prosecution has brought any material on the record to show that A2 had sold the share at inflated value and actual value of share of M/s CFML was lesser on the relevant day. Ld. counsel submitted CBI Vs. KC Aggarwal & Ors. CC No.01/13 Page 71 of 116 that prosecution has based its case against A4 on the premise that the information given by him to the IO during the course of investigation is false and fabricated. However, the prosecution has not brought any evidence in order to substantiate this plea. Ld. counsel invited the attention of the Court to the testimony of PW35 Sh. Amit Santra who has specifically stated that share transaction was genuine and no part of it was fake.
Sh. VK Ohri, Ld. counsel who filed his vakalatnama for A4 at the stage of final arguments stated that there is not even mention of A4 in the entire testimony of prosecution witnesses. No complaint u/S 195 Cr.PC has been filed by the Court and therefore, the charge framed u/S 193 Cr.PC against A4 is illegal per se. Ld. counsel submitted that infact no case is made out against A4. Investigation Officer could not understand the commercial transaction and the windfall has unnecessarily brought the accused under suspicion. Ld. counsel submitted that merely on the basis of suspicion, the accused persons cannot be convicted. Prosecution has merely failed to discharge its onus. It was submitted that the record would reveal that A2 earlier also had been transacting in the share. The share transaction of 2005 was not first transaction on the basis of which any suspicion could be raised. Sh. Jagdish Singh, Ld. counsel for the accused submitted that though IO has exhibited the documents seized by him but mere exhibition of the documents by IO does not mean that such documents have been proved in accordance with law. IO can only prove the fact of seizure of such documents and nothing more.
CBI Vs. KC Aggarwal & Ors. CC No.01/13 Page 72 of 116
In respect of the income earned by A2 from export business, Ld. counsel submitted that M/s Growmore Inc. was a running partnership firm in which A2 was inducted as a partner on 1/4/98 with a capital of Rs. 50,000/ . However, the actual consideration was that husband of A2 i.e. Late Sh. LN Aggarwal, who was alive at that time was to arrange for the export orders. It was pointed out that IO admitted in the cross examination dtd. 26/7/2013 that in current A/c No. 2111 of M/s Growmore Inc. more than Rs. 1 crore was received between April 1998 to March 1999. The partnership deed between A2 and M/s Growmore Inc. was placed on record. It was submitted that A1 duly declared the gifts to the department. During the course of arguments, Ld. counsel invited the attention of the Court towards the Will Ex.P44 (D83) executed by Late Sh. LN Aggarwal just 02 months before death. It has been submitted that mere perusal of this Will would indicate that Late Sh. LN Aggarwal had huge movable and immovable properties which was bequeathed by him to A1 and his other legal heirs. It was submitted that mere perusal of this Will would indicate that share given to A1 was lesser as compared to other brothers and sister and therefore, in order to compensate A1, his mother i.e. A2 gave Rs. 45 lakhs to A1. Ld. counsel submitted that income tax returns filed by M/s Growmore Inc. for the relevant year was duly accepted and no objection was raised as to the income shown to have been earned during the relevant financial year. Ld. counsel submitted that had it been fake transaction, nothing stopped the income tax department to start a probe into the same. Ld. counsel submitted that infact A1 belonged to CBI Vs. KC Aggarwal & Ors. CC No.01/13 Page 73 of 116 a very well to do family. He had been filing ITRs since he was very young. A2 had also joined Class - I service in the year 1978 itself. Ld. counsel submitted that necessary safeguards were not followed to the prejudice of the accused. IO also did not conduct the investigation as per CBI Crime Manual. The sanction granted in this case has also been granted mechanically by an authority who was not competent.
In the written submissions, accused persons submitted that FIR Ex.PW51/A was registered illegal and further more, the same has not been proved in accordance with the law. It was submitted that preliminary enquiry in this case was not conducted, in violation of the CBI Crime Manual and successive directions of the Hon'ble Apex Court. It was submitted that present case was falsely registered at the behest of Mr. Jagdish Sagar, IAS who had an enmical feeling towards A1. It was further submitted that earlier also enquiry was conducted on a complaint of DA referred by CVC which was registered and enquired into as complaint No. 17/96 by the Anti Corruption Branch of Delhi Police and in that enquiry it was inter alia found that each and every thing was accounted for and there was no DA. Similarly, another enquiry in complaint No. 38 of 1996 conducted by ACB of Delhi police, nothing was found against the accused. The case of the defence is that A3 Sheela Aggarwal had an independent financial status and she has been filing the ITRs since AY 19781979 (Ex.PW51/DL). A3 was married to A1 in the year 1978 and even prior to her marriage, she had accumulated saving and capital of approx. Rs. 18,000/, the part of which was deposited with CBI Vs. KC Aggarwal & Ors. CC No.01/13 Page 74 of 116 family enterprises M/s Hotel Rajdoot which started earning interest. In Ex.PW51/DC, the yearwise income with conspicuous mention of income sources has been mentioned. The year wise income on the basis of such ITR prior to check period accumulates to Rs.6,35,528.12 as tabulated in ANNEXUREI. It has been submitted that A3 belonged to a family of jewelers and she had been buying the jewellery from time to time out of her own income and savings. A3 also acquired the company namely M/s Bhagwati Agencies out of her accumulated savings and capital. The income earned during the check period has also been reflected in Ex.PW51/DK as tabulated with yearwise progressive total in ANNEXURE I. The defence has further submitted that M/s Bhagwati Agencies was incorporated with the Registrar of Companies on 11/9/85 with two Directors namely Mr. Bhagwan Sarup Sanghi and Ms. Sumitra Sanghi. The company was acquired by A3 on 07.08.91 through her chartered accountant late Sh. S. K. Jain. At that time the company had a paid up capital of only Rs. 2,000/. After acquisition of company, A3 and one Mr. B. S Aggarwal became the Directors. The share of of Mr. B.S. Agarwal remained confined to Rs.1,000/ only. However, A3 by the year 1991 had sufficient accumulated capital and savings of her own for investing Rs 98,000/ for Tikri Agricultural land and Rs. 1,50,000/ for Gheora Land. Both these investments were duly reflected in the Balance Sheet as on 31.03.1991 filed under income tax and available on record at page 134 of Ex. PW51/DL. The company initially remained in loss. The company had also suffered litigation regarding Gheora land and after its CBI Vs. KC Aggarwal & Ors. CC No.01/13 Page 75 of 116 settlement, the investment of A3 was increased to Rs. 4,40,000/ as on 31.03.1997 as reflected from page 33 of Ex. PW51/DK. The investment of A3 increased to Rs. 5,56,250/ by 200002 and the company also acquired land at Alipur. The company also started earning from rental income as admitted by IO in the chargesheet itself. The company also took a loan from ICICI Bank in the name of A2 for carrying out gold business as reflected in Ex.P58. The prosecution has rather added the loan amount of Rs. 29,99,599/ as income. A2 had also shown her investment made in M/s Bhagwati Agencies Private Limited in her ITR (page 47 in Ex. PW51/DX). It was submitted that business of gold involving huge cash dealings and funds were arranged by A3 in the form of share capitals / loans from her own accounts, from HUF account and accounts of other family members apart from loan from Banks and investments from outsiders. A sum of Rs. 50 lakhs was invested by M/s Priti Mercantile Company Limited as proved during trial. The defence submitted that the actual and correct figure of the income of M/s Bhagwati Agencies has been arrived at as per Ex.P32 (D67) to Rs.13,47,019.52 as reflected in ANNEXURE III. The defence submitted that A2 was adequately secured financially by her husband late Sh. LN Agarwal before bequeathing remaining assets to his children. Late Sh. LN Aggarwal ensured income from export business. A2 had total accumulated income, after subtracting gifted amount of Rs. 45 lakhs to A1 as per ITR to Rs. 1,04,65,829.33 (Ex.PW51/DX). The defence has submitted that CBI has wrongly discarded two income of A2 without any justification CBI Vs. KC Aggarwal & Ors. CC No.01/13 Page 76 of 116 whatsoever i.e., income from share transactions and income from export business. The income has wrongly been rejected despite the fact that prosecution evidence is full of adequate material to show /prove both the income. In the written submissions, the defence has tabulated the specific documents which prove the genuineness of the transactions and the same has not been reproduced here for the sake of brevity. Emphasis was also placed upon the testimony of PW35 Sh. Amit Santra, PW44 Sh. Santosh Kumar Gupta and DW4 Sh. Raje Singh. Similarly, in respect of income from export business, the plea of the defence is that except statement of IO during cross examination that these entries are book entries and actually no business was carried out, the prosecution has not been able to produce any material / document to show any ingenuinenity of these transactions. Rather on the contrary there are lot of document to show that this was a genuine transaction. The prosecution has not examined PW Amitabh Sharma for the reasons best known to them. For this an adverse inference can be drawn against the prosecution. Per contra, the defence has examined the Auditor Chartered Accountant to prove the genuineness of this transaction. Ld. counsel submitted that ITR and Assessment order of A2 were duly submitted by A1 to his department and the IO. The defence submitted that account statement of Bank of Mathura Ex.P75 itself shows receipt of foreign exchange amounting to more than Rs. 1 crore. IO made the allegations without any substance, with a preconceived mind to implicate the accused persons falsely. The defence submitted that A2 was a wealth tax assessee as CBI Vs. KC Aggarwal & Ors. CC No.01/13 Page 77 of 116 back as 198788 with a taxable wealth of Rs. 3 lakhs. It has been submitted that even if moderate rate of growth @ 10% p.a. is taken A2 had accumulated wealth in the sum of Rs. 8,55,935.01 as on 1/4/98. The case of the defence is that after the death of Late Sh. LN Aggarwal, the accused persons could not trace/obtain the previous record of income tax or wealth tax of A2. A1 started managing the financial and tax matter of A2 from AY 19992000 and therefore, as such these documents are in his possession.
The defence has submitted that IO has wrongly taken the disputed ledger entries in incomplete ledger account as asset items No. 34 and 35. In this regard the prosecution has solely relied upon the testimony of PW28 Sh. Sanjay Gupta. Even the books of accounts produced by the prosecution are only upto 31/3/04 and therefore, these do not and cannot prove the debit and credit balance as on 30/6/05. IO also did not admittedly check the corresponding books of M/s MDR Jewellers. Nor did the prosecution examine any witness from M/s Mohan & Co. or M/s MDR Jewellers. The defence has also relied upon cross examination of PW28 Sh. Sanjay Gupta wherein he has clarified the position. The defence stated that they have examined Sh. Keval Chand Jain, witness listed by the prosecution, as DW7 who has deposed on oath regarding the dispute between M/s Bhagwati Agencies on one side and M/s Mohan & Co. and M/s MDR Jewellers on the other side. The reliance was also placed upon subsequent settlement arrived at between the parties before the Hon'ble High Court. It has been submitted that even the prosecution witnesses have disproved the CBI Vs. KC Aggarwal & Ors. CC No.01/13 Page 78 of 116 existence of alleged asset of Rs. 85,75,000/ and Rs. 36,77,511/. The defence pointed out that even before the end of the check period M/s Mohan & Co., filed OMP 178 of 2004 regarding this transaction in which M/s Bhagwati Agencies Private Limited was also made a party. It was also submitted that M/s Bhagwati Agencies Pvt. Ltd. never filed any case against M/s MDR Jewellers or M/s Mohan & Co. and only filed a counter claim in the petition filed by M/s Mohan & Co.
In respect of assets at item No. 33 and 41 relating to deposit / funds deposited with PW28 Sanjay Gupta it has been submitted that prosecution has miserably failed to bring any cogent evidence to prove such an asset against the accused persons. The prosecution has wrongly relied upon Ex.PW28/D which is inadmissible evidence being the signed statement to police during investigation being hit by Sec. 161 of Cr.PC. In this regard, reliance was also placed upon the cross examination of PW28 wherein he has deposed regarding payments of such dues. The defence submitted that the prosecution has wrongly included the assets of KC Aggarwal & Sons HUF but did not include its income. It was submitted that the HUF is an independent person/assessee under income tax and separate income tax returns are being filed and assessments got done from AY 198283 (Ex.PW51/DX1). It was submitted that income tax records prior to 1.4.1997 could not be traced regarding which the police report was also lodged. It has been submitted that the total accumulated income during check period works out to Rs. 26,73,751.40 as per ANNEXURE V. It has been submitted that CBI Vs. KC Aggarwal & Ors. CC No.01/13 Page 79 of 116 though A1 was a 'karta', however, A3 was authorized to operate the account and used to manage the HUF funds. Therefore, assets and income etc of HUF, if at all, has to be clubbed with A3 Sheela Agarwal for the purpose of DA calculations.
It has further been submitted that IO has wrongly discarded the independent financial status of Apoorva Aggarwal, Pankaj Aggarwal and Saurabh Aggarwal whereas they had independent source of income and their wealth was managed by and under control of A3. It has been submitted that IO deliberately excluded the children's income and tried to mislead this Court. Although IO produced separate statement of bank accounts (D85, D109 and D11) IO took the bank accounts selectively. The statement of accounts were also produced in selective manner. The attention was invited to Ex.PW51/DX2, Ex. PW51/DX3, Ex. PW51/DX4, Ex. PW51/DX5 and Ex. PW51/DX6 the available / traceable income documents as filed under income tax. Apoorva Aggarwal had started filing income tax return since AY 198384. The summary of accumulated income of the children have been reflected in ANNEXURE VI to VIII. A1 submitted that IO has also deliberately taken into account only part of his income. The income as shown in ITR as reflected in Ex.PW51/DS, PW51/DT, PW51/DU, PW51/DV and PW51/DW have not been taken into account. A1 is being assessed to income tax since AY 197273. The yearly income of A1 has been tabulated in ANNEXURE IXA and income during check period is tabulated in ANNEXURE - IXB. The total income of A1 comes out to Rs. CBI Vs. KC Aggarwal & Ors. CC No.01/13 Page 80 of 116 1,88,66,045.15. The defence submitted that IO conducted unfair investigation. The income of the accused persons was intentionally ignored. It has been submitted that IO has wrongly taken the income of A1 as Rs. 1,00,34,067/ as per income items No. 1 to 10,12 to18 and 22. Similarly, income of A2 has been taken as Rs. 30,08,782/ on the basis of items at S. No. 19, 34 and 35. It includes the outstanding bank loan amounting to approx. Rs. 30 Lakhs. Similarly, the income of A3 as per IO comes to Rs. 25,21,776/ based on entries at S.No. 11, 20, 21, 23 to 33, 36 and 37 whereas, the total income of the accused persons as per ITR comes out to Rs. 5,37,57,126.22. It was pointed out that IO has not applied the same yardstick to disputed properties. IO did not take into account Flat No. B114 at Sheikh Sarai Phase -II as disputed property but took into account the asset amounting to Rs. 85,75,000/ and Rs. 36,77,511/ based on debit balance in an incomplete ledger of Bhagwati Agencies Private Limited. Similarly, wrongly added Rs. 20 lakhs as asset at S. No. 25 allegedly paid under contract in the year 199596 for purchase of plot No. 52, Sector 34, Gurgaon. Similarly, an asset of Rs. 60 lakhs alleged as an advance paid against plot No. 438/2, Ward No.16, at Civil Lines Gurgaon has wrongly been added. In the written submissions, it has been submitted that IO has added 49 assets with total amount shown as Rs. 4,09,27,400/. Even the arithmetical total is not correctly done by IO/CBI. In fact the correct arithmatical total of assets comes to Rs. 4,19,27,390/. The defence analyzed all the items as per material available on record and the outcome is tabulated in ANNEXURE CBI Vs. KC Aggarwal & Ors. CC No.01/13 Page 81 of 116 X. It has been submitted that a total asset value comes at Rs. 2,05,14,287/ out of which the assets in the name of A1 comes out to Rs. 50,63,438/. which are listed at S. No. 1 (part only), 10, 11, 12, 14, 17, 18, 19 and 47. The remaining assets are to be accounted for by A2 and A3. The defence further submitted that expenditure items have wrongly been exaggerated whereas accused persons had been leading a very simple life. The children had got their vehicle from their own income. IO has wrongly added bank charges which are already deducted for arriving at a figure of income reported under income tax. Similarly, the losses in income tax returns of Bhagwati Agencies Private Limited have been added as expenditures whereas all these have already been accounted for while arriving at income figure in income tax returns. It has been submitted that correct figure for expenditure comes to Rs. 10,96,742/. For the purpose of DA calculations the items No. 3, 4, 5, 6, 8 and 20 are attributable to A1. It has been submitted that there is no DA either individually or collectively and analysis of ledger items as per chargesheet shows that there is no DA. IO has wrongly resorted to clubbing of affairs of A2 an A3 and added non existing and exaggerated value of assets on one hand and wrongly rejected duly returned and assessed income on the other hand apart from ignoring / concealing the investment of Priti Mercantile Company Limited. The defence has submitted that there is no evidence on record to bring the acquisition of assets by A2 and A3 from any unaccounted money of A1. It was submitted that it is obvious from the chargesheet that no asset other than this listed at S. No. 1, 9 to 12, 14, 17 to 21 and 47 existed in CBI Vs. KC Aggarwal & Ors. CC No.01/13 Page 82 of 116 the name of A1. It has been submitted that even as per charge sheet it calculates to Rs. 50,63,438/. Similarly the total expenses attributed to A1 are item No. 3, 4, 6, 8, and 20 amounting to Rs.6,02,632/ and the income attributed to A1 is Rs. 1,00,34,067/ vide item Nos. 1 to 10, 12 to 18 and 22. Thus, A1 had sufficient money to acquire more assets and there was no occasion or reason for him to acquire assets in the name of A2 or A3. A1 had duly informed his department under Conduct Rules that some amount is being made available to A3 for gold business. It has also been submitted that vide letter dtd. 4/3/05 available at page 27 of Ex.P69 full, frank and prior intimation were given under conduct rules with regard to Gurgaon property agreement. It has been submitted that ITR of A2 were submitted to government by A1 as early as 25.09.2001 as seen from page 59 and page 49 of Ex.P69. The defence submitted that there is no evidence against A4. He was not a Director of M/s Ahilya Commercials Pvt. Ltd. at the relevant time nor is there any evidence which could show that he fabricated any false evidence for the purpose of being used in any stage of judicial proceedings. A4 being the employee gave the record of transaction between Ahilya Commercial Private Limited and Mrs. Saraswati Devi Agarwal as available in the records. Last but not the least, accused submitted that there is no valid sanction. It has been submitted that sanction in this case has been given by MoS (Home) whereas, as per Rule 3 of Government of India (Transaction of Business) Rules the sanction can be given by the Minister incharge or under his general or specific order. It has been submitted that the by necessary CBI Vs. KC Aggarwal & Ors. CC No.01/13 Page 83 of 116 implication, the minister incharge remains the competent authority for any business if there is no general or specific order of minister incharge authorizing any other authority. It has been submitted that prosecution has wrongly relied upon the order dtd. 22.12.2008 i.e. Ex.PW52/DA and order dated 15.06.2009 i.e. Ex.PW52/DB.
The defence has placed reliance on Jaydayal Poddar & Anr. Vs Bibi Hazra & Ors., AIR 1973 SC 171 where in it was inter alia held that the burden of proving that a particular sale is benami and the apparent purchaser is not the real owner, always rests on the person asserting it to be so. This burden has to be strictly discharged by adducing legal evidence of a definite character which would either directly prove the fact of Benami or establish circumstances unerringly raising an inference of that fact.
The defence has also placed reliance upon State of Maharashtra Vs. Wasudeo Kaidalwar, AIR 1981 SC 1186. The defence has also relied upon Krishnanand Agnihotri Vs. State of MP, AIR 1977 SC 796 to prove the point that onus of establishing a transaction as benami is on the person who asserts it. This burden has to be discharged by adducing legal evidence of a definite character and suspicion however strong cannot take the place of proof.
The defence has also relied upon Ashok Kumar Thakur Vs. State of Rajasthan, 2008 Lawsuit (Raj) 652, R. Kanappan & K. Chandrasekaran Vs. State by Dy. Supdt . Of Police, 2007 Lawsuit (Mad) CBI Vs. KC Aggarwal & Ors. CC No.01/13 Page 84 of 116 670, K Govardhan Vs. State of Andhra Prade sh , 2013 (1) ALD (Cri) 209 (AP) and Jagan M. Seshadiri Vs. State of Tamil Nadu, 2002 CRLJ 2982. CONCLUSION 7.0 Sec. 13(1)(e) of Prevention of Corruption Act, 1988 makes the possession of disproportionate assets in the hand of public servant punishable. Sec. 13(1)(e) POC Act reads as under:
"A public servant is said to commit the offence of criminal misconduct,
(e) if he or any person on his behalf, is in possession or has, at any time during the period of his office, been in possession for which the public servant cannot satisfactorily account, of pecuniary resources or property disproportionate to his known sources of income.
Explanation. For the purposes of this section, 'known sources of income' means income received from any lawful source and such receipt has been intimated in accordance with the provisions of any law, rules or orders for the time being applicable to a public servant." The bare perusal of this provision would indicate that the prosecution is required to show that accused or some person on his behalf is in possession of pecuniary resources or property disproportionate to his known sources of income and for which the accused cannot satisfactorily account and once it is established, the Court has to presume unless the contrary stands proved that the accused is guilty of the offence of criminal misconduct in the discharge of his duty. Reference can be made to Biswa Bhusahn Vs. State of Orissa, AIR 1954 SC 359. In order to prove an offence u/S 13(1)(e) the prosecution is not required to prove any specific act CBI Vs. KC Aggarwal & Ors. CC No.01/13 Page 85 of 116 of misconduct because possession of pecuniary resources disproportionate to the known sources of a public servants income is not one particular act of a person but is a consequence arising out of his habitual acceptance of bribe, in other words consequence of habitual commission of offence by the public servant. However, the onus to prove an offence always remains on the prosecution. In this regard, in the landmark judgment of Hon'ble Supreme Court in Wasudeo Kaidalwar's case supra it was inter alia held as under: " The provision contained in s.5(1)(e) of the Act is a selfcontained provision. The first part of the Section casts a burden on the prosecution and the second on the accused. When s. 5(1)(e) uses the words "for which the public servant is unable to satisfactorily account", it is implied that the burden is on such public servant to account for the sources for the acquisition of disproportionate assets. The High Court, therefore, was in error in holding that a public servant charged for having disproportionate assets in his possession for which he cannot satisfactorily account, cannot be convicted of an offence under s. 5(2) read with s.5(1)(e) of the Act unless the prosecution disproves all possible sources of income. That takes us to the difficult question as to the nature and extent of the burden of proof under s. 5 (1) (e) of the Act. The expression 'burden of proof' has two distinct meanings (1) the legal burden. i.e. the burden of establishing the guilt, and (2) the evidential burden, i.e. the burden of leading evidence. In a criminal trial, the burden of proving everything essential to establish the charge against the accused lies upon the prosecution, and that burden never shifts. Notwithstanding the general rule that the burden of proof lies exclusively upon the prosecution, in the case of certain offences, the burden of proving a particular fact in issue may be laid by law upon the accused. The burden resting on the accused in such cases is, however, not so onerous as that which lies on the prosecution and is discharged by proof of a balance of probabilities."
CBI Vs. KC Aggarwal & Ors. CC No.01/13 Page 86 of 116 It was further held that:
"The ingredients of the offence of criminal misconduct under s. 5(2) read with s.5(1)(e) are the possession of pecuniary resources or property disproportionate to the known sources of income for which the public servant cannot satisfactorily account. To substantiate the charge, the prosecution must prove the following facts before it can bring a case under s. 5(1)(e), namely, (1) it must establish that the accused is a public servant, (2) the nature and extent of the pecuniary resources or property which were found in his possession, (3) it must be proved as to what were his known sources of income i.e. known to the prosecution, and (4) it must prove quite objectively, that such resources or property found in possession of the accused were disproportionate to his known sources of income. Once these four ingredients are established, the offence of criminal misconduct under s. 5(1)(e) is complete, unless the accused is able to account for such resources or property. The burden then shifts to the accused to satisfactorily account for his possession of disproportionate assets. The extent and nature of burden of proof resting upon the public servant to be found in possession of disproportionate assets under s. 5(1)(e) cannot be higher than the test laid by the Court in Jahgan's case (supra), i.e. to establish his case by a preponderance of probability."
The bare perusal of this judgment makes the law in this regard crystal clear that initially the prosecution is required to prove the possession of disproportionate assets and if accused fails to explain satisfactorily, then onus is on the accused to explain the same satisfactorily. However, the onus on the accused is not as onerous as that on the prosecution. The accused would be presumed to have discharged its onus on the scale of preponderance of probabilities.
CBI Vs. KC Aggarwal & Ors. CC No.01/13 Page 87 of 116
In the case under disproportionate assets, if a public servant has been found in possession of the property disproportionate to his known sources of income which he could not satisfactorily account, the presumption of criminal misconduct is raised against him. Once the prosecution proves this fact, the burden shifts on the accused to prove the source of acquisition of such assets. However, the onus placed on the accused is not to prove his innocence beyond reasonable doubt but only to establish the preponderance of probability. The law is well settled that burden is on public servant to account for the source for the acquisition of assets disproportionate to his income. Similarly, prosecution cannot be burdened to disprove all possible sources of income. The burden on public servant in such case is discharged by bringing in balance of probabilites. The prosecution cannot in the nature of things be expected to know the affairs of the public servant found in possession of resources or property disproportionate to his known sources of income i.e., his salary, because these are matters within his special knowledge, i..e, within the meaning of Sec. 106 Indian Evidence Act.
In the event of the prosecution claiming the properties in the names of members of family of accused to have actually been owned or possessed by the accused, the prosecution is required to prove that the source from which those pecuniary resources or property came into existence belonged to the accused or that there could not have been any other source CBI Vs. KC Aggarwal & Ors. CC No.01/13 Page 88 of 116 than the accused himself to acquire such properties or resources. Normally, human conduct and presumptions can be utilized for this purpose.
In regard to the case of the prosecution that the property in the name of the members of the family of the accused actually belonged to the accused, the prosecution is required to prove by way of positive evidence that the purported owner is not the real owner. The onus to prove this always rests on the person asserting it to be so. It is a settled proposition that this burden has to be strictly discharged by adducing legal evidence of a definite character which would either directly prove the fact of benami or establish circumstances unerringly or reasonably raising the inferences of the fact. In this regard reliance can be placed on a landmark judgment of Apex Court in Jaydayal Poddar & Anr. Vs Bibi Hazra & Ors., AIR 1973 SC 171, wherein it was interalia held as under:
"It is well settled that the burden of proving that a particular sale is benami and the apparent purchaser is not the real owner, always rests on the person asserting it to be so. This burden has to be strictly discharged by adducing legal evidence of a definite character which would either directly prove the fact of Benami or establish circumstances ,unerringly and reasonably raising an inference of that fact. The essence ,of a benami is the intention of the party or parties concerned; and not unoften such intention is shrouded in a thick veil which cannot 'be ,easily pierced through. But such difficulties do not relieve the person asserting the transaction to be benami of any part of the serious onus that rests on him; nor justify the acceptance of mere conjectures or .surmises, as a substitute for proof. The reason is that a deed is a solemn document prepared and executed after considerable deliberation and the ,person expressly shown as the purchaser or transferee in the deed, starts with the initial presumption in his favour that the apparent state ,of affairs is the real state of affairs. Though the CBI Vs. KC Aggarwal & Ors. CC No.01/13 Page 89 of 116 question, whether a particular sale is Benami or not, is largely one of fact, and for determining this question, no absolute formulae or acid tests, uniformally :applicable in all situations, can be laid down; yet in weighing the pro babilities and for gathering the relevant indicia, the courts are usually guided by these circumstances : (1) the source from which 'the purchase money came; (2) the nature and possession of the property, after the purchase; (3) motive, if any, for giving the transaction a benami color; (4) the position of the parties and the relationship, if any between the claimant and the alleged benamidar; (5) the cus tody of the titledeeds after the sale and (6) the conduct of the parties concerned in dealing with the property after the sale."
In other decision of the Hon'ble Supreme Court in Krishnanand Agnihotri Vs. State of MP, AIR 1977 SC 796 it was inter alia held that "essence of benami is an intention of the parties not unoften, such intention is shrouded in a thick veil which cannot be easily pierced through. But such difficulties do not relieve the person asserting the transaction to be benami of the serious onus that rests on him nor justify the acceptance of conjectures and surmises as a substitute for proof."
In such cases, the prosecution is required to establish by legal and cogent evidence that the properties standing in the names of members of the family were held by them on behalf of public servant. The prosecution is to prove beyond reasonable doubt and by means of legal evidence that these were benami properties of such public servant. In such cases, the persons holding such properties are to be proved having no real source of income. CBI Vs. KC Aggarwal & Ors. CC No.01/13 Page 90 of 116
It is pertinent to mention that receipt from a windfall or gains of graft, crime or immoral accretions by a person prima facie would not be regarded as "known sources of income " by a public servant. It is also to be noted that in a case where accused is prosecuted for acquiring disproportionate assets and he pleads that property was acquired by wife or other members of the family and if simply such kind of statements are accepted, perhaps no one can be prosecuted for corruption. It has to be seen whether the accused had obtained permission of the competent authority for his wife doing business, whether the public servant has shown the income in his earlier statement submitted to the department. Even assuming that there is no necessity of showing the income of wife in the property statement also, the simple statement explaining the sources of income cannot be just accepted and if such a trend is allowed, it would lead to dangerous consequences and would ultimately help in increasing corruption. 8.0 Prosecution has filed this chargesheet against A1 a public servant, his mother A2 Saraswati Devi and his wife A3 Sheela Aggarwal. The total DA as per chargesheet is in the tune of Rs. 2,92,15,391/. A4 Rajeev Chaudhary has been chargesheeted and tried for having aided and abetted the accused persons regarding the share transactions of M/s CFML. He has also been charged and tried for fabricating false evidence to favour the accused persons. A1 has been tried for the substantive offence of having been found in possession of DA. A2 and A3 have been chargesheeted and CBI Vs. KC Aggarwal & Ors. CC No.01/13 Page 91 of 116 tried for having aided and abetted A1 public servant in acquisition and possession of such DA. In the chargesheet, the IO has added the assets of A2 and A3 and the companies run by them alongwith assets of A1. IO has also added the income and expenditure of A2 and A3 and the companies run by them. The plea of the prosecution is that the entire income, assets and expenditure of the accused persons have been clubbed as infact the entire show was being run by A1 only. The entire investments in the business were made by A1. A2 and A3 were the house wives and they did not have any formal education or specialization to run the business. A1 has deployed the ill gotten money in the name of A2 and A3 and therefore, the assets acquired in the name of A2 and A3 and the companies/firms in the name of A2 and A3 are to be added alongwith assets of A1. Per contra, the plea of the defence is that A1 belongs to a well to do affluent family. He had started having his own independent income since very early in the life and started filing ITR sine year 1972. A1 married A3 in or around the year 1978. A3 also belong to an affluent family of jewellers. In the year 1978 itself she had a capital of around Rs. 18,000/. A3 has also been filing ITR since the year 1978. Similarly, A2 Saraswati Devi, mother of A1 was wife of a rich person late Sh. LN Aggarwal. Late Sh. LN Aggarwal was a well to do person having several movable and immovable properties in Jaipur and Guwahti. Late Sh. LN Aggarwal, left behind following Will, which reflects his financial position:
CBI Vs. KC Aggarwal & Ors. CC No.01/13 Page 92 of 116 CBI Vs. KC Aggarwal & Ors. CC No.01/13 Page 93 of 116 CBI Vs. KC Aggarwal & Ors. CC No.01/13 Page 94 of 116 CBI Vs. KC Aggarwal & Ors. CC No.01/13 Page 95 of 116 CBI Vs. KC Aggarwal & Ors. CC No.01/13 Page 96 of 116 CBI Vs. KC Aggarwal & Ors. CC No.01/13 Page 97 of 116
He bequeathed the properties in favour of A1 and other legal heirs. He had also made sufficient arrangements for his wife A2 and therefore, A2 was also a well to do lady and had her own sufficient resources and therefore, the income and assets of A2 cannot be clubbed with A1. The prosecution by way of evidence which has been discussed in detail and has not been repeated herein, have made an endeavour to prove on record that infact A1 had been prominently making the investments in the name of A2 and A3. In respect of the Gurgaon property, the prosecution has relied upon the testimony of PW5 Mahesh Sharda, PW9 Dinesh Singla and PW33 Sanjay Bansal. Similarly, the reliance was placed upon PW2 who stated that payment in regard to property of Vill. Kalu Sarai was made by A1. The prosecution has pleaded that most of the bank accounts were in joint name with A1 for the reason that infact it was A1 who was handling the entire things. In respect of M/s Bhagwati Agencies, the prosecution has relied upon the testimony of PW4 Sh. KM Paliwal, PW6 Sh. Pradiptan Sanyal and PW28 Sh. Sanjay Gupta, so as to prove that infact affairs of M/s Bhagwati Agencies were being handled by A1. In respect of the share transactions related to M/s Continental Fiscal Management Ltd., in which A3 Saraswati Devi had whooping profit of more than Rs. 51 lakhs against the investment of around Rs. 2 lakhs, the prosecution has relied upon the testimony of PW1 Sh. Anupam Goel, PW7 Sh. KA Kulwal, PW32 Sh. Shyamalendu Shome, PW35 Sh. Amit Santra and PW44 Sh. Santosh Kumar Gupta. Also, the CBI Vs. KC Aggarwal & Ors. CC No.01/13 Page 98 of 116 prosecution's plea is that all these witnesses have deposed on oath that infact it was A1 who had been handling the entire affair. The plea of the prosecution is that it has come in the evidence substantially that it was A1 who had the entire resources and he made the investments in the name of A2 and A3.
8.1 The core question now would be whether A2 and A3 were not having any resources and the entire investments made in their name were from the resources belonged to A1 or whether A2 and A3 had the sufficient resources of their own to invest in the properties and to run the business.
Here it is also pertinent to note that making investments and running the business in the names of members of the family is one thing and helping the members of the family in business is a different thing. It may be noted that it has come in the evidence of prosecution witnesses that A1 had been actively participating in the business affairs of A2 and A3. It apparently may be a misconduct for a public servant to actively engage in the trade or business which is punishable offence u/S 168 IPC. However, this was not part of the accusation made in the chargesheet nor the accused has been charged for this offence. If the public servant is taking active part in trade or business or assisting the members of the family cannot ipso facto lead to the inference that the entire business was being run by the public servant from his own resources. The Court cannot presume it, unless the prosecution leads specific cogent and creditworthy evidence to prove this. Inorder to conclusively hold CBI Vs. KC Aggarwal & Ors. CC No.01/13 Page 99 of 116 that a business or enterprise was actually being run by a public servant it is necessary to have legal admissible cogent and credible evidence on record that the members in whose name, the purported business was being run had no resources and the entire resources belonged to the public servant. 8.2 Before proceeding further, it is also pertinent to note here that bare perusal of Sec. 13(1)(e) of the POC Act, 1988 would make it clear that mere possession of disproportionate assets per se is not an offence. The possession of disproportionate assets becomes an offence only if the public servant fails to give the satisfactory explanation for the same. The explanation added to Sec. 13(1)(e) also makes it imperative that such acquisition of the assets by public servant must be from the " known sources of income". Such "known sources of income" must be known to the prosecution and not to the accused. Further, reading of the explanation would also make it clear that such "known sources of income" should be lawful and should have been informed to the department as per rules, orders applicable to the public servant. Therefore, if any property had been acquired on the basis of income, which is legally forbidden or which has not been intimated to the department, it cannot be taken into account. Such income has to be excluded for the purpose of calculation of DA. In order to reach to a finding that whether the accused was in possession of DA, the solemn duty lies on the prosecuting agency. It has repeatedly been held that investigating agency cannot be burdened with the onus to disprove all possible sources of income. CBI Vs. KC Aggarwal & Ors. CC No.01/13 Page 100 of 116 But at the same time, investigating agency while making investigation in such case is required to atleast look into the available documents. The investigating agency is always expected to conduct a fair investigation. The fair investigation is an important facet of the natural justice. If the investigation has not been conducted fairly it amounts to the violation of basic fundamental right of a citizen. The corruption is a big problem in the society. In the present days, the corruption is spreading like cancer. Any lenient view in the corruption would be detrimental to the interest of the nation. The provisions of such law dealing with corruption has to be interpreted in such a manner that it must serve the intent of the legislation. If material on record indicates a public servant to be corrupt or indulging in corruption, any liberal interpretation would only be leading to miscarriage of justice. However, if the evidence on record is not conclusive enough to hold a person guilty then the Court should be slow in recording of guilt against the accused. To hold a public servant corrupt is bigger slur than the death of a person. Therefore, in order to hold a person guilty of corruption or misconduct, the Court has to be very careful. The evidence produced by the prosecution has to be scrutinized very carefully. I consider that in such like cases, the evidence produced by the prosecution should be of impeccable quality. The Court is fully conscious of the fact that prosecution cannot prove the case beyond all doubts. The prosecution can only prove the fact beyond all reasonable doubts. However, at the same time, the evidence led by prosecution has to be appreciated in accordance with the golden principle of CBI Vs. KC Aggarwal & Ors. CC No.01/13 Page 101 of 116 criminal jurisprudence. It may be reiterated that in the DA case, the onus on the accused is only to create preponderance of probabilities. In the present case, the defence of the accused is that the investigation has not been conducted fairly. The IO did not take into account correctly his income and income of his wife earned during the check period and of the period prior to the check period. The plea of the defence is that during the search all the records were available and they also produced all such documents before the IO during the investigation. However, the IO was determined to make the case against them for DA and therefore, did not take into account such documents. The accused has submitted that his wife A3 Sheela Aggarwal had been filing ITR since 197879. During the cross examination of the IO, the accused produced compilations of ITR of A3 for the period 197879 to 199192. The accused filed the annexures alongwith his written submissions showing the tabulation of analysis /summary of income of A3 Sheela Aggarwal for the period 197879 to 199192. For the purpose of convenience the same is referred as Annexure 'A'.
Similarly, A3 had regularly filed ITR since 199293 to 200607. During this period again, A3 had sufficient income. The taxable and non taxable income as per ITR of A3 during check period is tabulated in Annexure 'B'.
The accused has also stated that M/s Bhagwati Agenices Pvt. Ltd. of which A3 was a Director, had also been filing ITR since 199192. CBI Vs. KC Aggarwal & Ors. CC No.01/13 Page 102 of 116 M/s Bhagwati Agencies had also agricultural income. The statement of yearly income of M/s Bhagwati Agencies as tabulated by the accused in accordance with ITR is Annexure 'C'.
It is also pertinent to mention here that the defence has submitted that in M/s Bhagwati Agencies, M/s Priti Mercantile had also invested Rs. 50 lakhs and this investment has already undergone scrutiny of income tax authorities and Hon'ble High Court.
In regard to the income of A2 Saraswati Devi, the plea of the accused is that prior to the death of his father, his mother i.e., A2 had been residing with him i.e. her husband. In the circumstances, he could not lay hand over the ITR of A2 prior to 19992000. However, it has been submitted that after 19992000, A1 started managing the affairs of A2 and started filing ITRs. The income as per income tax returns of A2 for the year 19992000 to 200607 has also been tabulated in Annexure 'D' :
The accused has also stated that M/s KC Aggarwal & Sons HUF has also been filing the ITR since 198283 and therefore, the assets of KC Aggarwal & Sons HUF cannot be added to the assets of A1. The tabulation of income of M/s KC Aggarwal & Sons HUF being part of A3 has also been shown in Annexure 'E'.
The defence has also produced overwhelming documents on record in the form of ITR which shows that Sh. Apoorva Aggarwal had been filing ITR since early 1980's. Similarly, Sh. Pankaj Aggaral has also been CBI Vs. KC Aggarwal & Ors. CC No.01/13 Page 103 of 116 filing the return since early 1980's. Sh. Saurabh Aggarwal has also been filing ITR since 199293. Sh. Apoorva, Sh. Pankaj and Sh. Saurabh Aggarwal had also substantial income. The defence has also placed on record the ITR of A1 since the year 197273. It has been submitted that accused KC Aggarwal had the sufficient income since 197273. IO was confronted with the income as claimed byA1 from the year 197273 in form of compilation Ex.PW51/DT. Accused has filed the income documents in the form of tabulations Ex.PW51/DS, PW51/DT, PW51/DV and PW51/DW. The pre check period income accumulation of A1 Ex.PW51/DT is shown in Annexure 'F'.
A1 has also filed a detailed table showing taxable and non taxable income as per ITR filed during the check period. This table is also annexed as Annexure 'G' for the sake of proper understanding and convenience.
The accused has claimed that till the time he was unmarried, he had no expenses as he was living with his parents and he started showing the expenses from the year 197879 when he got married and joined Rajasthan Judicial Services. IO during the course of investigation stated that he has taken only such income of A2 and A3 which had been verified by A1. IO has admitted that he has not taken income as shown in the ITR of A2 and A3. It is also a matter of record that in the chargesheet in the name of assets acquired before the check period, IO had only taken Flat No. 705, Maitryi Apartments, Land at Village Tikri, Amount deposited with Rajasthan CBI Vs. KC Aggarwal & Ors. CC No.01/13 Page 104 of 116 Housing Board and amount spent on purchase of land at Village Gheora. It apparently shows that IO did not take into account any income of A2 and A3 prior to the check period. A1 was admittedly in Govt. service since 1978. It has also been proved on record by way of Will of Late Sh. LN Aggarwal that A1 belonged to a well to do affluent family. The bare perusal of Will, would reveal that father of A1 had left huge properties for his legal heirs.
The ITR of A3 also shows that she had been earning sufficiently. Despite this IO did not take into account any such income which on the face of it shows that the investigation was not conducted fairly. The question now raised is that whether ITR filed prior to the check period should be taken into account for the purpose of computation of income. This would also help the court in determining the core question that whether A2 and A3 had sufficient income / resources of their own or the properties shown in their names have actually been secured from the resources of the accused. 8.3 Before proceeding further, it is advantageous to refer briefly the law laid down by the Apex Court in regard to the benami properties. It has been repeatedly held that the burden of showing that a particular transaction is benami and the apparent owner is not real owner always rests on the person asserting to be so. The mere fact that the ostensible owner has no source of income in itself would not lead to any inferences that the property in question was purchased with the income of the accused. The absence of any source of income to the ostensible owner would merely indicate that the CBI Vs. KC Aggarwal & Ors. CC No.01/13 Page 105 of 116 property might have been acquired with the income flowing from someone else. The prosecution is required to prove by way of cogent evidence that someone else is the public servant. Now coming to the question of ITRs. In M. Krishna Reddy Vs. State Dy. Superintendent of Police, Hyderabad, AIR 1993 SC 313, the accused had claimed that an amount of Rs. 56,240/ to be included in his income and consequently to be deducted from DA. The accused based his claim upon the ITR as well as the ITR of the said persons and wealth tax returns of his wife. The evidence was produced that such transactions were shown in the ITR / Wealth tax returns which were collectively filed for a consolidated period of 03 years. But all these returns were filed atleast one year before the search was conducted in the premises of the accused and the case was registered. The Apex Court held that such wealth tax and ITR as unimpeachable documents. It was inter alia held that these documents could not have been concocted and manipulated anticipating the prosecution in a subsequent year. It was further inter alia held that the prosecution had not satisfactorily discharged the expected burden of proof in disproving the claim of the accused. Similarly, in the case of State of AP Vs. J. Satyanarayana, 2001(1) BCCR 300 (SC), the ITR had been filed by the wife of the respondent admittedly before the date of raid and even prior to the registration of the case. The argument that the ITR of the wife of the respondent should not be relied upon and that it was an after thought brought into existence to save the accused was rejected by the Hon'ble High Court CBI Vs. KC Aggarwal & Ors. CC No.01/13 Page 106 of 116 and the Hon'ble Supreme Court. The Apex Court inter alia held that the said ITR filed by the wife could not be labelled as an after thought when it had been filed much prior to even the registration of the case against the respondent by the Anti Corruption Branch. It was noted that not only the returns filed but assessment was completed. The receipt of various loans which had been shown by the wife in the ITR, thus stood accepted by the income tax authorities. In the present case, it is not the case of the prosecution that the ITRs filed by A2 and A3 or M/s Bhagwati Agencies were manipulated, concocted or inflated one. There is not even a single whisper on the record to suggest any such thing. The defence has also placed reliance upon DSP Chennai Vs. K. Inbasagaran, AIR 2006 SC 552. In this case, a senior IAS officer was charged for possession of DA u/S 13(2) r/w 13(1) (e) of POC Act, 1988. Huge amounts of cash, gold biscuits, foreign exchange and documents regarding purchase of movable properties alongwith FDR were recovered from his premises pursuant to a raid by the Income Tax Department. The raid was followed by a criminal case. The Apex Court inter alia held that in the absence of any evidence to show that the said assets belonged to the accused, he cannot be convicted under the said offence and that it was very difficult to segregate the wealth belonging to the husband and to the wife. In Insabagran's case supra it was inter alia held as under:
"It is true that when there is joint possession between the wife and husband, or father and son and if some of the members of the family are involved in amassing illegal wealth, then unless there is CBI Vs. KC Aggarwal & Ors. CC No.01/13 Page 107 of 116 categorical evidence to believe, that this can be read in the hands of the husband or as the case may be, it cannot be fastened on the husband or head of family. It is true that the prosecution in the present case has tried its best to lead the evidence to show that all these moneys belonged to the accused but when the wife has fully owned the entire money and the other wealth earned by her by not showing in the Incometax return and she has accepted the whole responsibilities, in that case, it is very difficult to hold the accused guilty of the charge. It is very difficult to segregate that how much of wealth belonged to the husband and how much belonged to the wife."
The accused has also challenged the case of the prosecution on the ground that sanction has not been granted in accordance with the law. It has been submitted that MoS (Home) was not competent to grant the sanction nor it has been authenticated in accordance with the law. However, the law regarding sanction is very well settled.
It is a settled proposition that grant of sanction is a sacrosanct act and is intended to provide safeguard to a public servant against frivolous and vexatious litigations. Grant of sanction is only an administrative function and the sanctioning authority is required to prima facie reach the satisfaction that relevant facts would constitute an offence. Satisfaction of the sanctioning authority is essential to validate an order granting sanction. Recently, the question of sanction came up before the Apex Court in State of Maharashtra Vs. Mahesh G. Jain, (2013) 8 SCC 119 in which it was inter alia held that adequacy of material placed before the sanctioning authority cannot be examined by the Court. The court should not adopt hypertechnical approach to determine the validity of sanction order. When sanction order CBI Vs. KC Aggarwal & Ors. CC No.01/13 Page 108 of 116 indicates application of mind by authority, Court should not interfere with it on hypertechnical ground. It was further held that Court should keep in mind rampant corruption in the society and act with magnitude. It is incumbent on the prosecution to prove that the valid sanction has been granted by the sanctioning authority after being satisfied that a case for sanction has been made out. The sanction order may expressly show that the sanctioning authority has perused the material placed before it and after consideration of the circumstances has granted sanction for prosecution. The prosecution may prove by adducing the evidence that the material was placed before the sanctioning authority and its satisfaction was arrived at upon perusal of the material placed before it. If the sanctioning authority has perused all the materials placed before it and some of them have not been proved that will not vitiate the order of sanction. It was further held that adequacy of material placed before the sanctioning authority cannot be gone into by the Court as it does not sit in appeal over the sanctioning order. The order of sanction should not be construed in a pedantic manner with a hyper technical approach to test its validity. When there is an order of sanction by the competent authority indicating application of mind, the same should not be lightly dealt with. The whimsy technicalities cannot be allowed to become tools in the hands of accused. I consider that in view of the clear law laid down in Mahesh G. Jain's case (supra), there is no further need to dwell on this issue. The prosecution has successfully proved the sanction granted against A1 KC Aggarwal. There is nothing on record to suggest that sanction CBI Vs. KC Aggarwal & Ors. CC No.01/13 Page 109 of 116 was not granted by a competent person.
9.0 The prosecution has primarily based its case upon 05 transactions:
(i) Gift of Rs. 45 lakhs to A1 by A2;
(ii) Such amount flowed from the income from partnership of A2 with M/s Growmore Inc;
(iii) Income from sale of shares by A2;
(iv) Huge outstanding in the account of M/s Bhagwati Agencies against MDR Jewellers, M/s Mohan & Co.; and,
(v) Outstanding against PW28 Sh. Sanjay Gupta.
All these transactions except gift of Rs. 45 lakhs pertained to A2 and A3. In the present trial, this Court is primarily trying a public servant A1 for the possession of DA. A2 to A4 have been tried for aiding and abetting A1 for amassing the DA. In order to attribute the assets of A2 and A3 to A1 the Court is required to examine two things:
(1) A2 and A3 had no resources or income to acquire the assets or run the business; and, (2) The assets were acquired and business was being run with the resources of A1.
Both the prepositions are required to be examined to ascertain that whether A2 and A3 had sufficient resources of their own or the CBI Vs. KC Aggarwal & Ors. CC No.01/13 Page 110 of 116 resources of A1 were being used in the name of A2 and A3. The ITR's being proved by the defence as discussed herein above shows that A2 and A3 had been filing ITR showing sufficient income much prior to the registration of the FIR or conducting the raid. The CBI has not approached the Income Tax department or any other appropriate authority to initiate the action against the accused persons regarding malafide practices in the transactions of M/s Bhagwati Agencies or the sale/purchase of shares by A2. While the public servant is being tried for the DA and the allegations are that other close members of the family are aiding and abetting him then the thing to be examined is that whether the money which has come into the hands of the public servant has actually come from lawful sources or not. For. eg., if wife or mother had the income from unlawful sources i.e. like gambling, horse trade, smugging etc or any source which is beyond the explanation, then such receipts in the hands of the public servant cannot be taken into account. It is also pertinent to mention here that in business if there can be sudden and huge losses, there is also possibility of sudden and huge profits. Merely, because in a business transaction, big profit has accused, it does not become a fraudulent unless proved to be so. In the present case, the plea of the prosecution is that export income and share income of A3 is not proper and these are book transactions only inorder to cover the ill gotten money of A1. It has to be understood that a charge is not proved merely by saying of the prosecution. The prosecution is required to prove the charges by way of conclusive evidence. It is correct that eyebrows are raised when mere on the CBI Vs. KC Aggarwal & Ors. CC No.01/13 Page 111 of 116 investment of Rs. 50,000/, a profit is earned of more than Rs. 50 lakhs in one financial year. But then, merely on this basis the export transactions which has duly been proved on the basis of documentary evidence by DW2 cannot be discarded outrightly. As per the documents, having been produced on the record, the defence has been able to prove by preponderance of probabilities that actually the export business was carried out in which A2 had a whooping profit. The question is that if the prosecution wanted to prove that this export transaction was a sham transaction, then it was for them to prove. The prosecution wanted this Court to presume that this export transaction is not genuine because the investment and the return is highly disproportionate. Ofcourse, this raises a suspicion but the question is that can on the basis of mere suspicion, the accused can be convicted. The obvious answer is "No". The prosecution was required to prove much more than what they have done. It seems that IO did not have expertise in investigation in the commercial matters and it is also disappointing to note that senior officers of CBI also did not render any assistance /help to the IO. Similarly, the transaction of shares sale and purchase of M/s Continental Fiscal Management Ltd., there is a possibility that A2 had only booked profit in order to have a capital gain or this might not have been genuine transactions. But again, it is for the prosecution to prove. This Court being the criminal Court is required to conduct the trial in accordance with the established principles of criminal jurisprudence. Howsoever, the grave suspicion may be but the accused cannot be convicted on the basis of mere suspicion, CBI Vs. KC Aggarwal & Ors. CC No.01/13 Page 112 of 116 conjectures and surmises. There has to be credible evidence on the record. The prosecution witness PW35 Sh. Amit Santra itself in the cross examination has stated that transaction of sale of shares was a genuine transaction. Though he stated that the off market transaction regarding purchase of share may raise a suspicion but again on the basis of mere suspicion, the conviction cannot be recorded.
In respect of the other two transactions of the huge outstanding in the account of M/s Bhagwati Agencies Pvt. Ltd. and outstanding against PW28 Sh. Sanjay Gupta, I consider that prosecution did much less than desired. The outstanding against M/s MDR Jewellers and M/s Mohan and Co., were added in the assets even without cross examining with M/s MDR Jewellers and M/s Mohan and Co. and it was duly admitted by the IO in the cross examination. Rather the defence examined DW7 Keval Chand Jain, who stated that there was no outstanding. Again this may be a business trick but this taint cannot be attributed to A1. Here is not the case where A2 and A3 were claimed to be having the income on the basis of knitting, tuition, gardening etc. The defence has produced material on record to show that A3 was transacting into the gold business. There were high volume transactions. Similarly, A2 and A3 had also been transacting into the shares. It is also pertinent to mention here that all three children of A1 and A3 were highly qualified. It has been submitted that the share business does not need much time and infrastructure. The understanding of this business would make the person earn a sufficient amount.
CBI Vs. KC Aggarwal & Ors. CC No.01/13 Page 113 of 116
I have also gone through the personal file of accused Ex.P69. Perusal of this file would indicate that A1 had been intimating his transactions including receipt of gift to the department. The perusal of the file indicated that some of his transactions were accepted, however, the department had problem over the receipt of gift, purchase of flat No. C118, East of Kailash and accused accepting the position in Priyadarshini Computer Institute. The file indicates that accused was asked to explain these things and ultimately matter was referred to Ministry of Home Affairs. The perusal of the file gave an impression that the Controlling Officer instead of taking any decision merely proceeded through the motions. It is pertinent to mention here that in DA case, mere violation of conduct rules would not per se make the case of DA nor it can be stated that mere compliance with the conduct rules would immune public servant from case of DA. The domain of two concepts are totally different. Thus, I consider that there is enough material on record that A2 and A3 as well as M/s Bhagwati Agencies were having the sufficient income and were a separate entity and therefore, their assets cannot be attributed to A1. Thus, if the assets and income of A2 and A3 and M/s Bhagwati Agencies are excluded, then there is no case of DA against A1. Similarly, the expenditure incurred by Sh. Pankaj Aggarwal, Sh. Saurabh Aggarwal and Sh. Apoorva Aggarwal also cannot be attributed to A1 as the children were also having sufficient income as per ITR filed even before the check period.
CBI Vs. KC Aggarwal & Ors. CC No.01/13 Page 114 of 116
Even if the figures as proposed in the chargesheet are taken into account, the income of the accused would come out to Rs. 1,00,34,067/. In this the figure of gift of Rs. 45 lakhs is not being included as this had not been accepted by the department as per personal file. Thus, even if this income is taken into account, the assets of the accused as per chargesheet itself is around Rs. 50 lakhs. In this even if the entire expenditure as claimed by the CBI in the sum of Rs. 28 lakhs is taken into account, there would be no case of DA against the accused. I consider that basic premises of the CBI was wrong. A2 and A3 were separate entities and their income, expenditure and assets cannot be attributed to A1. Similarly, in respect of immovable properties in the name of A2 and A3, there is nothing on record to suggest that these properties were owned by A1.
In respect of A4, I consider that prosecution has not been able to prove its case. The prosecution has not even proved by way of positive evidence that A4 was Director of M/s Ahilya Commercials Pvt. Ltd., at the relevant time. Similarly, there is no evidence on record which could even lead to inference that A4 had aided or abetted A1 in any manner in acquisition of properties disproportionate to his known sources of income. The evidence regarding fabrication of false evidence is highly insufficient.
In view of the above discussions, all accused persons namely A1 Kamlesh Chandra Aggarwal, A2 Saraswati Devi, A3 Sheela Aggarwal and A4 Rajeev Chaudhary are acquitted of the charge u/Ss U/Sec.13(2) CBI Vs. KC Aggarwal & Ors. CC No.01/13 Page 115 of 116 r/w 13(1)(e) of the POC Act; U/Sec.109 IPC r/w Sec. 13(2) r/w 13(1)(e) of the POC Act and U/Sec. 109 r/w Sec. 13(2) r/w 13(1)(e) of the POC Act, 1988 and Sec. 193 IPC in RC No. 34(A)/05.
Accused persons are on bail. Their surety bonds / bail bonds are cancelled. Sureties are discharged. Original documents if any, may be returned back against proper acknowledgment.
10.0 File be consigned to RR.
Announced in Open Court (Dinesh Kumar Sharma)
on 08.08.2014 Spl. Judge (PC Act) : CBI
Saket Courts : New Delhi
CBI Vs. KC Aggarwal & Ors. CC No.01/13 Page 116 of 116
ANNEXURE - 'A'
Analysis / Summary of Income documents of A3 in Ex.PW51/DL Page Particulars of Document AY / Date Amount (INR) No. Opening Balance 8800.00 1 Gross Income 197879 11800.00 2 Gross Income 197980 11400.00 3 Gross Income 198081 12200.00 4 Gross Income 198182 25065.00 5 Gross Income 198283 15080.00 6 Gross Income 198384 25070.97 7 In this year A3 inherited jewellery on death of her close relation and also paid estate 198485 89342.30 duty on it.
8 Gross Income 198586 8154.00 9 Gross Income 198687 15099.00 10 Gross Income 198788 26626.00 11 Gross Income 198889 29330.00 12 Gross Income 198990 117847.85 13 Gross Income 199091 108825.00 14 Gross Income 199192 130888.00 CBI Vs. KC Aggarwal & Ors. CC No.01/13 Page 117 of 116 ANNEXURE - 'C' Statement of Yearly Income of M/s Bhagwati Agencies Pvt Ltd Income as per ITR AY YEAR Business Rental Agricultural Returned Dividend Income income Income Income 199192 2019.5 2019.50 199293 2020 2020.00 199394 2000 2000.00 199495 12400 12400.00 199596 13400 13400.00 199697 5515 5515.00 199798 1800 20910 22710.00 199899 13090 13090.00 199900 14460 14460.00 200001 15060.5 15060.50 200102 143880 143879.82 200203 191804 191803.62 200304 199224 199224.10 200405 219859 219858.50 200506 325257 154000 501657.48 200607 FY from 1/4/05 till 30/6/05 Total accumulated income as per ITR 1347019.52 Investment by M/s Priti Mercantile Company limited 5000000.00 TOTAL ADDITION TO INCOME FROM KNOWN 6347019.52 SOURCES CBI Vs. KC Aggarwal & Ors. CC No.01/13 Page 118 of 116 ANNEXURE 'E' Income of M/s KC Aggarwal & Sons HUF - Being part of A3 Page No. Particulars of Document Date / AY Amount (INR) 1 Gross Income 198283 12200.00 2 Gross Income 198384 12300.00 3 Gross Income 198485 12240.00 4 Gross Income 198586 12800.00 5 Gross Income 198687 Figure NA 6 Gross Income 198788 Figure NA 7 Gross Income 199697 42990.00 8 Gross Income 199798 1148931.53 9 Gross Income 199899 112851.00 10 Gross Income 199900 606879.73 11 Gross Income 200001 140705.76 12 Gross Income 200102 128807.97 13 Gross Income 200203 167497.57 14 Gross Income 200304 91566.66 15 Gross Income 200405 36408.46 16 Gross Income 200506 219058.72 17 Gross Income 200607 21044.00 Total income check period 2673751.40 CBI Vs. KC Aggarwal & Ors. CC No.01/13 Page 119 of 116 ANNEXURE 'F' Pre-Check Period Income Accumation of A1 Page Income other than AY /DATE Salary Income if any (INR) No salary (INR) 1 197273 36721.00 1 197374 8000.00 2 197273 3 197273 4 11/9/1974 5 12/1/1975 6 197374 7 197475 8 197475 9000.00 9 197576 14640.00 10 197677 19555.00 11 197778 23378.00 12 197879 25852.00 13 197980 12009.00 14 198081 15118.00 15 198182 40000.00 12000 16 198283 17500.00 17 198384 17183.00 18 198485 18988.00 19 198586 22960.00 20 198687 26947.10 21 198788 44438.30 22 198889 9600.00 47923.00 23 198990 6566.67 51974.00 24 199091 58101.00 25 199192 29421.00 68815.00 Total 196881.67 439808.40 CBI Vs. KC Aggarwal & Ors. CC No.01/13 Page 120 of 116 ANNEXURES "B"
The Taxable and Non taxable income as per ITR of A3 during check period S.No A.Y. Net Deductions / Exemptions / Rebates Reference documents Description of . Taxable (reported, assessed and not taxed) income benefit (non Income as taxable additions net per ITR income in ITR) 1 20416.20 U/s 48(2) - Long term Computation sheet at page Deductions / capital gain 2 of PW51/DK Exemptions / Rebates (reported, assessed 2 4094.60 u/S 80L - Dividend and and not taxed) bank interest 3 250000.00 Receipt from Jagdamba Page 9, 15 of PW51/DM Industries 4 111000.00 Receipt from Competent Page 79 PW51/DL Auto 199293 54530.00 5 1000.00 Sumitra Pharma Shares Page 79 PW51/DL; Page 5 Receipts from pre PW51/DK check assets - source 6 8000.00 HFCL Shares of funds / income.
7 6850.00 Reliance Petro Ltd.
Debenture C 8 10360.00 Sale of ornaments Page 79 PW51/DL; page 1, 2 PW1/DM 9 411720.80 Sub Total 10 10000.00 Under Chapter VIA Page 7 of PW51/DK Deductions / Exemptions (reported, 11 4500.00 US 64A - Three minor Page 8 of PW51/DK assessed and not sons taxed) 199394 78563.14 12 85095.00 Agricultural Income Page 8 of PW51/DK; page Tax free income 8, PW51/DM 13 99595.00 Sub Total 14 10000.00 U/S 80 L Bank Intt. and Page 12 of PW51/DK Deductions / dividend. Exemptions (reported, assessed and not 15 4500.00 US 64A - Three minor Page 13 of PW51/DK 199495 55850.00 taxed) sons 16 261540.00 Agricultural Income Page 13 of PW51/DK Tax free income 17 276040.00 Sub Total 18 10000.00 U/S 80L Bank Intt. And Page 16 of PW51/DK Deductions dividend 19 17070.00 Can PEP Page 7 of PW51/DN Receipts from pre check assets - source 20 57500.00 Sale of 13 Tola Gold Page 3, 12 & 13 of 199596 66777.65 of funds / income.
PW51/DN 21 25000.00 LIC Survival Benefit Page 11, 22 of PW51/DN Tax free income 22 70270.00 Agricultural Income Page 16 of PW51/DK 23 179840.00 Sub Total 24 199697 69416.83 10000.00 Standard deduction Page 22 of PW51/DK Deductions / Exemptions (reported, 25 13000.00 u/S 80L Bank intt. And Page 20 of PW51/DK CBI Vs. KC Aggarwal & Ors. CC No.01/13 Page 121 of 116 dividend.
26 3000.00 Deduction for two Page 22 of PW51/DK
children assessed and not
27 70000.00 Depreciation on car Page 24 of PW51/DK taxed)
28 191677.00 Agricultural income Page 20 of PW51/DK Tax free income
29 287677.00 Sub Total
30 246000.00 Agricultural Income Page 25 of PW51/DK Tax free income
31 199798 130050.59 23000.00 Depreciation on car Page 28 of PW51/DK Deductions
32 844354.00 Sub Total
33 247000.00 Agricultural Income Page 30 of PW51/DK Tax free income
34 41400.00 Depreciation of Car Deductions
35 199899 118030.00 78477.00 Disinvestment from Page 79 of PW51/DL Liquidation of pre
Hotel Rajdoot check assets.
36 366877.00 Sub Total
37 12000.00 u/S 80L Bank Intt and Page 33 of PW51/DK Deductions /
dividend Exemptions (reported,
assessed and not
38 397051.00 Deduction for cost Page 35 of PW51/DK
19992000 85290.00 taxed)
indexation
39 227000.00 Agricultural Income Page 33 of PW51/DK
Tax free income
40 2037662.00 Long term gain on shares Page 35 of PW51/DK
41 12000.00 Under Chapter VIA Page 37 of PW51/DK Deductions /
Exemptions (reported,
42 562338.00 Deduction for investment Page 37 of PW51/DK
assessed and not
in house
200001 1305215.56 taxed)
43 205300.00 Agricultural Income Page 37 of PW51/DK Tax free income
44 779638.00 Sub Total
45 12000.00 Under Chapter VIA Page 43 of PW51/DK Deduction
46 181400.00 Agricultural Income Page 43 of PW51/DK Tax free income
47 2513.15 Capital loss on UTI Page 44 of PW51/DK Loss on shares
200102 111450.00 Master growth
48 190886.85 Sub total (note: mistake of Rs.
26380/ (interest paid) in
Annexure1)
49 9000.00 Under Chapter VIA Page 46 of PW51/DK Deductions /
Exemptions (reported,
50 6325.30 Deduction on rental Page 47 of PW51/DK
assessed and not
income
taxed)
51 24000.00 Deposit from tenant Page 3 of Ex.P35 (D73) Non taxable receipt
retained till after
200203 71440.00
30.06.05
52 145000.00 Agriculture income Page 46 of PW51/DK
53 184325.30 Sub Total (note: mistake of Rs.
10915.67 House tax in
Annexure1)
54 200304 91270.00 12000.00 Under Chapter VIA Page 49 of PW51/DK Deductions /
CBI Vs. KC Aggarwal & Ors. CC No.01/13 Page 122 of 116
55 19200.00 Deduction on rental Page 50 of PW51/DK Exemptions (reported,
income assessed and not
taxed)
56 145000.00 Agriculture income Page 49 of PW51/DK Tax free income
57 176200.00 Sub Total (note: Mistake of Rs.
32,000/ House tax in
Annexure1)
58 14196.50 Under Chapter VIA Page 51 of PW51/DK Deductions /
Exemptions (reported,
59 36801.00 Deduction on rental Page 52 of PW51/DK
assessed and not
income
taxed)
60 200405 133530.00 146500.00 Agriculture income Page 51 of PW51/DK Tax free income
61 40000.00 Deposit from tenant Page 5 of P.49 (D90) Non taxable receipt
retained till after
30.06.05
62 237497.50 Sub Total
63 12000.00 Under Chapter VIA Page 54 of PW51/DK Deductions /
Exemptions (reported,
64 28800.00 Deduction on rental Page 55 of PW51/DK
assessed and not
income
taxed)
65 175635.15 Deduction for cost Page 57 of PW51/DK
200506 261080.00 indexation
66 73391.62 Long term gain on shares Page 54 of PW51/DK
Tax free income
67 120000.00 Agriculture income Page 54 of PW51/DK
68 409826.77 Sub Total
69 100000.00 Under Chapter VIA Page 59 of PW51/DK Deductions /
Exemptions (reported,
70 51994.00 Deduction on rental Page 60 of PW51/DK
assessed and not
income
taxed)
71 2424.00 Dividend income Page 60 of PW51/DK
200607 286150.72 Tax free income
72 55410.00 Agriculture income Page 59 of PW51/DK
73 209828.00 Sub Total (Note: Mistake of Rs.
40,286/ house tax in
Annexure1)
CBI Vs. KC Aggarwal & Ors. CC No.01/13 Page 123 of 116
ANNEXURE 'D'
Taxable and Non Taxable Income of A2 as per ITR
S.No Assessment Amount Deductions / exemptions / Rebates (reported, assessed Description
. Year (INR) and not taxed)
Amount Page No. Exhibit No. Acceptance by IT authorities
at GuwahatiGift mentioned at
bottom of page 2
1 PW51/DX 1 to 3
2 P69/DX125 Acceptance of gift by IT
authorities at Delhi.
3 P69/D125 438/C to 440/c Conduct Rule Intimation -
19992000 5604393.94 shows submission 5 years before
FIR.
4 P69/D125 450/C to 451/c Intimated under conduct rule
about gift having been shown in
income tax.
5 62782.00 Entire income appears in ITR at
200001
page 6 of PW51/DX
6 69300.00 Entire income appears in ITR at
200102
page 6 of PW51/DX
7 37866.00 Entire income appears in ITR at
200203
page 6 of PW51/DX
8 109173.92 Entire income appears in ITR at
200304
page 6 of PW51/DX
9 200405 294614.00 101546.00 PW51/DX 15 Deduction for cost indexation
10 13770.00 PW51/DX 18 Rental Income deduction
200506 321300.00
5297241.74 PW51/DX 19 Long term gain on shares
39600.00 PW51/DX 22 Rental Income deduction
11 200607 231104.04
10000.00 PW51/DX 22 Share dividend tax free
CBI Vs. KC Aggarwal & Ors. CC No.01/13 Page 124 of 116
ANNEXURES "G"
The Taxable and Non taxable income as per ITR of A1 during check period S.No A.Y. Net Deductions / Exemptions / Rebates (reported, Reference documents Description of income . Taxable assessed and not taxed) benefit (non taxable Income as additions net income per ITR in ITR) 1 12000.00 Standard deduction from salary Page 2 of PW51/DS Deductions / Exemptions / Rebates 2 10000.00 Deduction under Chapter VIA Page 1 of PW51/DS 199293 74070.00 (reported, assessed and 3 19251.00 Long term gain on shares Page 2 of PW51/DS not taxed) 4 41251.00 Sub Total 5 12000.00 Under Chapter VIA Page 7 of PW51/DS Deductions / Exemptions/ Rebates 6 1989.76 US 64A - Three minor sons Page 8 of PW51/DS 199394 103825.00 (reported, assessed and not taxed) 7 13989.76 Sub Total 8 3135.83 Deduction under Chapter VIA Page 16 of PW51/DS Deductions / Exemptions/ Rebates 9 15000.00 Standard Deduction from salary Page 17 of PW51/DS 199495 84870.00 (reported, assessed and not taxed) 10 18135.83 Sub Total 11 15000.00 Standard Deduction from salary Page 22 of PW51/DS Deductions / 12 4691.72 Deduction under Chapter VIA Page 21 Backside PW Exemptions/ Rebates 51/DS (reported, assessed and not taxed) 13 199596 90630.00 4230.00 Deduction for cost indexation Page 22 of PW51/DS 14 37436.00 LIC Survival Benefit Page 78 and 80 Tax free income PW51/DU 15 61357.72 Sub Total 16 15000.00 Standard deduction from Salary Page 23 backside of Deductions / PW51/DS Exemptions / Rebates 199697 103560.00 (reported, assessed and 17 5605.19 Deduction under Chapter VIA Page 24 of PW51/DS not taxed) 18 20605.19 Sub Total 19 10436.25 Deduction under Chapter VIA Page 25 of PW51/DS Deductions / Exemptions / Rebates 20 15000.00 Standard Deduction from Salary Page 26 of PW51/DS 199798 144290.00 (reported, assessed and 21 32452.00 Rental Income deduction Page 26 of PW51/DS not taxed) 22 844354.00 Sub Total 23 20000.00 Standard deduction from salary Page 33 of PW51/DS Deductions / 199899 178240.00 exemptions 24 20000.00 Standard deduction from salary Page 37 of PW51/DS Deductions / 199920 283250.00 Exemptions / Rebates 25 12000.00 Deduction under Chapter VIA Page 36 of PW51/DS 00 (reported, assessed and not taxed) 26 4500000.00 Gift from Mother Page 451, 452, 450/c Tax free receipts from (P69); Page 2 parents PW51/DX 27 900000.00 Advance for house paid by late Page 7 and 8 of CBI Vs. KC Aggarwal & Ors. CC No.01/13 Page 125 of 116 father Chargesheet 28 5452000.00 Sub Total 29 20000.00 Standard Deduction from salary Page 42 of PW51/DS Deductions / Exemptions/ Rebates 30 12000.00 Deduction under Chapter VIA Page 41 of PW51/DS (reported, assessed and not taxed) 31 200001 499949.00 20000.00 UTI Master gain sold (Pre Page 43 of PW51/DS check) Receipts from pre check assets - source of 32 5000.00 Kothari Pioneer Share sold (Pre Page 43 of PW51/DS funds / income.
check) 33 57000.00 Sub Total 34 12000.00 Deduction under Chapter VIA Page 46 of PW51/DS Deductions / Exemptions / Rebates 35 20000.00 Standard Deduction from salary Page 47 of PW51/DS (reported, assessed and 200102 247290.00 not taxed) 36 546437.26 Tax free interest, LIC Survival Page 42 of PW51/DS Tax free income 37 578437.26 Sub total 38 9000.00 Deduction under Chapter VIA Page 46 of PW51/DS Deductions / Exemptions (reported, 39 25000.00 Standard deduction from salary Page 47 of PW51/DS assessed and not taxed) 40 200203 641970.00 495669.00 Tax free interest, LIC Survival Page 47 of PW51/DS 41 4112661.00 Inheritance from late father's Item 1 to 9 chargesheet FDR 42 4642330.00 Sub Total 43 12000.00 Deduction under Chapter VIA Page 54 of PW51/DS Deductions / Exemptions/ Rebates 44 20000.00 Standard deduction from salary Page 55 of PW51/DS (reported, assessed and not taxed) 45 1001760.00 Tax free interest Page 55 of PW51/DS 200304 422130.00 46 108130.00 Inheritance from late father's Page 55 of PW51/DS Tax free income Bank a/c 47 45871.00 Honourarium Page 55 of PW51/DS 48 1187761.00 Sub Total 49 12000.00 Deduction under Chapter VIA Page 60 of PW51/DS Deductions / 50 30000.00 Standard Deduction from salary Page 61 of PW51/DS Exemptions/ Rebates 51 22941.00 Rental income deduction Page 61 of PW51/DS (reported, assessed and 200405 456911.30 not taxed) 52 5804.51 Long term gain on shares Page 61 of PW51/DS 53 730500.00 Tax free interest Page 61 of PW51/DS Tax free income 54 801245.51 Sub Total 55 200506 813610.00 22000.00 Deduction Under Chapter VIA Page 104 and 105 of Deductions / PW51/DW Exemptions / Rebates (reported, assessed and 56 20000.00 Standard deduction from salary Page 64 of PW51/DS not taxed) 57 94680.00 Rental Income deduction Page 64 of PW51/DS 58 695942.68 Tax free interest Page 64 of PW51/DS Tax free income 59 207000.00 LIC Survival Benefit Page 64 of PW51/DS CBI Vs. KC Aggarwal & Ors. CC No.01/13 Page 126 of 116 60 1039622.68 Sub Total 61 100000.00 Deduction under Chapter VIA 62 25200.00 Rental Income deduction 63 280702.00 Tax free interest income 200607 220115.00 64 405902.00 Total deduction As per ITR 65 474560.00 66 ONE - FOURTH = 220115 TILL 30.06.2005 CBI Vs. KC Aggarwal & Ors. CC No.01/13 Page 127 of 116 CC No.1/13 CBI Vs. KC Aggarwal & Ors.
RC No.34(A)/05
08.08.2014
Present : Sh. Naveen Giri, Ld. PP for CBI
All accused on court bail except A2.
A2 Saraswati Devi exempted vide order dtd. 03.03.3010. Vide separately announced judgment, all accused persons namely A1 Kamlesh Chandra Aggarwal, A2 Saraswati Devi, A3 Sheela Aggarwal and A4 Rajeev Chaudhary are acquitted of the charge u/Ss U/Sec.13(2) r/w 13(1)(e) of the POC Act; U/Sec.109 IPC r/w Sec. 13(2) r/w 13(1)(e) of the POC Act and U/Sec. 109 r/w Sec. 13(2) r/w 13(1)(e) of the POC Act, 1988 and Sec. 193 IPC in RC No. 34(A)/05.
Accused persons are on bail. Their surety bond is cancelled. Sureties are discharged. Original documents if any, may be returned back against proper acknowledgment.
In terms of section 437(A) Cr.P.C., all accused are directed to furnish bail bond in the sum of Rs.25,000/ each with one surety each in the like amount to appear before the Hon'ble High Court as and when court issues notice in respect of any appeal or petition filed against this judgment. Such bail bonds shall be in force for 6 months.
File be consigned to Record Room.
(Dinesh Kumar Sharma) Spl. Judge (PC Act), CBI : 08.08. 2014 CBI Vs. KC Aggarwal & Ors. CC No.01/13 Page 128 of 116