Mesne profits and interest thereon received under the direction of the Civil Court is revenue receipt and is liable to tax u/s. 23(1) of the Income Tax Act

The real issue that needs consideration in the present appeal is whether the mesne profits, and interest on mesne profits, received by the appellant constituted revenue receipt, or capital receipt, in the hands of the appellant/assessee, in the facts and circumstances of the case.[Para No.40]

    Having heard the submissions of learned counsels for the parties and having given our due consideration to them in the light of the decisions relied upon by the learned counsels,

we are of the view that the mesne profits, and interest on mesne profits, received by the appellant in pursuance of the court decree, in the facts of the present case, constitute revenue receipt.[Para No.41]

    When we apply the said test to the facts of the present case, the only conclusion that we can draw is that the receipt of mesne profits and interest thereon by the appellant/assessee, was a revenue receipt. The capital asset of the appellant i.e. the property in question was earning revenue for the appellant by way of rent till so long as the lease subsisted. After the termination of the lease, the erstwhile tenant continued to occupy the premises unauthorisedly. It is in lieu of the rent which the appellant would have otherwise derived from the tenant, that the mesne profits and interest thereon have been awarded. So far as the capital asset of the assesse is concerned, the same has remained intact. It is not the appellants case that there was any damage to the property/ capital asset inasmuch, as, the building structure was damaged by the bank, and that damages have been awarded by the Court on account of such physical damage. Even the title of the appellant in respect of the capital asset remained intact. Had it been a case where the capital asset would have been subjected to physical damage, or of diminution of the title to the capital asset, and damages would have been awarded under the head, there would have been merit in the appellant's claim that damages received for harm and injury to the capital asset, or on account of its diminution, would be a capital receipt.[Para No.46]

At the time of taking cognizance on chargesheet, Magistrate is not supposed to act as a Post Office

At the time of consideration of charge Magistrate can take into consideration certain facts and documents pointed out and/or submitted by or on behalf of accused 

Filing of Civil Suit for redressal of damages does not bar a person from initiating a criminal case involving ingredients of criminal offence entitling plaintiff/complainant to initiate criminal case against the offender

    It is settled that at the time of taking cognizance of offence, it is not necessary for the Magistrate to find out as to whether trial is clearly going to culminate into conviction of accused or not, but the Magistrate has only to see whether there is prima-facie evidence on record so as to construe that there is possibility of commission of offence by the accused and even if there is evidence raising suspicion of commission of offence by accused the cognizance can be taken by the Magistrate and thereafter the accused has a right to put his version before the Court on the basis of evidence on record at the time of framing of Charge.[Para No.15]

    Parameters to be taken into consideration by the Court at the time of framing of charge are altogether different than that to be taken into consideration at the time of taking cognizance. At the time of taking of cognizance, Magistrate has to look into that material only which is placed before him by the Prosecution/Investigating Agency, but at the time of consideration of charge Magistrate can take into consideration certain facts and documents pointed out and/or submitted by or on behalf of accused and thereafter he can take a decision as to whether there is sufficient material for framing of charge or not. Recently this Court in case Siemens Enterprise Communications Pvt.. Ltd. now known as Progility Technologies Pvt. Ltd. vs. Central Bureau of Investigation, reported in 2019 (3) Shim. LC 1691, on the basis of ratio of law propounded by the Apex Court in its various pronouncements, has reiterated the power of the Magistrate as well as parameters to be taken into consideration at the time of framing of charge. It is also settled that at the time of undertaking such exercise at the time of framing of charge the Magistrate is not supposed to conduct a mini trial at the stage of framing of charge and not to appreciate evidence as warranted at the stage of conclusion of trial, but he has power to evaluate material and the documents on record alongwith material being referred by the accused if the said parameter confirms to the parameters laid down by the Apex Court reiterated in Siemens' case supra. Whereas at the stage of taking cognizance, as already stated supra, on consideration of material placed before Magistrate by prosecution/investigating agency, even if there is evidence raising suspicion of commission of offence by accused the cognizance can be taken.[Para No.16]

    No doubt, the evidence or material placed before the Magistrate, at the time of taking cognizance, is not to be evaluated on merit, but definitely it is duty of the Court to see as to whether some evidence is available on record or not.

In case, there is no evidence on record to indicate commission of alleged offence(s), the Magistrate is not supposed to act as a Post Office, but is expected to apply his judicial mind according to facts and circumstances of the case for accepting or rejecting the challan/report filed before him under Section 173 Cr.P.C.[Para No.17]