In the recent ruling the High Court of Andhra Pradesh dismissed a revision petition filed by the assessee for misrepresentation of financial facts in his tobacco business.
Vaddempudi Sivannarayana,petitioner -assessee, had filed an Insolvency Petition under section 10 of the Provisional Insolvency Act, seeking to be declared insolvent due to heavy business losses incurred in his tobacco trade.
He claimed that he had borrowed loans from the respondents by executing promissory notes and other documents but had no income-earning properties to repay these debts. The petitioner argued that, because of these losses, he had no means to clear the dues, prompting the filing of the Insolvency Petition.
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The 1st respondent, however, contested the petition, alleging that the petitioner had suppressed details about his properties with the intent to avoid debt repayment. The 1st respondent also asserted that, except for the petitioner’s debt, the other debts listed in the Insolvency Petition were fictitious. It was further claimed that the petitioner had mortgaged his properties with Pinakani Grameena Bank, which were redeemed later, thus negating the need for an insolvency declaration.
The Trial Court, after reviewing the evidence presented by the petitioner and the 1st respondent, concluded that the assessee had no income-earning properties. However, despite the 1st respondent’s submission of evidence showing that the assessee had mortgaged land and redeemed a loan, the Trial Court ruled in favor of the assessee declaring him insolvent.
The 1st respondent then appealed the decision in the District Court, Ongole, where the Appellate Court reversed the Trial Court’s decision. The Appellate Court found that the assessee had failed to produce credible evidence to support his claims of conducting tobacco business. It was revealed that the assessee had merely grown tobacco on his own land and did not present any documentation, such as a business license or proof of sales.
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The Appellate Court also highlighted that the petitioner had suppressed material facts, including his ownership of land and his discharge of a loan with Pinakani Grameena Bank. The Appellate Court set aside the Trial Court’s order, and the revision petition challenging this decision was dismissed.
A single member bench comprising T.C.D. Sekhar(Justice) dismissed the revision petition filed by the petitioner, concluding that the petitioner had approached the court with unclean hands and that the appeal lacked merit.
In short,the revision petition filed by the assessee was dismissed.
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