TaxTMI 
TaxTMI 
2019 (11) TMI 534
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.... CASEOF RESPONDENT:- A. It is the case of the Respondent that it had received information from ADIT (Inv.), Unit 2(2), Mumbai vide letter No. ADIT(Inv.)/Unit-2(2)/Benami Property/2017-18 dated 27.10.2017 that M/s. Divine Spirit Infra Projects Private Limited (hereinafter referred to as "M/s. DSIPL") in Financial Year 2015-16, has made investments in real estate projects of four entities namely:- i. M/s. Star Landcraft Pvt. Ltd., ii. M/s. Crest Promoters Pvt. Ltd., iii. M/s. Ace Infracity Developers Pvt. Ltd. and iv. M/s. Starcity BuildconPvt. Ltd., and payment of Rs. 43,79,29,306/- has been made by M/s. DSIPL till 28.07.2017 in respect of these investments. On enquiry, it was established thatall the four entities are having commonshareholders/directors/management and they are part of ACE group of companies. B. It is alleged that M/s. DSIPL have invested in the real estate projects/properties situated at Noida/Greater Noida region, the details of which are mentioned below: Sl. No. Description of the properties Beneficiary Value of illicit investment 1. Flat no. 5052, 5053, 5054, 5061, 5062, 5063, 5064, ....
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....l/low paid up capital, high share premium/unsecured loans/ comparatively high trade payable v/s turnover, nil or low turnover as well as nil/meagre return of income and large credits in bank account immediately followed by debits of equivalent amount. The source of investment by these creditor companies is through high security premium or unsecured loans or trade payable. In order to determine the credit worthiness of the creditor companies‟ financial statements including bank statements of these companies were enquired into. Perusal of the bank statements revealed that the source of credits in their bank accounts was from a complex web of entities all of which are in the nature of shell entities with no business activity. Detail of major part of money received by M/s. DSIPL from such few companies during F.Y. 2015-16 which has been used to make investments in the projects of the above mentioned four companies of the ACE group of companies is as under: Name of the Company Amount advanced to M/s. DSIPL (in Rs.) TACTFULL INVESTMENTS LIMITED 154650000 VIKRUTI VINIMAY PRIVATE LIMITED 97900000 CENTRON INFRA PROJECTS PRIVATE LIMITED 64430000 SANS....
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....nsecured loan, share capital, bogus sale of shares, etc. 3. It is contended by the Respondent that the creditor entities of M/s. DSIPL which has advanced funds to M/s. DSIPL, have no genuine funds of their own available with them. These companies are merely shell entities and have been used as conduit to route back unexplained funds of Ace group of companies into M/s. DSIPL which in turn invested these funds into projects of four companies of the Ace group. 4. Based on the above facts, the Respondent has come to a conclusion that M/s. DSIPL is a "Benamidar" and the appellants as "Beneficiaries". CASE OF THE APPELLANT:- 5. On the other hand, the Appellants have attacked the order passed by the Initiating Officer on several grounds including the ground that the Initiating Officer has no territorial jurisdiction to investigate the matter. It is the case of the Appellants that the Respondent i.e. Initiating Officer, Deputy Commissioner of Income Tax, (BPU-1), Mumbai, had illegally assumed jurisdiction in the matter. In this regard the Appellants have relied on the Standard Operating Procedure, issued by the Central Board of Direct Taxes (CBDT). The Standard Operating Proced....
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.... have gone through the material available on record and also heard the learned counsels for both the parties. The Appellants have raised several factual and legal issues while assailing the impugned order as well as the reference. If this Tribunal is holding that the Initiating Officer/Respondent had no jurisdiction to investigate/refer the matter to the Adjudicating Authority then there is no need of examining other issues. Therefore, we have taken up the issue of jurisdiction of the Initiating Officer to initiate the investigation as well as referring the matter to the Adjudicating Authority. 11. The Central Board of Direct Taxes (CBDT) issued notification in S.O. 1621(E) dated 18.05.2017in exercise of Powers conferred under sub-section (2) of Section 28 read with Section 59 of Prohibition of Benami Property Transactions Act, 1988, wherein the territorial jurisdiction of Joint Commissionerof Income-Tax/Additional Commissioner of Income-Tax (Benami Prohibition), Unit-1, Mumbai has been defined. According to the said notification, these authorities are having territorial jurisdiction in the areas within the limits of the Municipal Corporation of Greater Mumbai and Navi Mumbai. W....
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....ion Division of CBDT in F. No. 414/63/2016-IT (Inv.I) dated 10.08.2017. This SOP was issued prior to the issue of Show Cause Notice under Section 24(1) of the PBPT Act, 1988. In the said SOP at Para No.4 the jurisdiction of I.O., Approving Authority and Administrator has been defined. The same is reproduced below: "4. Jurisdiction of the IO, Approving Authority and Administrator: Section 3(1) of Prohibition of Benami Property Transactions Act, 1988 states that no person shall enter into any benami transaction. The scheme of the Act revolves around consequences of violation of this section. It is, therefore, appropriate that the jurisdiction is assumed by a BPU when any of the 3 limbs viz. benami transaction/property, benamidar or beneficial owner falls under its assigned territorial jurisdiction. In cases where the benami property/transaction, beneficial owner and/or benamidar are located in territorial jurisdictions of different BPUs, the BPU from which the first show cause notice u/s 24 of Prohibition of Benami Property Transactions Act has been issued shall assume jurisdiction over the case and shall intimate the other BPUs concerned regarding assumption of jur....