AI Drafter 
TaxTMI 
TaxTMI 
2024 (6) TMI 1045
X X X X Extracts X X X X
X X X X Extracts X X X X
....istered office at Shahadra, New Delhi. The Company was subsequently transferred to Kolkata with registered office at Chowringhee Road, Kolkata. 4. The appellant received reference letter dated 07.08.2017 from the Deputy Director, Income Tax (Investigation), Kolkata along with the details of the properties of Square Four Group and the source of the investment. The reference letter was sent after a search and seizure operation conducted on 03.02.2017 under section 132 of Income Tax Act, 1961. It was noted that M/s Danodia Investments and Finance Limited has raised capital through certain companies which were only on papers. The money received by M/s Danodia Investments and Finance Limited from shell companies was used to advance loan and investment to various other respondent entities. 5. At the time of search and seizure, the amount of loan to the tune of Rs. 27,81,47,180/- as on 31.10.2017 was found due against 20 entities of which details have been given in the impugned order. 6. In the enquiry, it was found that the money was induced in M/s Danodia Investments and Finance Limited through the shell companies and for that deposits were made even in cash. The funds were gen....
X X X X Extracts X X X X
X X X X Extracts X X X X
....Four Group Companies. The Record of M/s Danodia Investments & Finance Ltd. was recovered from the office of Square Four Group Companies. The benami properties in the hands of M/s Danodia Investment was used by 20 entities and individuals to their benefit and finding a case, the accounts were attached. However, the Adjudicating Authority has refused to confirm the attachment on the ground that M/s Danodia Investment Finance Ltd has advanced the loan to the Square Four Group Companies in the course of business and the record shows repayments of the loan amount by the Square Four Group Companies and in any case, the loan advanced to those companies was not by way of benami transaction because its source was known. The advances were made by the M/s Danodia Investment to Square Four Group Companies largely through bank transaction. Hence, not only the sources were known, but even the transfer of money was by the proper channel, thus, it could not have been taken to be the case of benami transaction. 11. The learned counsel for the appellant has submitted that the Adjudicating Authority failed to consider that money with the M/s Danodia Investment Finance Ltd. was out of benami transa....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... w.e.f. 1st November, 2016. The case in hand does not fall under section 2 (9) (D) because loan advanced to the 20 entities by M/s Danodia Investment Finance Ltd. was by disclosed sources and thereby the transaction was not falling in the definition of "benami transaction" as defined by the Amendment in the Act of 1988. 14. The appellant even failed to place on record any material to show that M/s Danodia Investment Finance Ltd. was owned and run by Square Four Group Companies, rather the material on record would prove that M/s Danodia Investment Finance Ltd. is a separate entity and having their own Director. If investment was made by M/s Danodia Investment Finance Ltd in favour of 20 entities by way of loan, it could not have been reckoned to be the case of benami transaction. 15. Thus, for all the reasons given above and supporting the impugned order, the learned counsel for the respondents prayed for dismissal of the appeal. 16. We have considered the rival submission and perused the records carefully. The facts on record shows that M/s Danodia Investments & Finance Limited was incorporated on 26.09.1994 with ROC, Delhi. It was subsequently transferred to Kolkata, ROC.....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... M/s Danodia Investments & Finance Ltd was found. It was stated by him that in the year of 2014-15, around Rs. 16 crore were transferred to 26 Companies of Nature Group from the bank account of ICICI bank. Later on, those funds came back to M/s Danodia Investments & Finance Ltd in Andhra bank. The Funds were then transferred to various Square Four Group Companies who are the beneficial owners of the benami transaction. It was also stated that Ganesh Kumar Singhania is a key person of Square Four Group. The statement further revealed that in the financial year 2008-09, bogus share capital was generated in M/s Danodia Investments & Finance Ltd when shares were allotted at the premium of Rs. 990/- per share, however the allocation was only on paper. The Company was not as such doing any business and the money was pumped in by issuing shares on papers on a premium of Rs. 990/-. In the year 2013, he took the Company and in the year 2014-15, sold it to the Square Four Group. It was admitted that source of fund was un-accounted cash of Square Four Group which was pumped in through layering by various companies. 22. The statement of Sunil Kumr Modi was also recorded and he had corrobora....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ransferred to different companies thereupon in the year 2010. 28. The aforesaid is relevant and the statement of the aforesaid is reproduced hereunder for ready reference: - Date of Allottment Name of Share Allottee No. of Shares {A} Face Value {B} Premium Per Share {C} Total Amount {A*(B+C)} 29.01.2009 H B RETAILS PVT LTD 40,000.00 10.00 990.00 40,000,000.00 29.01.2009 HIMANI DEVELOPERS PVT LTD 40,000.00 10.00 990.00 40,000,000.00 29.01.2009 P R VYAPAAR PVT LTD 30,000.00 10.00 990.00 30,000,000.00 29.01.2009 SHUBH INDUSTRIES PVT LTD 35,000.00 10.00 990.00 35,000,000.00 29.01.2009 VIRGIN CAPITAL SERVICES PVT LTD 20,000.00 10.00 990.00 20,000,000.00 29.01.2009 ZENITH AUTOMOTIVE PVT LTD 25,000.00 `10.00 990.00 25,000,000.00 31.03.2009 MAHAK INFRASTRUCTURE PVT LTD 16,800.00 10.00 990.00 16,800,000.00 31.03.2009 SHUBH INDUSTRIES PVT LTD 33,300.00 10.00 990.00 33,300,000.00 The shares so issued were par....
X X X X Extracts X X X X
X X X X Extracts X X X X
....sh deposit and layering by paper transaction as per the fund trail is summarized and given as under: Summarized Details of source of cash deposit accounts and layering paper concerns as per fund trail and other investigations: LIST OF PAPER / SHELL CASH DEPOSIT ACCOUNTS: Sl. No. Party Name Bank Name Bank Account No. Remarks 1 GAYATRI ENTERPRISES DCB BANK 08922700001458 Cash Deposit Account 2 SANWARI CREATION DCB BANK 08922700001519 Cash Deposit Account 3 MANORAMA FASHION DCB BANK 08922700001465 Cash Deposit Account 4 BAJRANG TRADERS DCB BANK 08922700001526 Cash Deposit Account 5 RAJEEV KUMAR DCB BANK 08922700001939 Cash Deposit Account 6 YADUKA AGROTECH PRIVATE LIMITED DENA BANK 005813023763 Cash Deposit Account 7 YADUKA AGROTECH PVT LTD DENA BANK 005813023763 Cash Deposit Account 8 SANWARI CREATION DCB BANK 08922700001519 Cash Deposit Account 9 MANORAMA FASHION DCB BANK 08922700001465 Cash Deposit Account 10 ROSEMARY VINCOM PVT LTD DCB BANK 08940200001571 Cash Deposit Account 11 WESTERN TRADING ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... DCB BANK 08921900028653 Layering Paper concern 12 SUNFLOWER MERCHANTS PVT LTD AXIS BANK 914020016747702 Layering Paper concern 13 GURU UDYOG PVT LTD ICICI BANK 605026429 Layering Paper concern 14 FRESHLIGHT AGROTECH PRIVATE LIMITED (Formerly PARICHAY EMPORIUM PVT LTD) IDBI Bank - Layering Paper concern 15 SAFELINE BUILDERS PVT LTD IDBI BANK 0196102000017356 Layering Paper concern 16 VASUNDHARA DEALMARK PVT LTD IDBI BANK 0060102000131728 Layering Paper concern 17 RIMJHIM VINCOM PVT LTD IDBI Bank 0060102000130073 Layering Paper concern 18 ENHANCE DEALMARK PRIVATE LIMITED IDBI Bank 0060102000132459 Layering Paper concern 19 BLUEJAY AIRLINES PVT LTD IDBI BANK 0060102000106597 Layering Paper concern 20 ANGIRA DISTRIBUTORS PVT LTD IDBI BANK 0263102000010469 Layering Paper concern 21 WEBSTAR VYAPAAR PVT LTD IDBI BANK 0263102000010548 Layering Paper concern 22 SUCHITA BAJORIA IDBI BANK 0263104000076474 Layering Paper concern 23 LAUREL TRADECOM PVT LTD IDBI BANK 0060102000130806 Layer....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... `IDBI Bank 02631024000006484 Layering Paper concern 49 LONGVIEW DEALCOM PVT LTD IDBI Bank 0060102000130172 Layering Paper Concern 50 SALASAR SUPPLIERS PVT LTD IDBI Bank 0060102000130165 Layering Paper concern 51 MULBERRY TRADELINKS PVT LTD IDBI Bank 0060102000132794 Layering Paper concern 52 BEMISAL INFRA PVT LTD IDBI Bank 0060102000129909 Layering Paper concern 53 AGON REALESTATE PVT LTD IDBI Bank 0060102000130370 Layering Paper concern 54 PRANCHAL AGRO INDUSTRIES PVT LTD IDBI Bank 0060102000130813 Layering Paper concern 55 OVERTOP TRADERS PRIVATE LIMITED STATE BANK OF INDIA 34422908953 Layering Paper concern 56 ENHANCE DEALMARK PRIVATE LIMITED IDBI Bank 0060102000132459 Layering Paper concern 57 HIBISCUS TRADELINKS PVT LTD IDBI Bank 0060102000130936 Layering Paper concern 58 BUTTERCUP DEALCOM PVT LTD IDBI Bank 0060102000130967 Layering Paper concern 59 SHAKTIMATA DEALCOM PRIVATE LTD IDBI Bank 0060102000131551 Layering Paper concern 60 ENHANCE DEALMARK....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ies have appeared to confront the facts regarding the transfer of the funds in M/s Danodia Investments & Finance Ltd. The appellant have prepared the statement of 79 such entities with their status and is relevant for this case. The statement aforesaid is quoted hereunder for ready reference:- Sl Name PAN Address A.Y. 2016-17 {ROI} A.Y. 2015-16 {ROI} A.Y. 2014-15 {ROI} A.Y. 2013- 14 {ROI} A.Y. 2012-13 {ROI} A.Y. 2011-12 {ROI} A.Y. 2010-11 {ROI} 01 YADUKA AGROTECH PVT LTD(Formerly SAUMYA AGROTECH Pvt Ltd) AAKCS5078B 29A,WESTON STREET ROOM NO.C- 5, 3RD FLOOR KOLKATA Kolkata WB 700012 IN NOT FILED 0 0 0 0 114750 68990 A company managed operator income There is funds accommodation lacks creditworthiness transactions 02 ROSEMARY VINCOM PVT LTD AAFCR1320Q 29A, WESTON STREET 3RD FLOOR KOLKATA Kolkata WB 700012 IN NOT FILED 0 2320 0 0 0 NOT FILED A company managed operator through Shailesh or negligible concern and creditworthiness above transact....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ADCB6733D 35, Ganesh Chandra Avenue 3rd Floor Kolkata Kolkata WB 700013 IN NOT FILED 0 0 0 0 0 6154 A company managed operator through income and not The genuineness carry out 12 NESTER TRADING PRIVATE LIMITED ( Formaly known as DISHAYEN LEASING PRIVATE LIMITED) AAACD0194R H-96-KH NO- 21/6 ADYAPAK NAGAR NANGLOI North West DELHI North West DL 110041 IN 0 0 0 5940 65830 309542 297692 A company managed operator through income and not The genuineness carry out 13 PEARL VINTRADE PVT LTD AAECP9437D 35, Ganesh Chandra Avenue 3rd Floor Kolkata Kolkata WB 700013 IN 0 0 0 0 0 0 5667 A company managed operator through income and not The genuineness carry out 14 STARLIGHT DEVCON PVT LTD AAMCS7290P 70/B, 2nd Floor,Lenin Sarani Kolkata Kolkata WB 700013 IN 99990 95760 377460 325460 191700 24445 0 A company concern and creditworthiness above transact....
X X X X Extracts X X X X
X X X X Extracts X X X X
....VATE LIMITED AACCE6121F 112,JAIGIRGH AT ROAD,THAK URPUKUR NEAR- KAILASHPA L VIDYALAY/ DARGAHA CLUB KOLKATA Kolkata WB 700063 IN NOT FILED 0 2620 0 0 0 NOT FILED A company managed operator through income and not The genuineness carry out 23 ANGIRA DISTRIBUTORS PVT LTD AAFCA5179A Ganesh Complex,NH- 6, Bombay road, raghudevpur, P.O. Panchla, Howrah Uluberia Howrah WB NOT FILED 19830 103580 29150 54630 896 1050 A company managed operator through income The genuineness carry out 711322 IN 24 WEBSTAR VYAPAAR PVT LTD AAACW6180G Ganesh Complex,NH- 6, Bombay road, raghudevpur, P.O. Panchla, Howrah Uluberia Howrah WB 711322 IN NOT FILED 0 0 0 0 0 0 A company managed operator through income The genuineness carry out 25 AURAL TRADECOM PRIVATE LIMITED ( Formaly known as LAUREL T....
X X X X Extracts X X X X
X X X X Extracts X X X X
....hiness above transactions 32 ENHANCE DEALMARK PVT LTD AACCE6121F 112,JAIGIRGH AT ROAD,THAK URPUKUR NEAR- KAILASHPA L VIDYALAY/ DARGAHA CLUB KOLKATA Kolkata WB 700063 IN NOT FILED 0 2620 0 0 0 NOT FILED A company managed operator through income and not The genuineness carry out 33 HIBISCUS TRADELINKS PVT LTD AACCH5831K 29A, WESTON STREET, 3RD FLOOR, KOLKATA Kolkata WB 700012 IN NOT FILED 0 700 0 0 0 NOT FILED A company managed operator through income The genuineness carry out 34 BUTTERCUP DEALCOM PVT LTD AAECB4185E 29A, WESTON STREET 3RD FLOOR, ROOM NO. C5 KOLKATA Kolkata WB 700012 IN NOT FILED 0 3240 0 0 0 NOT FILED A company managed operator through income The genuineness carry out 35 ROSEMARY VINCOM PVT LTD AAFCR1320Q 29A, WESTON STREET 3RD FLOOR KOLKATA Kolkata WB 700012 IN NOT FILED 0 2320 &nbs....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... 0 0 0 0 0 101952 57467 A company managed operator through income The genuineness carry out 43 BLUEBELL TRADECOM PVT LTD AAECB4184F 44, S.N.BANERJE E ROAD BARRACKPO RE KOLKATA Kolkata WB 700020 IN NOT FILED 0 3580 5530 0 0 NOT FILED A company managed operator through income and not address& post. The genuineness carry out 44 ROSEBUD DEALMARK PRIVATE LIMITED AAFCR1321R 112,JAIGIRGH AT ROAD,POST, THAKURPUK UR NEAR- KAILASHPA L VIDYALAY/ DARGAHA CLUB KOLKATA Kolkata WB 700063 IN NOT FILED 0 3260 0 0 0 NOT FILED A company managed operator through income and departmental identity, creditworthiness transactions 45 AGON REAL ESTATES PVT 9/12 LAL BAZAR NOT FILED NOT FILED NOT FILED NOT FILED NOT FILED NOT FILED NOT FILED An entity off company LTD AALCA0060A STREET, 3RD FLOOR KOLKATA Kolkata WB 700001 IN &nb....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ineness carry out 53 PRANCHAL AGRO 11, RAMLAL MUKHERJEE 0 0 1130 0 0 0 NOT FILED A company managed INDUSTRIES PVT LTD AAFCP8452M LANE HOWRAH HOWRAH Howrah WB 711106 IN operator through income and not The genuineness carry out 54 OVERTOP TRADERS PRIVATE LIMITED AACCO0166A 7 PRAFULLA SARKAR STREET KOLKATA KOLKATA Kolkata WB 700072 IN NOT FILED 0 NOT FILED NOT FILED NOT FILED NOT FILED NOT FILED A company not filer address. genuineness carry out 55 ENHANCE DEALMARK PRIVATE LIMITED AACCE6121F 112,JAIGIRGH AT ROAD,THAK URPUKUR NEAR- KAILASHPA L VIDYALAY/ DARGAHA CLUB KOLKATA Kolkata WB 700063 IN NOT FILED 0 2620 0 0 0 NOT FILED A company managed operator through income and not address& post. The genuineness carry out 56 HIBISCUS TRADELINKS PVT LTD AACCH5831K 29A, WESTON STREET, 3RD FLOOR, KOLKATA Kolkata WB 700012 IN....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... MARLIN CHAMBER 1 CROOKED LANE, 3RD FLOOR, ROOM NO - 334 KOLKATA Kolkata WB 700069 IN NOT FILED NOT FILED NOT FILED NOT FILED NOT FILED NOT FILED NOT FILED An entity not filer. genuineness carry out 65 NEXTEL HEIGHTS PVT LTD AAECN4302K 187, RABINDRA SARANI KOLKATA Kolkata WB 700001 IN NOT FILED NOT FILED NOT FILED NOT FILED NOT FILED NOT FILED NOT FILED An entity not filer. genuineness carry out 66 SANDARBH DEALERS PVT LTD AATCS7095K 6 MILAN PALLY D P NAGAR BELGHORIA, LP59/23/4 KOLKATA Kolkata WB 700056 IN NOT FILED NOT FILED NOT FILED NOT FILED NOT FILED NOT FILED NOT FILED An entity non filer address. genuineness carry out 67 FRESHLIGHT APPARELS PRIVATE LIMITED AACCF4009M 29A, Weston Street 3rd Floor Kolkata Kolkata WB 700012 IN 0 12240 NOT FILED NOT FILED NOT FILED NOT FILED NOT FILED An entity non filer address. genuineness carry out 68 ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ds in the hands of 20 beneficiaries was out of the benami property in the account of M/s Danodia Investments & Finance Ltd. 35. The reference of section 2 (8) defining the "benami property" would be relevant in this case which includes a property which is subject matter of Benami Transaction and even the proceeds from such property. Section 2(8) of the Act is quoted hereunder:- 2. Definitions.- In this Act, unless the context otherwise requires,- (8) "benami property" means any property which is the subject matter of a benami transaction and also includes the proceeds from such property; 36. The Adjudicating Authority refused to confirm the order of attachment mainly on the grounds that the funds came to the beneficiaries as a loan or advances and were released by M/s Danodia Investments & Finance Ltd. through bank or proper banking channel. 37. The Bank account of the transaction was supporting the aforesaid and thereby it cannot be said that M/s Danodia Investments & Finance Ltd was a non-existing Company and otherwise the loan or advances was not by way of benami transaction. 38. The finding aforesaid is in ignorance of the benami transaction. The A....