TaxTMI 
TaxTMI 
TaxTMI 
2024 (10) TMI 585
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....ng the total sale consideration of 185,68,96,500/- U/s 68 of the Income Tax Act, 1961. 3. On the facts and in the circumstances of the case as well as in law the Ld. Commissioner of Income Tax (Appeals) grossly erred in upholding the allegations and action of Ld. Assessing Officer in:- a. Alleging that the appellant is the conduit company of S. K. Jain group for providing accommodation entry. b. Misinterpretating and observing the facts of preceding years having no bearing on the facts of the year under consideration. c. Alleging that the company whose shares were purchased are Paper Company and Conduit Company of S. K. Jain Group for providing accommodation entry. d. Alleging that the buyer of shares is paper/conduit Company of S.K. Jain Group and sale price is fixed to avoid the tax. 4. On the facts and in the circumstances of the case as well as in law the Ld. Commissioner of Income Tax (Appeals) grossly erred in confirming the action of Ld. Assessing Officer of:- a. Rejecting the purchase of shares made in earlier years disclosed as stock in trade and accepted as genuine in earlier years after scrutiny assessment U/s 143(3) of the Income Tax Act, 1961. b. Using ....
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....essee has shown loss of Rs. 20,59,93,500/-. These companies were used for laundering unaccounted money for providing accommodation entries to the beneficiaries appeared in the list of 99 companies admitted by Sh. S.K.Jain and Sh. V.K.Jain as paper companies which have been upheld by the Hon'ble ITAT and Income Tax Settlement Commission (Please refer Para 3.4.1 of the assessment order) wherein name of these companies appeared at various serial Nos. The appellant/assessee has shown purchases and sales of the shares of (i) Dewan Motors Investment & Finance Ltd., (ii) Geo Loan Plans India Ltd., (iii) Lunar Gold International Pvt. Ltd. and (iv) Mekaster Finlease Ltd. The shares of these four companies were purchased in 2010 at a price ranging from Rs. 100 to Rs. 300 per share that two on a single day on 31.03.2010 for aggregate purchase value of Rs. 139.95 Crores whereas net worth of these companies as on 31.03.2010 was very nominal as detailed on page No. 3 to 07 of the assessment order. All these four companies were having negative net worth as mentioning Para 3.2 of the assessment order. 4. The share of these companies whose net worth were negative, were purchased on premium by the ....
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....4. However, most of the times, either none attended from the appellant/assessee side or sought adjournments only on one reason or another. We heard the Commissioner of Income Tax, Departmental Representative (hereinafter, the 'CIT- DR') at length. Due to consistent non-prosecution from the appellant/assessee side for more than 3 & 1/2 years, we have no option except to decide this case after hearing the CIT-DR. Accordingly, we proceeded with. 6. None attended on behalf of the appellant/assessee. The Ld. CIT-DR reiterated the finding of the Ld. CIT(A) wherein it was categorically held that all these companies whose shares were purchased and sold by the appellant/assessee were found bogus in nature and therefore, these are nothing but the incomes of the assessee. The Ld. CIT-DR placed emphasis on the finding of the decision of the Co-ordinate Bench in the case of one of the companies Vijay Conductors India Pvt. Ltd. ITA No. 3484/Bel/2013, A.Y. 2008-09, order dated 28.01.2015, wherein it has been held that Shri S.K.Jain and Sh. V.K.Jain were involved in providing accommodation entries through group concerns/companies. The finding of the Ld. CIT(A) in this regard in para 6.13 to 6.14 ....
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....m. He has further submitted that the original owners of unaccounted funds regain control over their entities by subsequent transfer of shares at a drastically discounted price in the names of close relatives/associates of the promoters/directors. He has further submitted that the full cycle of activities is clearly visible in the case of companies controlled by Jain Brothers (petitioners herein) and M/s Jagat Projects Ltd. with the mediation of Rajesh Aggarwal, Chartered Accountant. 22. The learned ASG has further submitted that M/s Jagat Projects Ltd, have converted its unaccounted money to the tune of Rs. 64.70 Crore into apparently legitimate transactions by way of share subscription by various companies. He has further submitted that this illegal activity related to the scheduled offence have generated property involved in money laundering to the extent of Rs. 64.70 Crore which was further invested by M/s Jagat Projects Ltd. into their sister concern M/s Divine Infracon Pvt. Ltd. for construction of hotel, (now managed by Radisson Blu) at Plot No. 4, Sector-13, Dwarka, New Delhi. 23. The learned ASG has further submitted that Jain Brothers have received funds of Rs. 62.20 C....
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....nsactions in the beneficiary company. In this process Jain Brother earned money as a certain percentage of the unaccounted money converted into share premium. Jain brothers have received funds of Rs. 62.20 Crore in advance from M/s Jagat Projects Ltd. through Rajesh Aggarwal, Chartered Accountant and placed the funds, pertaining to M/s Jagat Projects Ltd., from the accounts of various firms into the account of M/s Tulika Securities Pvt. Ltd., for layering and then these funds were transferred to 26 companies for final investment into M/s Jagat Projects Ltd. For the entire process of receiving funds pertaining to M/s Jagat Projects Ltd, in the accounts of various firms and from there into the account of M/s Tulika Securities Pvt. Ltd. for layering and then transferring to the accounts of their 26 companies for final investment into M/s Jagat Projects Ltd. the petitioners have received commission to the tune of Rs. 1,11,96,000/- through their companies for converting unaccounted money of Rs. 62.20 Crore belonging to M/s Jagat Projects Ltd. into their share capital/premium. Thus, the petitioners have directly attempted to indulge and knowingly assisted an actually Involved in the proc....
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..... dated 21.07.2017 in which it has been held that when complying with a requirement of Section 45 of PMLA, the High Court should not have granted the bail. By this order the Hon'ble Supreme Court had set aside the order of granting the bail passed by the High Court. The respondent/Department would also placed reliance on a judgment of a High Court of Karnataka passed in S.C. Jayachandra vs. Enforcement Directorate, Banglore; MANU/KA/0456/2017. 27. The Karnataka High Court discussed in detail as to whether the judgment of Punjab and Haryana High Court in Gorav Kathuria (supra) would be constituted as having binding effect within the meaning of Article 141 of the Constitution of India. After considering several judgments on this aspect, the Court came to the conclusion in para 30 of the judgment that Gorav Kathuria (supra) case cannot be treated as a binding precedent and further held that the pronouncement in Gautam Kundu (supra) was still the good law, so far as the question regarding limitations prescribed in Section 45 (1) of PMLA are concerned, in the said judgment, it has also been noticed that in Gorav Kathuria (supra), Union of India was neither present and hence could ....
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....itioners were brought back into the accounts of M/s Jagat Projects Limited in a laundered firm. Thus it is a most blatant case of Money Laundering. It is in these circumstances that the respondent/Enforcement Directorate had commenced the investigation under PMLA and having found unimpeachable material in the course of its investigation, eventually instituted the statutory complaint before the Special Court. The cognizance has already been taken in respect of PMLA complaint on 03.07.2017. In fact a bail application was filed before the Special Court also, which has been dismissed with a detailed reasoning vide order dated 02.05.2017. 30. It is further submitted that there is no change of circumstances. Since the time the bail was refused and in fact the special court had all the material available to it while adjudicating upon the said bail applications. As regards the argument of the ECIR wrongly been initiated for the reason that on 11.02.2017, the Court had not taken cognizance on the complaint filed by SFIO under the schedule offence the same is also incorrect because there is no requirement in law that for initiating an inquiry or investigation under PMLA the Court should ha....
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.... 439 Cr.P.C. are arising from ECIR/01/DLZO-11/2017, under Sections 3 & 4 of Prevention of Money Laundering Act, 2002 on the basis of Criminal Complaint No. 57463 of 2016. The allegations made in ECIR/01/DLZO-11/2017 at para 7.3 is that M/s Jagat Projects Ltd. with the help of Chartered Accountant Rajesh Aggarwal and other accused persons as shown in ECIR/01/DLZO-11/2017 dated 11.02.2017 were involved in money laundering activities wherein M/s Jagat Projects Ltd. succeeded in laundering its unaccounted income through a set of companies controlled by the petitioners in the guise of share subscription money at a huge premium to the tune of Rs. 64.70 Crore during the financial year 2008-09. The entire share subscription (including the share premium) of Rs. 64.70. Crore has been held to be unexplained cash credit under Section 68 of the Income Tax Act in the hands of M/s Jagat Projects Ltd. 33. Further M/s Jagat Projects Ltd. failed to explain the payment of Rs. 1,16,46,000/- Crore @ 1.80% on the total accommodation entries of Rs. 64.70 Crore made to the petitioners for securing accommodation entries has been an unexplained expenses incurred during the assessment year 2009-10. The all....
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....s Ltd. at a high price, L.e. Premium of Rs 390/- per share on share of Rs. 10/- each per share with buy back guarantee and later on as per advice/direction of Rajesh Aggarwal, Chartered Accountant those shares were transferred to the companies of the persons/associates of M/s Jagat Projects Ltd. at a nominal price of Rs. 10-12/- per share; that due to this activity of buying shares at premium and selling the same at nominal price, their holding companies have made huge losses in the books of account but in actual the said amount has already been received by their companies in advance against the sale of shares from the beneficiary/mediator Rajesh Aggarwal, Chartered Accountant and all these transactions are duly recorded in books of account of respective companies. 36. Further, out of the 30 companies 26 companies belongs to the petitioner- Surendera Kumar Jain and the aforesaid 26 companies invested a sum of Rs. 62.20 Crore in the share capital of M/s Jagat Projects Ltd. @ premium of Rs. 390/- per share of Rs. 10/- each share. It further reveals that the said 26 companies which made investment in share capital of M/s Jagat Projects Ltd. through Rajesh Aggarwal, Chartered Account....
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.... 2005-06 to 2011- 12 and of Sh. Surendra Kumar Jain in ITA No. 6998 to 7004/Del/2014 in A.Y. 2005-06 to 2011-12 vide order dated 03.02.2016 is also important where the highest fact found authority of Income Tax proceedings have accepted the decision of CIT(A) that Sh. Surendra Kumar Jain and Sh. Virendra Kumar Jain were involved in providing accommodation entries. However, on the ground of violation of principal of natural justice matter was set aside to Assessing Officer to pass the order on the basis of the principle laid down by the Jurisdictional Delhi High Court in the case of Tarun Goyal and Vijaya Conductors Pvt. Ltd. vide order dated 28.01.2015 and vide order dated 29.09.2015 respectively. In this light the order of Hon'ble ITAT Delhi Bench in ITA No. 3484/Del./2013 in the case of Tarun Goyal on which the Hon'ble ITAT has relied upon in para 23 & 24 of the decision, makes it evident that it is for the assessee to demonstrate the chain of transaction. Para 24 of this order is again reproduced as under:- "24. Before parting we make it dear that the burden of proof lay on the assessee It is for the assessee to demonstrate the chain of transaction, the layering indulg....