TaxTMI 
TaxTMI 
2025 (4) TMI 125
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...., Mr. Sandeep Khairwal, Ms. Swati Sinha, Mr. Himanshu Satija, Mr. Kamal Deep Dayal, Ms. Archana Acharya, Advocates. At Sl.Nos.14 to 19. Mr. Sunil Kumar, Advocate. At Sl.Nos.20 to 30 For the Respondent : Mr. Kanhaiya, Singhal, Advocate ORDER The batch of appeals have been filed involving common legal issues and otherwise facts of different appeals are inter- mixed though the impugned orders dated 30.10.2018 and 31.10.2018 are on separate references sent by the Initiating Officer. The parties prayed for a common order in all the appeals. It is not only for the reason that facts are intermixed in the appeals but it involves common question of law. According to the respondent, even the modus operandi applied for benami transaction by the appellant is also common. The transaction in pursuance to which allegations have been made against the appellants for benami transaction is of the period of demonetization of the currency note of Rs. 500/- and Rs. 1000/- by the Government of India. The common allegation against the appellants is for their involvement to get demonetized money deposited in the bank accounts of people having no means for the total value of more than Rs. 35 cro....
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....by the Adjudicating Authority Beneficial owners M/s Parker Bullion Pvt. Ltd, M/s Gayatri Jewellers, M/s Shreeji enterprises, M/s Patidar Bullion Pvt. Ltd., M/s M.S. Jewellers, Kundan Trading Company, M/s Shital Jewellers and M/s Shivam Jewellers Sanjay Soni, Shrenik Shah and Paresh M. Joshi M/s Parker Bullion Pvt. Ltd, M/s Gayatri Jewellers, M/s Shreeji enterprises, M/s Patidar Bullion Pvt. Ltd., M/s M.S. Jewellers, Kundan Trading Company, M/s Shital Jewellers and M/s Shivam Jewellers Benamidars Yogesh Baburao More of M/s Raj Enterprises, Prakashkumar Govindbhai Kashyap, Jitendrabhai Rameshbhai Patel, Jolly trading company, Shri Kalubhai Dashrathbhai Kureshi (Proprietor of M/s Aryan Corporation), Shri Dipak Shantaram Pavar (Proprietor of M/s Sukun Enterprises), Shri Dashrathbhai Dalichand Nagar (Proprietor of M/s Lascon Enterprises), Shri Mohammed Farhan Mohammad Ishmail Sheikh (Proprietor of M/s Metro Enterprises), Shri Saiyed Kashif Hadar Shabbir Hussain (Proprietor of M/s Krystal Enterprises) and Shri Mohammed Faruk Nasiruddin Kazi, Proprietor of M/s A.S Trading Co. Yogesh Baburao More of M/s Raj Enterprises, Prakashkumar Govindbhai Kashyap, Jitendrabhai ....
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....tter to analyze the legal and factual issues. During the period of demonetization of old high demonetization notes it had come to the notice of the investigation wing of Income tax department that black money is being channelized through the banks by way of utilizing the bank accounts of the persons of no means. Various firms showed their interest to purchase gold so as to route demonetized currency. The cash amount was given to the entry operators who put cash in the bank account of unknown persons having no means to deposit huge amount in their bank account. The demonetized money was channelized through the banking channel to show it for purchase of the gold/bullion. It was found by the respondents that appellant firms/company dealing in Bullion namely M/s Parker Bullion Pvt. Ltd, M/s Gayatri Jewellers, M/s Shreeji enterprises, M/s Patidar Bullion Pvt. Ltd., M/s M.S. Jewellers, Kundan Trading Company, M/s Shital Jewellers and M/s Shivam Jewellers injected cash in the bank account of unknown persons through abettors Sanjay Soni, Shrenik Shah and Paresh M. Joshi named above who in through entry operators by put cash in the bank account of unknown persons. The amount was then transf....
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....is even with common abettors. The abettors said to have facilitated deposit of demonetized money in the bank account of those who were having no means. It was through the entry operators; Afzal Savjani, Tejas Desai, Zahir Abbas Kasamali and Aftab Kazi We are taking the case of M/s Parker Bullion Pvt. Ltd. to analyse the factual and legal issue. The counsel for the appellant submitted that M/s Parker Bullion Private Limited was having long standing business in the trade of Bullions. The annual turnover in the financial year 2016-17 was about Rs. 3009 crores involving trading of Bullion to the extent of 3750 kg Gold, 3686 Kg Gold plus 64089 Grams of gold jewellery and 25809 Kg silver to their credit. The said bullion company was purchasing gold bullion from Axis Bank, Bank of Nova Scotia, Diamond India Limited, MMTC PAMP and various other firms and received delivery of gold bullions for which tax invoices and delivery charges were generated. In the relevant period of year 2016, one Sanjay Soni alias Soni Sanjaykumar Manubhai, proprietor of Gold House Jewellers Private Limited dealing with the appellant company since 2009 informed that he has a sister concern in the name o....
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....account of unknown persons through the entry operator introduced by Sanjay Soni was thereupon transferred to M/s Raj Enterprises by banking channel and thereupon M/s Raj Enterprises transferred the money to M/s Parker Bullion Pvt. Ltd. showing towards purchase of gold. The allegation has been made that appellant company was not having stock of gold so as to make good of the deal on the receipt of the amount from M/s Raj Enterprises. They said to have made back date entries to disclose the stock of gold and even created documents to support their alleged transaction. The respondents analysed the issue on the basis of the statements of many persons recorded under section 132 of Income Tax Act and Section 19(1)(b) of the Act of 1988. It was even with reference to the FSL report to prove that the companies dealing in the bullion were not having sufficient stock of gold and therefore back dated entries were made. The appellant company held to be beneficial owner who transferred the demonetized money to the benamidar M/s Raj Enterprises through the abettor Sanjay Soni and thereupon it was channelized through the benamidar for alleged purchase of gold. The transaction was not for actua....
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....king channel. The amount was then transferred in the account of M/s Raj Enterprises from where it was transferred to appellant M/s Parker Bullion Pvt. Ltd. for channelizing the demonetized money. It was for alleged purchase of gold by M/s Raj Enterprises but actual sale of gold did not take place. It is alleged that no evidence could be produced to link the appellant M/s Parker Bullion Pvt. Ltd. to show its involvement in the benami transaction. The respondent ignored that not only the amount received by the appellant company M/s Parker Bullion Pvt. Ltd. was reflected in the bank account but their books of accounts and inventories of the stock was showing sufficient gold for its transfer to the firms purchased the gold which include M/s Raj Enterprises on payment through RTGS. An allegation has been made that delivery of the gold was given to Sanjay Soni on behalf of M/s Raj Enterprises without an authority letter. It was in ignorance of the fact that Sanjay Soni was known to the appellant firm since long and otherwise business goes on trust. In fact, Raj Enterprises was belonging to Sanjay Soni being his own sister concern. The respondent however went a step further to hold tha....
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....), Shri Dipak Shantaram Pavar (Proprietor of M/s Sukun Enterprises), Shri Dashrathbhai Dalichand Nagar (Proprietor of M/s Lascon Enterprises), Shri Mohammed Farhan Mohammad Ishmail Sheikh (Proprietor of M/s Metro Enterprises), Shri Saiyed Kashif Hadar Shabbir Hussain (Proprietor of M/s Krystal Enterprises) and Shri Mohammed Faruk Nasiruddin Kazi, Proprietor of M/s A.S Trading Co. to be benamidars. The Adjudicating Authority issued notices on the receipt of the reference. The reply to the notice was filed and after hearing the parties, matter was kept for pronouncement of the order. The Initiating Officer submitted an application under Section 26(5) and 26(6) of the Act of 1988 to add the abettor to be beneficial owner and beneficial owner to be abettors. The Adjudicating Authority accordingly passed the confirmation of attachment order treating the abettors to be beneficial owner and vice-versa. It is submitted that addition of the appellant companies from abettor to the beneficial owner was beyond the jurisdiction of the Adjudicating Authority. It was having no jurisdiction to transpose any of the appellant from one category to another, rather as per section 26 of the Act of....
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.... 9 SCC 541. A reference of the judgement of Delhi High Court in the case of Smt. Sunita Gupta Vs. Union of India reported in 2018 SSC online Delhi High Court 10928 was also given where the Delhi High Court laid down the scope of section 26(3) of the Act of 1988. It was held that the Adjudicating Authority has only two options either to hold attached property to be benami properties and thereby confirm the provisional attachment or if it is not, then to deny the confirmation. It has no other authority and accordingly issuance of subsequent notice dated 07.09.2018 was illegal. The counsel for the appellant further referred to the scope of section 26 of the Act of 1988. It is submitted that the Adjudicating Authority may add any person whose presence is necessary to enable it to adjudicate and settle the questions involved in the reference. It can even strike out the parties but has no power to transpose parties from the status of abettor to the beneficial owner or beneficial owner to be the abettor. The learned counsel for the appellants submitted that if the bullion companies were to be taken as beneficial owners, they were required to be served notice under section 24 (1) of ....
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....aji bullion. Mr. Sanjay Soni was the proprietor of Gold House Jewellers Pvt. Ltd. and had been dealing with the appellant. Mr. Sanjay Soni introduced M/s Raj enterprises (sole proprietorship firm of one Yogesh baburao more) and requested M/s Shreeji Enterprises to enter into transaction with M/s Raj enterprises. On 25.11.2016, Mr. Sanjay Soni placed an order of 5 kgs of gold with the appellant bullion firm and on 28.11.2016, he again placed an order of 15 kgs of gold. The amount towards alleged sale of gold was transferred in the account of M/s Shreeji enterprises though actual sale of gold did not take place. The facts and allegations are similar to the case of M/s Parker Bullion Pvt. Ltd. In the other appeal Mr. Sanjay Soni, proprietor of Gold House Jewellers Pvt. Ltd. introduced his sister concern in the name of Shiv Traders (a sole proprietorship firm of one Prakashkumar Govindbhai Kashyap) to M/s Shreeji enterprises with a request to enter into business transaction with M/s Shiv Traders. The appellant firm entered into business transaction with M/s Shiv Traders and the modus operandi of the appellant M/s Shreeji Enterprises is identical to the one undertaken by M/s Parker B....
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....n Pvt. Ltd. The appeal filed by Ajesh Patel on behalf of Patidar Bullion Pvt. Ltd. involves Raj enterprises and the facts are similar to the case of M/s Parker Bullion Pvt. Ltd. and thus, are not being repeated for the sake of brevity. Kundan Trading Company The appellant Kundan Trading Company is a proprietorship concern of Amit Ashokbhai Patel and is engaged in the business of sale of gold and silver bullion since 01.12.2009. on 29.11.2016, the appellant received a telephonic message from one Suresh Soni who is a known person to the appellant and engaged in jewellery business for purchase of 10 kgs of gold for one Jolly Trading Company who made an RTGS into the account of appellant for Rs. 2,92,11,000/-. After receipt of the RTGS, the appellant placed an order for purchase of standard gold bullion for 12 kgs to Shreeji trading company and another 10 kgs gold from Kay Ess enterprises. Thus, an order of total 22 kgs gold was placed, out of which 10 kgs was sold to Jolly trading company. The appellant firm placed the invoices raised against jolly trading company and also paid income tax against the said transactions. M/s Shital Jewellers M/s Shital jewellers is a sole....
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....bmitted that no case is made out in favour of the appellants on facts and even on legal issues. The elaborate arguments by the respondent was followed by the written arguments. We would refer to the arguments raised by the respondent while recording our finding to each factual and legal issues raised by the appellants. It is to avoid repetition of the same facts and otherwise the arguments of the respondent would be referred vis-à-vis the issues raised by the appellants to make the order crisp and appropriate. Finding of the Tribunal We have considered the rival submission raised by the parties and scanned the matter carefully. The facts pertaining to each case has been narrated. The allegation against the appellants is for common modus operandi to circulate demonetize money to convert it to legal tender. Initially, notice was issued under Section 24(1) of the Act of 1988 to the benamidars and copy marked it to the bullion firms as beneficial owner. Statements were recorded and replies were filed by the noticees. On the basis of it, the Initiating Officer passed provisional attachment orders under Section 24(4)(b)(i) of the Act of 1988 and send the references tre....
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....nce under sub-section (5) of section 24, the Adjudicating Authority shall issue notice, to furnish such documents, particulars or evidence as is considered necessary on a date to be specified therein, on the following persons, namely:- (a) the person specified as a benamidar therein; (b) any person referred to as the beneficial owner therein or identified as such; (c) any interested party, including a banking company; (d) any person who has made a claim in respect of the property: Provided that the Adjudicating Authority shall issue notice within a period of thirty days from the date on which a reference has been received: Provided further that the notice shall provide a period of not less than thirty days to the person to whom the notice is issued to furnish the information sought. (2) Where the property is held jointly by more than one person, the Adjudicating Authority shall make all endeavours to serve notice to all persons holding the property: Provided that where the notice is served on anyone of the persons, the service of notice shall not be invalid on the ground that the said notice was not served to all the pe....
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....lated to the benamidar or such other person in any manner, or a person regularly employed by the benamidar or such other person as the case may be; or (ii) any officer of a scheduled bank with which the benamidar or such other person maintains an account or has other regular dealings; or (iii) any legal practitioner who is entitled to practice in any civil court in India; or (iv) any person who has passed any accountancy examination recognised in this behalf by the Board; or (v) any person who has acquired such educational qualifications as the Board may prescribe for this purpose." Sub-section 5 of section 26 provides that in the course of the proceeding before Adjudicating Authority, if it finds reasons to believe that property, other than the property referred to it by the Initiating Officer is benami property, it shall provisionally attach the property and property shall be deemed to be a property referred to it on the date of receipt of the reference under section 24(5). Sub section 6 of section 26 gives jurisdiction to the Adjudicating Authority to strike out the name of any party improperly joined or add the name of any person whose presence ....
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....h a copy to bullion companies as beneficial owners. The matter proceeded further and when in the subsequent investigation, position of fact became clear, the subsequent second notice was served according to do the justice. The notice disclosed all the relevant material to do the justice. The addition of the party from abettor to beneficial owner and vice-versa was when their presence was found necessary for proper adjudication with their addition as abettors and beneficial owners. No prejudice was caused to the appellant in doing so because initially copy of the notice under Section 24(1) of the Act of 1988 was given to bullion companies. They were given opportunity to file reply and contest to add them with change in status. The reference of the judgement in the case of Distributors (Baroda) Pvt. Ltd. vs. Union of India & Ors. reported in 1985 AIR 1585, 1985 SCR Supl. (1) 778 is given where the Court has allowed to correct the mistake. Relevant paragraph of the judgment (supra) is quoted hereunder: "The view taken in that case in regard to the construction of Section 80M must be held to be erroneous and it must be corrected. To perpetuate an error is no heroism. To rec....
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....judicating Authority has been given further jurisdiction under sub section 4 to sub section 6 of section 26. The provisions aforesaid give power to the Adjudicating Authority to extend justice to the parties and therefore the Adjudicating Authority has been given power to drop a party improperly joined or for addition of party whose presence may be necessary. It is even to attach the property left out by the Initiating Officer. The argument by the appellant has been made in ignorance to the relevant provisions but considering only sub section 3 of section 26. The reference of the judgement of the Delhi High Court in the case of Smt. Sunita Gupta (supra) has been given where the interpretation of section 26(3) has been given. The judgement aforesaid is to apply when a matter is required to be decided restricting it within the four corners of section 26(3). It cannot be that other provision like sub section 4 to 6 of Section 26 have been nullified by Delhi High Court, rather interpretation to Section 26(3) has been given as was raised by the parties. Thus, even the third argument raised by the appellant has no merit and is rejected. The learned counsel for the appellant further....
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....and Mukesh J. Acharya, Directors of the company were recorded u/s.132(4) of the Act. While recording the statement u/s.132(4) of the Acton 24.01.2017, Shri Jagdishbhai Acharya was categorically asked to explain the transactions carried out by Shri Sanjay Manubhai Soni, Afzal Savjani and Tejas Desai through M/s Raj Enterprise and the remittances of approx. Rs. 11.61 crores received in the account of M/s Parker Bullion Pvt. Ltd. In response to the question, Shri Jagdishbhai Acharya has stated that he did not know the above persons and whatever statement Afzal and Tejas Desai have given is wrong. However, he stated that there is credit of Rs. 1.21 crores from M/s Raj Enterprise. He has expressed his ignorance regarding the rest of the amount. Further in response to question no. 48 of his statement dated 26/1/2017, Shri Jagdish Acharya has stated that there has been physical delivery of gold to M/s Raj Enterprise. The employee named Shri Yogeshbhai who used to take delivery of gold for Shri Sanjay Manubhai Soni had also taken the delivery of gold of M/s Raj Enterprises from their office in National plaza. He also mentioned about one of the invoice of M/s Raj Enterprises that there has ....
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....y Soni at the premises of M/s Parker Bullion Pvt. Ltd. In answer to Qn.No.22 he further stated that as per his knowledge, there was no authorization given by M/s Raj Enterprise or Shiv Traders to Sanjay Soni for collecting the goods from M/s Parker Bullion Pvt. Ltd. (vi) Further Shri Yogesh Baburao More was also summoned u/s. 19(l)(b) vide summon dated 31.07.2017. In response to the same, he was asked to verify whether signature on the delivery challan where his or not. He categorically stated that except the signature on KYC documents (PAN, Light bill) all other signatures on delivery challans were not done by him. Shri Yogesh Baburao More also filed an affidavit on 21.08.2017 wherein he confirmed that the signature on Delivery challan produced before him of M/s Parker Bullion Pvt. Ltd. were not his signature. Thus, the account holder himself from whose a/c no. 916020056388231 Rs. 11,61,95,535/- were transferred to M/s Parker Bullion Pvt Ltd, has denied the receipt of gold jewellery/bullion and has not signed the proof of receipt on delivery challans. (vii) In reply dated 14.08.2017, M/s Parker Bullion Pvt. Ltd also submitted the CD of the Audio recordings (of ca....
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....(xi) In the light of above and on the basis of various statements recorded of the jewellers and the intermediaries, it had been concluded by the Initiating officer that Shri Sanjay Soni was the beneficiary owner of the sum of Rs. 11,61,95,535/- deposited in cash into the bank account of Shri Yogesh Baburao More, Prop. Of M/s Raj Enterprise thereafter transferred into the bank account of M/s Parker Bullion Pvt. Ltd. (xii) Emergence of new facts as per Forensic and other queries done by Investigation wing post passage of order by ACIT (BPU): However, post search and post passage of order u/s 24(4) of the PBPT ACT in the case, the result of enquiries conducted by the Investigation Wing from the Central Forensic Laboratories and through own investigation, the following facts have emerged. The same is discussed below pointwise: A. Search and Seizure operations had been under taken at various premises of M/s Parker Bullion Pvt. Ltd and its sister concerns. The Statement u/s 132 of the Income Tax Act had been recorded of the key persons namely directors, SVs Jagdish Kumar Acharya, Haresh Kumar Acharya, Mukesh Acharya, Natwarbhai Acharya and employee Bharatbhai K Shah. ....
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....the KYC documents such as bank details, Sales Tax Number, PAN number, shop establishment details on the basis of TIN number, cancelled cheque, etc. are invariably obtained before making any deal. After obtaining these details, there are various other formalities to be completed from the side of M/s Parker Bullion Pvt. Ltd as well as with Bank. M/s Parker Bullion Pvt. Ltd is getting gold from Brinks Arya Logistics Agency. Before delivery of bullion to the purchaser authorisation from the purchaser in name of the person taking the delivery is also taken and on delivery, the name, seal and signature of the person taking delivery is obtained on one copy of the bill. D. The regular system followed by the M/s Parker Bulion in its business: From the statements recorded in the cases of the directors of M/s Parker Bullion Pvt. Ltd. viz. Jagdish R. Acharya, Mukesh J. Acharya, Hareshkumar J. Acharya and Natwarbhai J. Acharya as well as the employees at the business premises, the regular system followed by the assessee for induction of a new client and the process of carrying out subsequent business transactions can be summarized as under: (i) Inquiry is received from a new p....
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....s concerns of Sanjay Manubhai Soni and his statement was recorded us/s. 132(4) of the Income-tax Act on 26/1/2017. At question No. 79, Sanjay Manubhai Soni was confronted with statement of Bharatbhai Shah of M/s Parker Bullion Pvt. Ltd. recorded at office of M/s Parker Bullion Pvt. Ltd at 13-15, National Plaza, C.G. Road, Ahmedabad. In his statement dated 24/01/2017 of Bharat Shah, he has stated that gold was purchased by M/s Raj Enterprise, but delivery was made to Sanjay Manubhai Soni or a man sent by him. Further, in support of his statement, he has submitted copy of invoice (DN). On perusal of the same, it reveals that the person who got the delivery of bullion has signed it and the signature is that of Sanjay Soni. Therefore, Sanjay Soni was categorically asked to explain as to why the bullion was delivered to him though the invoice was made in name of M/s Raj Enterprise. In reply, Sanjay Soni has replied that delivery or gold bullion was taken by him and that he had signed on the invoice. The 130 gold bars of 100 gms weighing 13 kgs was given to Mohmad alias (C A Mohmad Re Nikunj) the very next day. F. As per the statement recorded of Sanjay Manubhai Soni, i....
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....s and no business activity was being done from these concerns (reply to question no. 14 of the statement dated 2712/2016). Thus the instruction for transfer of the Rs 11.62 crores from account of M/s Raj Enterprises to M/s Parker Bullion Pvt Ltd had been given by Shri Sanjay Soni and not Shri Yogesh Baburao More who is the proprietor of M/s Raj enterprise. This shows that the account had been controlled by Shri Sanjay Soni. • The Director of M/s Parker Bullion Pvt Ltd, Shri Jagdish Acharya had stated during the course of recording of statement dated 24/1/2017 that delivery was given to a person named Yogeshbhai. Incidentally, the proprietor of M/s Raj Enterprise, from whom RTGS has been received, is also Yogeshkumar Baburao More and Yogesh Baburao More has categorically denied having carried out any business transactions with M/s Parker Bullion Pvt. Ltd. in his statement recorded u/s.131 of the IT Act. Further, Yogesh Baburao More has categorically stated that his account was used for cheque discounting and providing accommodation entries. It is observed that delivery of bullion was handed over to a person who himself hasstated that his account was utilized by entry op....
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....as carried out and the data was extracted. On forensic analysis it was found and reported by the forensic expert that the data was entered in a FoxBase Database using the Application named FAS. The FoxBase Database for FY 2016-17 was found at the path E:\parties\Party A-4 Natwarlal I. Acharya\Party A4 mobile backups\Extracted Data\G S BULLION ACCOUNT PC DATA BACKUP\Database File\untitled\D\FAS16. The Fox Base data of different segments like Sales, Purchase, Stock, Cash and Bank was exported in excel for analysis purpose. J. The analysis of digital data has proved backdating of entries made in the cash book. While bank book has entries which have been made in earlier months, matching entries in cash book (entries which have resulted in cash book having sufficient cash to deposit in bank on respective days) have been found to have been made on later dates. Actually, at the front end of the software i.e the user interface which is seen by a user, the dates of these entries in cash book match those of the bank book. However, when the actual dates on which entries were made was examined from the back end i.e. from the database, it was revealed that these cashbook entries were a....
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....row numbers, which carry Voucher number 174 to 176, are carrying date of 07th November. Meaning the entries are made after 8th of November but it is dated prior 8th of November. It can be seen that the next two entries are again in the sequence an carry the date of 9th and 10th of November. R. There are other such entries which have been backdated. The total quantum of backdated purchases is Rs. 11,16,74,401/-. (Of these Rs. 4,68,94,351/- is the quantum of entries for which assessee has entered dates prior to 8th November and Rs. 6,47,80,050/- is the quantum of entries for which assessee has entered dates after 8th November.) The relevant backdated entries are shown below. The complete set of entries for purchases, showing the sequence of entries can be seen in the analysis data given by forensics expert and placed in the relevant post search investigation folder along with forensics report. S. For genuine sales to have occurred, it is necessary that the bullion which is alleged to have been sold must have been in stock with the M/s Parker Bullion Pvt. Ltd. The backdating of stock clearly proves that the M/s Parker Bullion Pvt. Ltd did not have sufficient stock in....
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....g as a base, the entries for code 5 were analyzed and here also, in the same fashion as stated above, there are many entries which does not seem to be in timely sequence and appended as entries with previous date. If under understanding for the code as purchase code is correct, backdating of purchases is evident. Z. There are many such entries which have been backdated. The total quantum of backdated purchases is Rs. 189,76,59,421/-. (Of these Rs. 3,04,33,821/- is the quantum of entries for which M/s Parker Bullion Pvt. Ltd has entered dates prior to 8th November and Rs. 186,72,25,600/- is the quantum of entries for which assessee has entered dates after 8th November.) The relevant backdated entries are shown below. The complete set of entries for purchases, showing the sequence of entries can be seen in the analysis data given by forensics expert and placed in the relevant post search investigation folder along with forensic report. AA. For genuine sales to have occurred, it is necessary that the bullion which is alleged to have been sold must have been in stock with M/s Parker Bullion Pvt. Ltd. The backdating stock clearly proves that the assessee did not have s....
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....ed of having done any business activity in his firm and of having entered into any transaction with M/s Parker Bullion Pvt Ltd or of having received any gold as a result of the alleged sale of gold • Shri Afzal Bhai and Tejas Desai (entry providers) had stated that they had received a sum of Rs 48 Crore from Shri Sanjay Manubhai Soni and had deposited the sum into various accounts (accounts were of poor persons who had lent out their accounts to them for sum of Rs 7000- 8000 per month who have been named as benamidar here). Thereafter on instructions of Shri Sanajy Manubhai Soni the sums were transferred through RTGS into the account of various jewellers. Hence the sum had been transferred from M/s Raj Enterprise to M/s Parker bullion Pvt Ltd on instruction of Shri Sanjay Soni. • The Director of M/s Parker Bullion Pvt Ltd. Shri Jagdish Acharya had stated during the course of recording of statement dated 24/1/2017 that delivery was given to a person named Yogeshbhai. Incidentally, the proprietor of M/s Raj Enterprise, from whom RTGS has been received, is also Yogesh Baburao More. Sri Yogesh Baburao More has categorically denied having carried out any busine....
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....o be false, thereby, veiling the real motive of transaction. • Last but more importantly, the forensic reports have proved that there had been back dating of the books of accounts to make availability of the stock and requisite funds during the demonetization period in order to divert the unaccounted money so accumulated over the years, into the main stream. • Shri Sanjay Manubhai Soni is a link in the whole transaction cycle- from Shri Afzal Savjani to Shri Yogesh Baburao More(Prop. M/s Raj Enterprises) to M/s Parker Bullion Pvt. Ltd. Shri Sanjay Manubhai Soni in his statement dated 9/8/17 u/s 19(1) of the PBPT Act has also stated that the money did not belong to him. Further, when the amount was deposited into various bank accounts by Afzal Savjani and Tejas Desai, Shri Sanjay Soni directed them to transfer the fund to various parties implying that as per the scheme the money would land into the hands of the owners travelling through banking channels, thus regularizing the unaccounted money. In this case, the money has rather reached M/s Parker Bullion Pvt Ltd through a chain of transactions and sale of non-existent gold/bullion. The gold has been claime....
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....perators. It has been stated by Shri Afzal Savjani and Tejas Desai in their statement recorded u/s.131 of the Income Tax Act dated 27.12.2016 that they used to operate the account no.916020056388231 of M/s Raj Enterprise. It was also accepted by them that the cash neither belonged to account holders and nor it was earned from the business activity of the account holder. (ii) The details of the amount so deposited in the account of M/s Raj Enterprise and transferred to the account of M/s Shreeji Enterprise is as under: (iii) Shri Yogesh Baburao More had in his reply to question no. 6 of his statement recorded on 28/12/2016 had clearly stated that he is a labour working in diamond industry a there is no business activity in M/s Raj Enterprises. It is just a paper concern. In the same statement in reply to question no. 13, he has clearly stated that he has not purchased anything from anyone by utilizing the fund in his bank account no. 916020056388231. The same facts have been reiterated by Shri Yogesh Baburao More in his statement recorded u/s 19(1) of the PBPT Act on 9/8/2017 before the DCIT(BPU), Ahmedabad. (iv) Shri Afzal Bhai (entry provider) in reply t....
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....rence u/s 24(5) of the Act dated 04.10.2018). Shri Bhagvanbhai A Patel stated that his son handles all the matter related to Shreeji Enterprise hence he will answer all the questions. In view of the same, Summon was issued to Shri Bhavesh Bhagvanbhai Patel on 30.08.2017. In the statement recorded u/s. 19(1) of the PBPT Act Shri Bhavesh Bhagvanbhai Patel stated that the gold was booked as per the instruction of Shri Sanjay M Soni and RTGS was received through M/s Raj Enterprise (Refer Annexure A19 of the Reference u/s 24(5) of the Act dated 04.10.2018). When the RTGS was received the delivery of Gold was given to Shri Sanjay M Soni. Shri Sanjay Soni also accepted in his statement recorded that he had received the gold/ bullion and he further made the delivery to a person named Shri Mohammed. However, in spite of various opportunities being provided to Shri Sanjay Soni to produce Shri Mohammed for Cross verification by the Investigation wing and the Initiating Officer, Shri Mohammed was not produced for verification of the delivery of the bullion by Shri Sanjay Soni to him. The Initiating Officer traced out Shri Mohammed from the Mobile Number Provided by Shri Sanjay Soni and Shri Mo....
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....d bullion for that day from his suppliers viz. Balaji Bullion, Ambuja Bullion, Amrapali Bullion. For calculation of rate, he decides the relative rate in comparison with the rate shown in MCX. For example, if the market rate is fixed at Rs. 200/ plus for ABC on MCX on 24/01/2017 and the rate of XYZ is decided at Rs. 250/- plus on MCX. The price is dynamic in the MCX Market and changed in the price which is reason of profit/loss of the business. Accordingly, the order of booking is given at the rate of Rs. 200/- plus (rate is low) of ABC on MCX. (ii) In this way, the order is booked by him on the basis of the booking of price for purchase. Before 08/11/2016, the order sheet been written as rough notings in A4 sheet, which were trashed after completion of order. (iii) After 08/11/2016, the work is done through cheque and the slip of cheque is kept with assessee. The delivery is given after clearance of cheque. In this manner, sale is done after booking. (iv) The delivery of bullion is given after receipt of value of the same by way of cash or transfer. B. In his statement dated 25/1/2017 u/s.132(4) of the Act, Bhavesh B. Patel was categorically ask....
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.... stated that Rs. 5,83,98,850/ has been received by way of RTGS from bank account of M/s. Raj Enterprise. Shri Bhavesh Patel has clarified that he does not know the proprietor of M/s Raj Enterprise and deal for purchase of bullion was made by Sanjay Soni through phone and after remittances of funds to M/s. Shreeji Enterprise, the delivery of bullion was also made to Sanjay Soni. As per the knowledge of Bhavesh Patel, Sanjay Soni himself is partner/proprietor of M/s Raj Enterprise. C. On perusing the statements of Bhavesh Patel, it is seen that booking for bullion was stated to be done by Sanjay Soni over phone and after remittances were made from benami accounts of M/s. Raj Enterprise and M/s. Shiv Traders to M/s. Shreeji Enterprise, the bullion was also delivered to a person who had come to collect the bullion on behalf of Sanjay Manubhai Soni. Further, on 23/01/2017, it is observed that Bhavesh Patel had purchased bullion of 2 kg from Aurous Enterprise Pvt.Ltd, a company of Sanjay Manubhai Soni. Shri Bhavesh Patel has explained that the deal for 2 kg bullion was made with Suresh Bhai Soni (of Ratanpol), but remittances were made by way of RTGS to Aurous Enterprise Pvt. Lt....
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....oni. Many a times, the employee of Sanjay Soni used to collect the gold bullion from the office of the concerned jeweller. Thus, it can be observed that Sanjay Soni has admitted to have taken delivery of bullion in respect of remittances made from M/s. Raj Enterprise for purchase of bullion from various bullion traders. Further Shri Sanjay Manubhai Soni, in reply to question no. 79 has stated that the bullion was booked on behalf of Mohammad and after taking delivery of bullion from various bullion traders, Sanjay Soni used to hand over the bullion to Mohammad. Sanjay soni has not been able to furnish any documentary or corroborative evidences to show that he has handed over bullion to Mohammad even after several opportunities given to him during the search action and post search investigations. It is observed that Sanjay Soni couldn't discharge his burden to substantiate that the alleged delivery of gold bullion taken by him was further handed over to 'Mohammad‟. Shri Mohammad has during the proceedings under the PBPT Act, in compliance to summons u/s19(l)(b) of the PBPT Act stated that he had not received the gold/bullion. He has further stated that he is into ....
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....further stated that stock register, inward /outward register, delivery challans etc. are not being maintained by M/s Shreeji Enterprise. This indicates that M/s Shreeji enterprises is being run like a petty grocery shop where no record of stock, inward/outward of stock and delivery of stock is maintained. It is pertinent to note that M/s Shreeji Jewellers has two branches, one in Jaipur and One in Visnagar. So, in absence of Shri Bhavesh at any one branch, the business is being conducted by the employees. It is unbelievable that when the business is being conducted through employees, there is no day to day and transaction to transaction quantitative tally of stock. The Non production of the delivery challan and stock register all indicate towards the fact that there are suspicious/unrecorded transaction in the Books of M/s Shreeji Enterprises. • There is another instance when Shri Bhavesh Patel has transacted with another concern of Shri Sanjay Soni, M/s Aurous Enterprise Pvt. Ltd. even though Shri Bhavesh Patel has in his statement recorded on 26/1/2017 had stated that he did not know Shri Sanjay Manu Bhai Patel. It is seen that on 23/1/2017 Shri Bhavesh Patel had pur....
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....al motive of transaction. • Since Sanjay Soni is also a bullion trader and if he genuinely wanted to sell bullion to Mohammad, he could have sold it through his various concerns namely Aurous Enterprise Pvt Ltd, Gold House Jewellers Pvt. Ltd and his own proprietary concern. Therefore, the remittances made through benami concerns is a way of routing unaccounted cash through banking channels. F. Digital Forensic Evidences pertaining to M/s Shreeji Enterprise: G. During the course of survey carried out at M/s Shreeji Enterprises located at Bhagwandas Chambers, Maya Bazar, Visnagar, Ahmedabad imaging of the digital devices present at the premises was carried out On extraction of the said data, it was found that the data was entered in a FoxBase Database using the Application named FAS.The FoxBase Database was found at the path: \ parties \ Party VS-1Shreeji Enterprise \ Nilamkumar Dell laptop 2017-01 24_13-23-54_2\DataBase Manually\2017-01-24_13-23-54-image\ E \SB15\SB \1617 folder. H. Forensic analysis of the extracted data has proved backdating of entries made in the cash book. (The report submitted by the forensics expert is placed in the post....
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....e, it appears that first 63 entries, From Voucher No.1 to Voucher No. 50, seems to be entered in timely order from 04/04/16 to 22/11/16. 5. Now, after this record, Record numbers 64 which is logically entered after the previous entry of 22/11/16; carries the date of 26/04/16. This continuous till record number 68 which is dated 10/11/16. 6. Now again, after this, Record numbers 69 which is logically entered after the previous entry of 10/11/16; carries the date of 09/08/16. 7. It can be observed that each such lot / group / bunch of entries carries a specific party number depicting that the lots entered is for a specific kind and party of transaction. 8. Such lots or groups / bunches of entries are repeated* continuously until 29/11/16. This shows that all these entries may have been made between 22/11/16and 29/11/16. 10.Forensic analysis of CASH.DBF, BANK.DBF, SALES.DBF and PUR.DBF found in \ parties \ Party VS-1 Shreeji Enterprise \ Nilamkumar Dell laptop 2017-01- 24_13-23-54_2 \ DataBase Manually \ 2017-01-24_13- 23-54-image \ E \ SB15 \ SB \ 1617, clearly shows that for cash entries, there are huge number of entries seem not to be in....
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....h deposits in the books, sufficient cash on hand was not available in books. This is not a case of bona fide mistake. It is evident that the matching entries were made later. This is proven from the fact that entries in the cash book continued to be made sequentially during the period to which the back dated entries pertain. Hence these backdated entries were merely made to adjust cash balances to match the actual bank book entries For genuine sales to have occurred, it is necessary that the bullion which is alleged to have been sold must have been in stock with the M/s Shreeji Enterprises. The backdating of stock clearly proves that the M/s Shreeji Enterprises did not have sufficient stock in books to have made the sales to the parties from whom RTGS has been received owing to which it had to resort to fudging of books. In the absence of stock, no sales could have been made. It is for this reason that the backdating of purchases was carried out so as to manipulate the figure of available stock and present a false picture (which has been proved by the findings of digital forensic as discussed above). It is therefore very clear that the theory of alleged sale of bullion being the re....
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.... account of various jewellers. Hence the sum had been transferred from M/s Raj Enterprise to M/s Shreeji Enterprise on instruction of Shri Sanjay Soni. • As per the statement of Shri Bhavesh B Patel recorded on 26/1/2017 u/s 132 of the Income Tax Act 1961 there has been no documentary evidence to show the actual delivery of bullion to M/s Raj Enterprise. • In his statement, Shri Bhavesh further stated that stock register, inward/outward register, delivery challans etc. are not being maintained by M/s Shreeji Enterprise. This indicates that M/s Shreeji enterprises is being run like a petty grocery shop where no record of stock, inward/outward of stock and delivery of stock is maintained. It is pertinent to note that M/s Shreeji jewellers has two branches, one in Jaipur and One in Visnagar. So in absence of Shri Bhavesh at any one branch, the business is being conducted by the employees. It is unbelievable that when the business is being conducted through employees, there is no day to day and transaction to transaction quantitative tally of stock. The non production of the delivery challan and stock register all indicate towards the fact that there are some ....
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....ied of having done any business transaction, and also of having received any gold. The seller could not give foolproof evidence for the availability of gold with it for delivery. The seller further could not give concrete evidence of delivery as no authorization was available on record. Lastly the gold alleged to have been received by Shri Sanjay Soni and then given to Shri Mohammed has also proved to be false, thereby, veiling the real motive of transaction. • Since Sanjay Soni is also a bullion trader and if he genuinely wanted to sell bullion to Mohammad, he could have sold it through his various concerns namely Aurous Enterprise Pvt. Ltd, Gold House Jewellers Pvt. Ltd and his own proprietary concern. Therefore, the remittances made through benami concerns is a way of routing unaccounted cash through banking channels. • Shri Sanjay Manubhai Soni is a link in the whole transaction cycle from Shri Afzal Savjani to Shri Yogesh Baburao More (Prop. M/s Raj Enterprises) to M/s Shreeji Enterprise. Shri Sanjay Manubhai Soni in his statement dated 9/8/17 u/s 19(1) of the PBPT Act has also stated that the money did not belong to him. Further, when the amount was ....
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....ators who were facilitating the fraudulent activities of converting unaccounted OHP notes through banking channel. (The fact has also been narrated in the order passed u/s 24(4) of PBPT Act 1988 dated 25/9/2017). On analysis of the Bank Account details of the Firm it was found that an amount of Rs. 2,95,87,500/-was transferred from the account of M/s. M/s Raj Enterprise to M/s Gayatri Jewellers. In view to verify the same, statement of Shri Yogeshkumar Baburao More was recorded on 28/12/2016 u/s131 of the Income Tax Act1961 (Refer Annexure-A12 & A13 of the Reference u/s 24(5) of the Act dated 04.10.2017), wherein he has categorically stated that the bank account No. 916020056388231 in the name of M/s Raj Enterprise was opened in month of September 2016 as per the instructions of Tejas C. Desai and Afzal Savjani, entry operators. It has been stated by Shri Afzal Savjani and Tejas Desai in their statement recorded u/s.131 of the Income Tax Act dated 27.12.2016 that they used to operate the account no. 916020056388231 of M/s Raj Enterprise. (ii) A search and survey action was carried out at the residence of the proprietor as well as office premises of M/s Gayatri Jewellers (P....
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.... and there is no business activity in M/s Raj Enterprise. It is just a paper concern. In the same statement, in reply to question no. 13, he has clearly stated that he has not purchased anything from anyone by utilizing the fund in his bank account no. 916020056388231. The same facts have been reiterated by Shri Yogesh Baburao More in his statement recorded u/s 19(1) of the PBPT Act on 9/8/2017 before the DCIT (BPU), Ahmedabad. (v) Shri Afzal Bhai (entry provider) in reply to question no. 16 of his statement recorded during survey operation conducted by the investigation wing of the department at Axis Bank, Memnagar Branch, Ahmedabad on 27/12/2016 (Refer Annexure A3 of Reference u/s 24f5) dated 04.10.2017) stated that he and Tejas Desai had received a sum of Rs 48 Crore from Shri Sanjay Soni and had deposited the sum into various accounts (accounts were of poor persons who had lent out their accounts to them for sum of Rs 7000-8000 per month who have been named as benamidar here). Thereafter on instructions of Shri Sanjay Manubhai Soni the sums were transferred through RTGS into the account of various jewellers. Shri Afzal had also stated that the accounts into which sever....
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....and the order u/s 24(4) was passed on 25/9/2017i.e.after the date of passing of order u/s 24(4) of the PBPT Act 1988). The same is discussed below pointwise: A. During the course of recording of statement u/s132(4) on 24/1/2017 at his residence, Shri Diptesh Soni was asked to narrate about the modus operand! of sales. In response he stated that first, the order of bullion is received through phone or in shop. Subsequently, after receiving his bank details of M/s Gayatri Jewellers by the parties, money is transferred by buyers into the account of M/s Gayatri Jewellers and on confirmation of the receipts in the bank, the party takes the delivery of bullion at shop. Sometimes, cash sales are also made; though, usually, sale is made through cheque or online transfer. It was also stated that sales and purchase are thoroughly looked after by Dipteshbhai M. Soni (prop. Of M/s Gayatri Jewellers). He also stated that services of courier or angadiya are not used for business activities. B. As regard to sale to M/s Raj Enterprise during the course of recording of statement u/s 132(4) on 24/1/2017 at his residence, Shri Diptesh Soni was confronted as to whether he knew the fo....
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....ement dated 25/1/2017 at his business premises in reply to question no. 18 that he obtains such documents from his buyers before selling of goods. C. During the search, Dipteshbhai M. Soni was asked to provide the delivery challans of alleged sale made to M/s Raj Enterprises, if the same were treated to be genuine. In response, he has stated that no delivery challan were prepared, but only sale bills were made which was submitted to survey team present at the business premise. D. Since it was available on record thatYogesh Kumar More, prop, of M/s Raj Enterprises has categorically denied to have entered into any business activity and has stated that his account has been utilized by the entry operators, Shri Diptesh Soni was confronted with the statement of Yogesh Kumar More. The statement of Yogesh Kumar More recorded on 28.12.2016 was shown to Dipteshbhai M. Soni wherein he had stated that he is doing business of cheque discounting. Yogesh Kumar More had also accepted that the accounts of M/s Raj Enterprises have been looked after by Tejas Desai. Neither has any business activity being carried out by M/s Raj Enterprises nor has any gold bullion been purc....
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....is case no such identity proof has been taken. And even the signature or mobile number has not been obtained before delivery of gold worth 2.95 Crores. (xi) Conclusion As discussed in prepages 1-12, it is strongly pointed that M/s Gayatri Jewellers (The seller and recipient of the RTGS) has thus failed to give evidence of the sale, the buyer (Through Shri Yogesh More prop of M/s Raj Enterprise) denies of having entered into any transaction with M/s Gayatri Jewellers. It is also inferred that there did not exist the complete chain of supporting evidences to prove the alleged gold deal to be true. The facts have been distorted and presented before the Income tax authorities to give a colour of genuine business transaction and to fix a person of no means to be responsible for the introduction of the undisclosed income. Here in this case OHD notes had been deposited into account of M/s Raj Enterprise (Prop. Shri Yogesh Baburao More) thereafter all the movement of money is claimed to have been genuine transaction of business so when any stringent measures are taken by the authorities then a poor ignorant man comes into picture, here Shri Yogesh Baburao More is....
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.... denied of having done any business transaction and also of having received any gold. The seller could not give foolproof evidence for the availability of gold with it for delivery. The seller further could not give concrete evidence of delivery as no authorization was available on record. Lastly the gold alleged to have been received by Shri Sanjay Soni and then given to Shri Mohammed has also proved to be false, thereby, veiling the real motive of transaction. • Shri Sanjay Manubhai Soni is a link in the whole transaction cycle from Shri Afzal Savjani to Shri Yogesh Baburao More (Prop. M/s Raj Enterprises) to M/s Gayatri Jewellers. Shri Sanjay Manubhai Soni in his statement dated 9/8/17 u/s 19(1) of the PBPT Act has also stated that the money did not belong to him. Further when the amount was deposited into various bank accounts by Afzal Savjani and Tejas Desai, Shri Sanjay Soni directed them to transfer the fund to various parties implying that as per the scheme the money would land into the hands of the owners travelling through banking channels, thus regularizing the unaccounted money. In this case the money has rather reached M/s Gayatri Jewellers through a chain....
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....counted OHD notes through banking channel (the fact has also been narrated in the order passed u/s 24(4) of PBPT Act 1988 dated 25/9/2017). On analysis of the Bank Account details of the Firm it was found that an amount of Rs. 7,44,50,000/- was transferred from the account of M/s Raj Enterprise to M/s M S Jewellers. In view to verify the same the statement of Shri Yogeshkumar Baburao More was recorded on 28/12/2016 u/s131 of the Income Tax Act 1961(Refer Annexure-A12 & A-13 of the Reference u/s 24(5) of the Act dated 04.10.2017), wherein he has categorically stated that the bank account No. 916020056388231 in the name of M/s Raj Enterprise was opened in month of September 2016 as per the instructions of Tejas C. Desai and Afzal Savjani, entry operators. It has been stated by Shri Afzal Savjani and Tejas Desai in their statement recorded u/s.131 of the Income Tax Act dated 27.12.2016 that they used to operate the account no. 916020056388231 of M/s Raj Enterprise. (ii) A search and survey action was carried out at the residence of Suresh Kumar Soni (Proprietor of M/s. M. S. Jewellers) and his office address at 19, Golden Market, Pankore Naka, Sheth's Pol, Ratan Pol, Ahme....
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....ery (with delivery challan) raised in the name of M/s Raj Enterprise were handed over to Shri Sanjay M Soni. After that Shri Sanjay M Soni used to take the challan and after some time he used to give one copy of signed delivery challan back to M/s M.S. Jewellers. The relevant portion of statement of Shri Suresh Kumar Soni recorded u/s 19(1) of the PBPT Act on16/8/2017 is produced as below:- "Q.5 Did you ever had any transaction before, after or during the demonetization period with Shri Yogesh Baburao More, Raj Enterprise? Give details? Ans. I don‟t know Shri Yogesh Baburao More, Prop. Raj Enterprisje'and I have never entered into any transaction before, after or during the demonetization period. After demonetization, I didn‟t have any transaction with M/s. Raj Enterprises. I did business with Raj Enterprise during demonetization through Sanjaybhai Manubhai Soni. Q.6 You said that during demonetization you did transaction with Raj Enterprise, pr. Shri Yogesh Baburao More through Sanjaybhai Manubhai Soni. Please give details? Ans. 1 know Sanjaybhai Manubhai Soni since 15 yrs. He is a renowned businessman of the market and executive member of bullion....
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.... had clearly stated that he is a labourmen working in diamond industry and there is no business activity in M/s Raj Enterprises. It is just a paper concern. In the same statement in reply to question no. 13 he has clearly stated that he has not purchased anything from anyone by utilizing the fund in his bank account no: 916020056388231. Shri Yogesh Baburao More was also summoned u/s. 79 19(l)(b) vide summon dated 31.07.2017. Again in his statement Shri Yogesh Baburao More confirmed that there had been no business activity in his firm M/s Raj Enterprise and he had not placed an order for the purchase for bullion therefore he was not in receipt of any bullion. Shri Yogesh Baburao More wasshowed the delivery challan submitted by M/s M S Jewellers along with the reply dated 5/8/2017 and was asked to verify whether signature on the delivery challan where his or not. He categorically stated that except the signature on KYC documents (PAN, Light bill) all other signatures on delivery challans were not done by him. (Refer Annexure A3 of Reference u/s 24(5) dated 04.10.2017). Shri Yogesh Baburao More also filed an affidavit on 21.08.2017 (Refer Annexure D & DI of Reference u/s 24(5) dated 0....
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....s19(1) of the PBPT Act had stated that he did not receive delivery of the Gold/ Bullion and he is into the business of scrap and not gold. He also submitted an Affidavit confirming the facts narrated by him in the statements recorder u/s 19(1) of the PBPT Act. (viii) In the light of above and on the basis of various statements recorded of the jewelers and the intermediaries, it had been concluded by the Initiating Officer that Shri Sanjay Soni was the beneficiary owner of the sum of Rs. 7,44,50,000/- deposited in cash into the bank account of Shri Yogesh Baburao More, Prop, of M/s Raj Enterprise and thereafter transferred into the bank account of M/s M.S.Jewellers. (ix) Emergence of new facts as per queries done by Investigation wing post passage of order by ACIT (BPU): However, post search and post passage of order u/s 24(4) of the PBPT Act in the case, from the enquiries conducted by the Investigation Wing from the Central Forensic Laboratories and through own investigation, the following facts have emerged. (These reports were received by the Initiating Officer, Ahmedabad on 10.4.2018 after 25/9/2017 i.e. the date of passing of order u/s 24(4) of the PBPT Act 1....
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.... gold over phone on 13.11.2016 and the payment was received through "Aurous Enterprise Pvt. Ltd". Sanjay Soni also booked gold second time for which payment was transferred through bank account of "M/s Raj Enterprise". C. He has further stated that he has received funds to the tune of Rs. 7,44,50,000/- from M/s Raj Enterprises during the period of 18.11.2016 to 24.11.2016 against which bullion was sold to M/s Raj Enterprise and the delivery of gold was not given to M/s Raj Enterprise but to Mr. Sanjay Manubhai Soni at his given address "Sanjay Manubhai House", Khetarpal Ni Pol, Manek Chowk, Ahmedabad. D. During the course of statement recorded at the business premise at Ratan pole, Shri Bhavesh Soni was asked to explain the transactions carried out with Sanjay Soni and details regarding delivery of bullion. In reply, he has stated that Sanjay Manubhai Soni had booked bullion of 5 Kgs for the first time on 14.11.201" for which Rs. 96,00,000/- was transferred from the account of M/s. Aurous Enterprise Pvt. Ltd. This company is owned by Mr. Sanjay Manubhai Soni. He further booked 1900 Gram on thesame day for which Rs. 56,50,000/- & Rs. 2,10,000/- was transferred to h....
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....25 kg (lOkgs on 22/11/2016,14 kg on 24/11/2016 and 1 kg on 24/11/2016) at the office of Sanjay Manubhai Soni. In reply, Bhavesh Soni has stated that in respect of 10 kgs bullion delivered on 22/11/2016, he did not get any confirmation on that very day. On 24/11/2016, out of the 15 kg pending for delivery, 14 kgs was delivered and after that Bhavesh Soni had collected the sign and stamp of M/s Raj Enterprise in duplicate invoices from the office of Sanjay Soni at Manekchowk. Therefore, after getting the confirmation, the remaining1kg gold bullion as released. At question No. 33, in respect of reply to question No. 32, Bhavesh Soni was asked whether the signature on the duplicate invoice of M/s Raj Enterprise was done in the presence of office staff of Bhavesh Soni. In reply, he has stated that the signature was not done in the presence of office staff, but they were asked to come after some time and after 2 hours, the stamp and sign on the invoices were given to the delivery boys on 24/11/2016. Search action was also carried out at the residence of Sanjay Manubhai Soni and his various concerns on 21/01/2017 and his statement was also recorded. At question No. 87, h....
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....low, which shows that post demonetization in November, a new tally worksheet began to be prepared by MSJewellers. It is seen that the 1st Tally was updated only upto 22nd November. This was the same period after demonetization, after which the remittances began to be received from dummy accounts. This entry of data in second Tally database by the assessee at nearly the same period indicates the attempt to fudge the accounts in order to accommodate these transactions. I. The above analysis shows that extra sales of Rs. 8,27,78,438/- and extra purchase of Rs. 6,83,82,255/- have been entered in the second Tally worksheet. The overall increase in profit arising from these extra entries is only Rs. 44,40,708/-. Besides, forensic analysis of the extracted data has proved backdating of entries made in Tally. On detailed analysis of the Tally data, it was found that a number of database entries are entered out of order and is not in correct sequence. As per standard, in Tally, Transaction Table maintains a named Company Vouchers.'SAIter lD'. In this file, every transaction captures a serial number which is in sequence i.e. in the order in which entries are made. Whenever u....
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.... creditors. This is because the backdated sales and purchases are bogus and have only been entered on later dates to get the cash in books which can justify the cash deposits made. N. Additionally, forensics has also revealed „backdating of purchases‟. On detailed analysis of the purchase data Tally, found apparently suspicious database entries were found which are entered out of order and are not in correct sequence. As per Standard, in Tally, Transaction Table maintains a filed named Company Vouchers.'Alter ID', In that file every transaction captures a serial number which is in sequence i.e. in timely order of entry. Whenever user enters any transaction entry into tally, irrespective of its Billing date, this Alter ID keeps increasing by one, i.e. in numerical order. E.g. User enters sales bill in 01.04.2016 and tally captures Alter ID as 1. Then user enters second bill on 02.04.2016 and tally captures Alter ID as 2. And when user enters third bill on 01.04.2016 (which is a previous date, not in order) still tally captures Alter ID as 3. And hence ideally the same order should be followed in the Date if the entries are made in correct order. ....
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.... been claimed are, therefore, entirely bogus and the RTGS which has been received by the assessee. is in lieu of the demonetized OHP notes which were given by the assessee to the cash handlers. (xi) Summary: As discussed in preceding paras, Shri Bhavesh Soni has received remittances to the tune of Rs. 7,44,50,000/- from dummy bank account of M/s. M/s Raj Enterprise. During the course of statement recorded of Bhavesh Soni, he has categorically stated that remittances were received from the bank account of M/s. Raj Enterprise, but the actual delivery of gold was always given to Sanjay Manubhai Soni though the invoices were generated in the name of M/s. Raj Enterprises. But, Bhavesh Soni has not been able to provide any corroborative evidence that Sanjay Soni has actually taken the delivery of bullion. Sanjay Soni was confronted with the statement of Bhavesh Soni and was asked as to whether he agreed with the averments made by Bhavesh Soni. On perusing the statements of Bhavesh Soni and Sanjay Soni recorded during the course of search action, it can be observed that Sanjay Soni has agreed to some of the facts stated by Bhavesh S. Soni especially the fact that deliver....
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....ences to prove the alleged gold deal to be true. Coupled with the fact that the forensic reports have proved that the assessee did not have enough stock as on the date of sale of the gold to M/s Raj Enterprise. The facts have been distorted and presented before the Income tax authorities to give a colour of genuine business transaction and to fix a person of no means to be responsible for the introduction of the undisclosed income. Here in this case OHD notes had been deposited into account of M/s Raj Enterprise (Prop. Shri Yogesh Baburao More), thereafter all the movement of money is claimed to have been genuine transaction of business so when any.stringent measures are taken by the authorities, then a poor ignorant man comes into picture. Here Shri Yogesh Baburao More is one such person in whose account several crores of rupees have been deposited without his knowledge. At the cost of repetition, the following points are again put up for candid observation: • • Shri Yogesh Baburao More, Prop of M/s Raj Enterprise has denied of having done any business activity in his firm and of having entered into any transaction with M/s M.S. Jewellers or of h....
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....her when the amount was deposited into various bank accounts by Afzal Savjani and Tejas Desai, Shri Sanjay Soni directed them to transfer the fund to various parties implying that as per the scheme the money would land into the hands of the owners travelling through banking channels, thus regularizing the unaccounted money. In this case, money has rather reached M/s M.S. Jewellers through a chain of transactions and sale of nonexistent gold/ bullion has been shown. The gold has been claimed to be sold to M/s Raj Enterprise and delivered to Shri Sanjay Soni, but its final destination is ephemeral. • Thus a crooked modus operand! was devised to bring in unaccounted money through a fabricated chain, fruits of which were enjoyed by M/s M.S. jewellers Books were fudged to give an appearance of stock availability and neither the owner of account was aware about the sale nor the seller party could prove the delivery of bullion to the holder of the account. Contradictions in the statement of persons in the chain, forensic analysis done by the investigation wing and other evidences unearth the real motive of transaction process, as discussed in prepages. Hence in view of the ab....
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.... Enterprise). He replied that he knew Sanjay Manubhai Soni who runs a concern by name of Soni Sanjay Manubhai. Further, hestated that he had done trading of gold bullion with Soni Sanjay Manubhai. He told that he does not remember Afzalbhai Savjani Sadikali, Tejas C. Desai and Yogeshkumar Baburao, proprietor of M/s Raj Enterprise and that he has not done any transactions with theaforesaid persons/concerns. • • Thereafter, Ajesh A Patel was confronted with the statement of Shri Afzal Savjani and Shri Sadikali dated 27/12/2016 recorded during course of survey proceedings at Axis Bank wherein they had told that a sum of Rs. 52 crores had been received by them from Shri Sanjay Soni and as per his direction they had as per his direction deposited the sum into various bank accounts and thereafter made RTGS to various jewellers. M/s Patidar Bullion was one of them. After reading the question, Ajeshbhai Patel replied that he had done sales of gold bullion with the persons from whose bank accounts he had received RTGS. He stated that he had sold bullion to Shri Yogeshkumar Baburao More (Prop, of Raj Enterprise) for the RTGS/NEFT transferred to his bank account. ....
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....n No. 20, since Ajeshbhai Amrutlal Patel had never met Yogeshkumar Baburao More, he was asked to explain as to how sale was done with him. In reply, he stated that the rate of bullion was discussed over phone and delivery was done to the person mentioned by Yogeshkumar More over phone. Shri Ajesh Patel also could not remember the name and mobile number of the person belonging to staff of Yogeshkumar who used to collect the bullion. (iv) During the course of proceedings under the PBPT Act, notice u/s. 24(1) of PBPT Act was issued to Shri Yogesh Kumar Baburao More (benamidar) with copy to M/s. Patidar Bullion, Prop. Shri Ajeshbhai Amrutlal Patel (Beneficial Owner) on 30.06.2017. Shri Yogesh Baburao More, Prop: of M/s Raj Enterprise had submitted in reply that he had no information of amount transferred from M/s Raj Enterprise to M/s. Patidar Bullion. Further Shri Ajeshbhai Amrutlal Patel,Prop, of M/s Patidar Bullion filed reply on 12.07.2017 in which it was submitted that the transaction with M/s Raj Enterprise were business transaction and no cash transaction were carried out and the same should not be treated as benami transaction. In view to enquire further the summon u/s....
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....corded during survey operation conducted by the investigation wing of the department at Axis Bank, Memnagar Branch, Ahmedabad on 27/12/2016 (Refer Annexure-A3 of the Reference u/s 24(5) of the Act dated 04.10.2017), stated that he and Tejas Desai had received a sum of Rs. 48 Crore from Shri Sanjay Soni and had deposited the sum into various accounts (accounts were of poor persons who had lent out their accounts to them for sum of Rs 7000-8000 per month wfi have been named as benamidar here). Thereafter on instructions of Shri Sanjay Manubhai Soni the sums were transferred through RTGS into the account of various jewellers. Shri Afzal had also stated that the accounts into which several crores of OHD notes were deposited were the dummy concerns of the benamidars and no business activity was being done from these concerns (reply to question no. 14 of the statement dated 2712/2016). (vii) Shri Tejas Desai in reply to question no. 17 of his statement recorded on 27/12/216 (Refer Annexure-A5 of the Reference u/s 24(5) of the Act dated 04.10.2017) during survey operation at Axis Bank, Memnagar Branch, Ahmedabad had also stated that he and Afzal Bhai received RS 48 Crore from Shr....
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....000 in his bank accounts. When asked about cash deposits of old high denomination notes of his concern post demonetization, he replied that around Rs. 15 to 16 crores were deposited in three different accounts. 1. 2. 3. Axis Bank, Relief Road, Ahmedabad State Bank of India, Main Branch, Laldarwaja Punjab National Bank, Kalupur Further, he stated that cash deposited in old high denomination notes were in respect of sales pertaining to period prior to 09/11/2016. However, various facts which proves beyond doubt that the cash alleged to be deposited in bank accounts in lieu of sales is unaccounted moneys of Ajesh A Patel which he has introduced in his books through back-dating of bills and executing transactions in OHD notes of Rs 1000 and Rs 500 even after 8/11/2016: B. As per section 44AA of the Income-tax Act 1961 r.w.r. 6F of the Income-tax Rules, all assessees are required to preserve the specific books of accounts for a period of 6 years from the end of the relevant assessment year, i.e., for a total period of 8 financial years from the end of the relevant year. But sales bills of alleged sales were not produced. C. Even cash memo not produced. It was ....
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....otten and illicit funds of Shri Ajesh Patel has been introduced by him in his books by disguising the same as cash sales which could not be substantiated. Thus, it is clear that Shri Ajesh Patel is in the habit of generating unaccounted cash, which has been introduced in the books through his own bank accounts and through the bank accounts of benami entities under the garb of bullion sales. K. Transactions executed between Patidar Bullion on one hand and concerns like Sai Bullion, Tirupati Jewellers, M/s Raj Enterprise on the other along-with cash deposits made in bank account of Patidar Bullion: Patidar Bullion has introduced unaccounted and ill-gotten funds in books of accounts by adopting various ways and means like layering through/conniving with his brother-in-law Kapil D Patel who has deposited cash in OHD notes in bank accounts Sai Bullion and Tirupati Jewellers; using dummy account of dummy entities like Yogesh More (proprietor of Raj Enterprise) and by depositing cash in his own account in OHD notes. The quantification of remittances received from dummy accounts like M/s Raj Enterprise as well as through layering and inter-bank transfers through Sai Bullion and Ti....
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.... • Shri Afzal Bhai and Tejas Desai (entry providers) had stated that they had received a sum of Rs 48 Crore from Shri Sanjay Manubhai Soni and had deposited the sum into various accounts (accounts were of poor persons who had lent out their accounts to them for sum of Rs. 7000- 8000 per month who have been named as benamidar here). Thereafter, on instructions of Shri Sanjay Manubhai Soni the sums were transferred through RTGS into the account of various jewellers. Hence the sum had been transferred from M/s Raj Enterprise to M/s Patidar Bullion on instruction of Shri Sanjay Soni. They also stated that a sum of Rs. 2 crore had beeK received by them directly from M/s Patidar Bullion. • M/s Raj Enterprises had been newly introduced to M/s Patidar Bullion by Shri Sanjay Soni, yet the total KYC documents like PAN, TAN, sales tax Number, TIN number, Cancelled Cheque etc. needed for the business were not in the possession of the firm • M/s Patidar Bullion could not give any documentary evidence for availability of stock for giving delivery to M/s Raj Enterprise. • The delivery of bullion as claimed by Shri Ajesh Patel, Prop, of M/s Patidar Bul....
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....n is ephemeral. • M/s Patidar Bullion had entered into such fictitious transaction with other dummy firms as well namely Sai Bullion, Tirupati Jewellers and in these cases also M/s Patidar Bullion has been held to be the beneficiary owner. Please refer Reference no. 141 and 142 respectively. • Apart from rotation of black money through dummy concerns, M/s Patidar Bullion has also deposited huge cash into its various bank accounts post demonetization and the source of which had not been explained byShri Ajesh Patel, Prop, of M/s Patidar Bullion before the Investigation Wing of the Department and the fact has been duly recorded in his statement (reproduced in this report as well). • Thus, a crooked modus operandi was devised to bring in unaccounted money through a fabricated chain, fruits of which were enjoyed by M/s Patidar Bullion. Books were fudged to give an appearance of stock availability and neither the owner of account was aware about the sale nor the seller party could prove the delivery of bullion to the holder of the account. Contradictions in the statement of persons in the chain and other evidences unearth the real motive of transac....
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....ch the amount received by them through RTGS. In fact, back dated entries were made in the record and could be visualized from complete chain of evidence. The FSL report has been detailed out to the appellant by serving the relied upon documents and otherwise detail discussion in Schedule I to V is based on other evidences as well. The detail discussion therein make it clear as to how bullion companies circulated demonetized money to convert it to legal tender. Therefore, excuse has been taken by the appellant for non- supply of the FSL report which is in fact detailed out and was given to them. Thus, we do not find violation of the principle of natural justice rather entire record relevant to the case was given to the appellants and sufficient to prove the case against the appellants. The reference of income tax return and invoices and stock register to show availability of gold was by way of back dated entries. The audio recording was not sufficient to prove actual transaction for purchase of gold. Schedule I to V appended to relied upon documents quoted in this order gives complete picture of the case. So far as the factual issue involved in the present appeals are concerned, ....