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.... 2. State Bank of India, Lal Darwaja Branch, Ahmedabad 32720910220 92,000 3. State Bank of India, Lal Darwaja Branch, Ahmedabad 10169231476 6597 4. Kotak Mahindra Bank, Mithakali Branch, Ahmedabad 08120120015134 35,236 5. Nav Nirman Co-op. Bank, Ranip Branch, Ahmedabad 13834 1,531 In appeal no. FPA-PBPT-231/AHD/2019 arising out of Ref. No. 139/2017 in addition to the above five properties, the properties listed below have also been attached: Sr. No. Name of the Bank Account No. Amount 6. Stock of Patidar Bullion Stock 6,22,500 7. Payable by M/s Tirupati Jewellers Amount owed by M/s Tirupati Jewellers 1,13,91,727 8. Cash in hand Cash 6,66,746 9. Payable by M/s Choksi & Company Amount owned by M/s Choksi & Co. 2,20,000 2. The Ld. Counsel for the aforesaid Appellants raised common question of law and facts in all these appeals. He has argued the appeal nos. 230 & 233/AHD/2019 arising out of reference no. 142/ 2017 and submitted that the common question of legal and factual issues argued in these two appeals are same in all the appeals. Keeping in view the aforesaid submissions, all these appeals are taken up together for a common order. 3. All the....
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....n 08.11.2016, M/s. Sai Bullion made cash sales of Rs. 12,00,00,000/- to approximately 1800 customers in various weights, likewise M/s. Tirupati Jewelers made cash sales to approximately 900 customers, which means that in one day, Sh. Kapil D. Patel handled 2700 customers approximately, which is not possible, as the entire process of retail sale of bullion takes about 15 to 20 minutes. Sh. Kapil D. Patel also stated that he had made sales in cash to various parties and has accepted old currency notes of Rs. 500 and Rs. 1000 after 8/11/2016 i.e. after date on which old currency of Rs. 500 and Rs.1000 ceased to be legal tender. He stated that he sold bullion in old currency notes in greed of profits. He admitted having split bills into less than Rs. 1,00,000/- and to have done back-dating of invoices. He used to sell bullion of different denominations to various parties whose details were recorded in "kaccha slip", which he then used to destroy at regular intervals. He stated that M/s Sai Bullion and M/s Tirupati Jewelers purchased bullion over and above the invoice value, the over-invoiced or premium portion being paid in cash to certain parties from whom bullion was purchased. 7. T....
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....Ahmedabad, sale of Rs. 2.5 crore to Sh. Dhavalbhai of Nadiad and sale of Rs. 1 crore to a person from Bharuch. However, he did not substantiate his claim with documentary evidence or by producing these persons before any authority. During the recording of statement, he said that his stock register is not genuine and not reliable. Sh. Kapil D. Patel filed an affidavit retracting from various depositions made in his statement on oath. In the affidavit, he confirmed that the parties to whom the sales were made were not true and made up. 11. The operations of M/s Sai Bullion and M/s Tirupati Jewelers were carried out with M/s Ghanshyam Jewelers. Sh. Kapil D. Patel admitted to having paid commission of Rs. 2 crores to M/s Ghanshyam Jewelers for being able to utilize the stock of gold bullion of M/s Ghanshyam Jewelers, which was later returned back in bullion form. However, it was observed that there was no payment made to M/s Ghanshyam Jewelers at the time of purchase, as no evidence of payment through cheque is seen from the bank account of M/s Sai Bullion. Instead, the entire stock was shown to be sold back to M/s Ghanshyam Jewelers. It is improbable that a person would transfer stoc....
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....as the hearing presented by both the parties, the Ld. AA agreed with the findings of the IO and held that the Benamidar in the reference no. 142/2017 is Sh. Kapil D. Patel whereas the Beneficial Owner is Ajeshbhai A. Patel and in reference 141/2017 the Benamidar is Sh. Dinesh C. Patel and the Beneficial owner is Ajeshbhai A. Patel. The investigation revealed that the cash deposited in the bank accounts of M/s Tirupati Jewelers and M/s Sai Bullion was not out of sale proceeds of gold and that Sh. Kapil D. Patel was not the owner of the cash deposited. As the cash was transferred through RTGSs/NEFT to the bank account of Sh. Ajesh A. Patel, Prop. of Patidar Bullion after depositing in the bank accounts of M/s Sai Bullion and M/s Tirupati Jewelers, the said Sh. Ajesh A. Patel is the beneficial owner of the cash i.e. the Benami property. It is seen that the cash in OHD notes and bank transfer from dubious entries worth Rs. 34,38,40,000 was deposited in the account of M/s Tirupati Jewelers and then transferred to the account of Sh. Ajesh A. Patel. The aspect of cash deposited shown in the bank by prop. of M/s Tirupati Jewelers as sales receipts by M/s Patidar Bullion cannot be relied on....
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....ls before of 08.11.2016. 17. Further, it was argued that, the basic ingredient as stated before namely holding of property, unaccounted property and immediate or future benefit to the ultimate beneficiary is not present. In light of the above, the Appellant, prayed for allowing the appeal. Submissions of the Respondent: 18. The Ld. Counsel of Respondent argued that no major business was carried out in the case of M/s Sai Bullion /Tirupati Jewelers in earlier years but out only during the demonetization period with the connivance of Sh. Kapil D. Patel along with the Appellant, the main person and prop. of Patidar Bullion has carried out the alleged sales and cash deposits. The so-called purchase and sales of bullion/gold and the subsequent cash deposit is the result of unexpected declaration of demonetization. The Appellant's arguments that the stock register is maintained in computer is not correct as the Department is having the hardcopy of the computer. The argument that the physical stock of 25 gms and 20-25 gms of M/s Tirupati Jewelers and M/s Sai Bullion were taken home by Sh. Dinesh C. Patel due to marriage occasion in family is also not correct as any layman can unde....
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....s Sai Bullion and M/s Tirupati Jewelers was transferred through RTGS/NEFT to the bank account of the Appellant, Prop. of M/s Patidar Bullion. However, no gold was given to M/s Tirupati Jewelers. Thus, proceeds of benami property was held in the name of M/s Tirupati Jewelers but in reality, gold was in the possession of M/s Patidar Bullion. Thus, the flow of cash ends with the Appellant, Prop. of M/s Patidar Bullion and hence he is the beneficial owner of that cash. 22. The Respondent also contended that the claim of the Appellant that the bullion purchased from M/s Patidar Bullion has been shown as sales against cash and if the cash deposit or transfer is considered as bogus, then there should be physical stock with the Appellant is liable to be rejected as the statement of Sh. Kapil D. Patel stated that stock/ bullion was purchased from M/s Ghanshyam Jewelers. Such bullion was sold to various parties and cash received was deposited in bank accounts of M/s Sai Bullion and M/s Tirupati Jewelers. Subsequently bullion was purchased from M/s Patidar Bullion and the stock was sold back to M/s Ghanshyam Jewelers. Further, he has also stated that M/s Sai Bullion and M/s Tirupati Jewelers....
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....roprietor of M/s Patidar Bullion is the Beneficial Owner. It is worth mentioning that the Beneficial Owner is the son-in-law of the Benamidar. The benami properties (movable) attached in these Appeals are the same as in the Appeal Nos. 230/AHD/2019 & 233/AHD/2019 above. 25. The facts in brief of these present Appeals are that the Beneficial owner Sh. Ajesh A. Patel is the Proprietor M/s Patidar Bullion and the Benamidar Sh. Dinesh C. Patel is the Proprietor of Sai Bullion. There are huge banking transactions between the Beneficial Owner and Benamidar during post-demonetization period. During the course of the investigation by the Income-Tax Department, relevant materials, datas were collected, statements were recorded and following discrepancies/deficiencies were found by the investigating authority. A) Non-production of CCTV footage. B) Accounts of M/s Sai Bullion not maintained in his office but maintained at the premise owned by M/s Patidar Bullion. C) Stock maintenance of M/s Sai Bullion at the premises of M/s Tirupati Bullion. D) Backdating and splitting of bills. E) Unaccounted cash and excess stock found during the search at M/s Patidar Bullion. F) Statement of ....
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....11/2016 and 8/11/2016. Major discrepancies noticed in the case of the Appellant are that from 01.04.2016 to 24.10.2016 cash sales were only Rs. 3.5 lakhs; on 25.10.2016, 26.10.2016, 27.10.2016, 28.10.2016, 29.10.2016, 30.10.2016, 05.11.2016 and 07.11.2016 the cash sales were of Rs. 9,80,21,699/-; on 08.11.2016 cash sales were shown at Rs. 7,53,99,270/-; all the cash sales reflected from 25.10.2016 are shown at less than Rs.1 lakh and details of purchaser such as name, address, PAN, etc. are not available; in cash memos there were neither signature nor acknowledgement of the party; similarly on 08.11.2016 M/s Sai Bullion (which is also managed by the present Appellant) has made cash sales of Rs.12,00,00,000/- to approximately 1800 customers in various weights, likewise M/s Tirupati Jewelers has made cash sales to approximately 900 customers meaning thereby on one single day Sh. Kapil D. Patel has handled 2700 customers approximately, which is impossible considering the process/procedure involved in bullion trading. It is claimed by the Appellant that no excess stock was found during the search at the premises of M/s Patidar Bullion. 29. The contention of the Appellant is refuted as....
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....lion versus Initiating Officer (IO), PBPT, Ahmedabad 30. A survey action was conducted u/s. 133A on 21.12.2016 at Axis Bank, Memnagar Branch on the basis of information that huge cash deposits were being made in the bank accounts of persons of no means as they were non-filers or had filed returns of income with meagre income. During the course of Survey various accounts were identified and it was found that six persons namely Afzalbhai Savjani Sadikali, Aftab H Kazi, Tejas C. Desai, Sayeed Babubhai Sisodiya, Zahir Abbas Kasamali Mithawala and Shaikh Imran Abdul Rashid were depositing huge cash in these bank accounts maintained at Axis Bank Memnagar in Old High Denomination Notes. During investigation it was established that the dummy accounts were managed and controlled by two groups i.e. (Ist) Afzalbhai Savjani Sadikali, & Tejas C. Desai and (lInd) Zahir Abbas Kasamali Mithawala and Aftab H Kazi and one individual. Two persons Sayeed Babubhai Sisodiya and Shaikh Imran Abdul Rashid had also deposited cash on behalf of Zahir Abbas Kasamali Mithawal and Aftab H. Kazi and one individual. In the Statement recorded on oath u/s. 131 of the I.T. Act it was admitted by Afzalbhai Savjani S....
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....does not belong to him and he had no business transactions with Sh. Ajeshbhai A. Patel. Sh. Ajeshbhai A. Patel also stated that Sh. Yogesh B. More used to transfer funds in proportion to the gold bullion. Delivery of bullion was done to Sh. Yogesh B. More. The statement of Sh. Ajesh A. Patel revealed that Sh. Yogesh B. More is a person of no-means while Sh. Ajesh A. Patel/ M/s Patidar Bullion is in receipt of remittances from "Raj Enterprises". It is evident that Sh. Ajesh A. Patel, is the beneficiary of such unaccounted cash deposits deposited in bank account of "Raj Enterprises" and is the beneficiary in respect of such amount which was collected by Afzal Savjani and Tejas desai. 32. Sh. Yogesh B. More stated in Statements recorded under section 131 or the Income Tax Act on 28.12.2016 and submission made in the proceedings under PBPT Act on date 07.07.2017 that Raj Enterprise was opened by Sh. Dashrath Nagar and Tejas Desai on his documents. He was not doing any work in Raj Enterprise and as per his information no work was going on in that firm. He had not done any transaction for transfer of RTGS/NEFT to M/s Patidar Bullion. He also clarified that the cash deposited in the acco....
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....has been said that he cannot be held a beneficial owner for this amount. It has been further said that the amount received for sale of gold bullion was further transferred to the supplier of the gold and the amount has not remained with him. Sh. Yogesh B More is a man of ordinary means and he has a very nominal monthly income who has allowed even his bank account to be used for this purpose for payment of a small monthly sum. He is not even aware of the quantum of the money that is being deposited in this account and he has no say in the operation of this account entire transactions are being managed by Sh. Sanjay M. Soni and he has deposited the demonetized currency notes amounting to Rs. 2 crore in the account of M/s Raj Enterprise which was subsequently transferred to the beneficial owner through RTGS. Therefore, the Ld. AA held, on the basis of the submissions made by the IO and the defendants and analysis of information, that Sh. Yogesh B. More was the Benamidar and Sh. AjeshBhai A. Patel was the Beneficial owner. Submission of the Appellants: 38. The Ld. Counsel for the Appellant has contended that the Appellant was carrying genuine business since many years and that one Sh....
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....e were genuine business transactions and that delivery of the bullion to Raj Enterprise was acknowledged by Sh. Sanjay M. Soni and Sh. Yogesh B. More, who took delivery of the bullion after signing the delivery challans and that the statement of Sh. Yogesh B. More recorded on 28.12.2016 acknowledged that the bank account in the name of Raj Enterprise was opened and operated by Tejas C Desai and Afzal Savjani and this has been accepted by Afzal Savjani and Tejas Desai in their statement recorded u/s 131 of the Income Tax Act dated 27.12.2018, i.e., that they were operating the said bank account. They have also furnished the requisite cash taken by them by way of an affidavit before the relevant authorities. It is pertinent to note that in their respective statement, there is no averment to the effect that the Appellant supplied any cash to them. There is no evidence to support receipt of cash from the Appellant. It has been consistently stated on affidavit that Sh. Sanjay M. Soni supplied the cash to the entry operators and instructed them to deposit the same. Thus, it is clear that no cash transactions were ever done by the Appellant. The transactions between the Appellant and Raj ....
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....the gold trade. He also denied having received gold from Sh. Sanjay M. Soni. Sh. Yogesh B. More on other hand had already denied having done any business transaction in his firm M/s Raj Enterprise and stated that his account is being operated by Sh. Tejas Desai in lieu of paltry sum of Rs.7000-8000. Sh. Yogesh B. More has also denied having received any gold in lieu of the RTGS made from his account. Sh. Tejas Desai and Afzal Savjani had submitted that they had deposited cash into account of M/s Raj Enterprise and thereafter transferred to the account of Appellant and that it is actually the scheme of the bullion dealers to bring into the main stream the unaccounted money in the form of OHD notes. The contention of the Appellant that Sh. Afzal Savani and Tejas Desai have accepted dealing in the OHD notes, and so under pressure of department to reveal the source of the OHD notes they might have stated name of Appellant, hence their statement is not reliable and that the Appellant has alleged that the search parties did not find major discrepancies in their accounts and the stock, hence when the purchases and sales have not been doubted by the department, the lone transaction of M/s ....
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....PA-PBPT- 230&233/AHD/2019 Sh. Kapil D. Patel, proprietor of M/s Tirupati Jewelers is the alleged Benamidar and Sh. Ajeshbhai A. Patel, proprietor of M/s Patidar Bullion is the alleged Beneficial Owner (BO). Similarly, in appeal Nos. 232 & 234/AHD/2019 Sh. Dinesh C. Patel, proprietor of Prop. M/s Sai Bullion, is the alleged Benamidar and Sh. Ajeshbhai A. Patel, proprietor of M/s Patidar Bullion is the alleged Beneficial Owner (BO). Whereas in appeal No. PBPT-231/AHD/2019 Sh. Yogesh B. More Prop. of M/s Raj Enterprise is the alleged Benamidar and, Sh. Ajeshbhai A. Patel, proprietor of M/s Patidar Bullion is the alleged Beneficial Owner (BO). In all the appeals the Appellant Sh. Ajeshbhai A. Patel is the Beneficial Owner (BO). The Ld. Counsel appearing for the Benamidars as well as Beneficial Owner has advanced common oral argument. 43. It was argued from the side of the Appellants that they are trading in bullions. It was further argued that the alleged transactions made in these References against the Appellants are not within the definition u/s 2(9) of the PBPTA and the assumptions of Income Tax Department that the Appellant Ajeshbhai A. Patel is the owner of the entire cash in al....
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....hree days on an average of 900 customers per day and that neither the Beneficial Owner nor the Benamidars have provided the name of the purchaser and their addresses for verification. It was also contended that the Appellants intentionally did not mention the name of the purchasers, their addresses and their PAN Card number in the back-dated bills by keeping the amount of transaction below Rs. 1,00,000/- and that the immediate benefit to the Benamidar and the Beneficial Owners is conversion of demonetized OHD currencies. It is further argued that the transaction amongst the Benamidar, Beneficial Owner and M/s Ghanshyam Jewellers and Raj Enterprises were arrangement which is within the parameters of Section 2(9)(A)(a) & (b). It is also argued that the Appellant Kapil D. Patel and Sh. Ajeshbhai A. Patel retracted their statements recorded u/s 131(1A) much after the initial statement given before the Income Tax Authority. Ld. Counsel appearing for the Respondent Authority has also submitted that the judgment of Hon'ble Supreme Court of India in case of Meenakshi Mills Ltd. v. CIT, Madras (supra) and judgment of Appellate Tribunal, PMLA (Benami Law) in case of V N Nandhini Devi vs. Sh.....
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....tion shall not include any transaction involving the allowing of possession of any property to be taken or retained in part performance of a contract referred to in section 53A of the Transfer of Property Act, 1882, if, under any law for the time being in force,- (i) consideration for such property has been provided by the person to whom possession of property has been allowed but the person who has granted possession thereof continues to hold ownership of such property; (ii) stamp duty on such transaction or arrangement has been paid; and (iii) the contract has been registered." 46. According to the aforesaid definition, the Benami transactions may be a transaction or an arrangement. The material made available to us goes to show that there were accommodation entries provided by M/s Ghanshyam Jewelers and M/s Raj Enterprises against some commission for routing the alleged unaccounted money during the period of demonetization. The so-called Proprietors of M/s Ghanshyam Jewelers and M/s Raj Enterprises have given their statements in this regard that they have lent their names against payment of commission, which goes to show that some arrangements were provided to the Benefic....