TaxTMI 
TaxTMI 
TaxTMI 
2025 (8) TMI 273
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..../- including Bank Accounts (whichever could be traced out) 2. The impugned order reveals that a reference was received from Deputy Director of Income Tax (DDIT, Inv.) Parwanoo. Documents related to enquiries conducted regarding deposit of demonetized currency in a bank account and its subsequent transfer to bank accounts of 4 Beneficiaries [namely, M/s Shree Nath Jee Electronics, M/s Superior Technology (Partnership firm of Sh. Ashiwini Kumar Kapoor), M/s MJ Gold Pvt. Ltd. and M/s Shivam Enterprises] were forwarded to Initiating Officer, Benami Prohibition Unit Chandigarh (IO). The present appeal deals with M/s Shivam Enterprises only. 3. Subsequently, a survey Operation u/s 133A of Income Tax Act had been conducted at the business premises of one Sh. Ashwani Kumar Kapoor. Information in this case, provided by the DDIT (Inv.), Parwanoo vide report dated 19-05-2017, was that Rs. 2,45,25,000/- cash was deposited in a bank account with PNB, Parwanoo [major portion had been deposited during the period 08-11-2016 to 30-12-2016 when currency notes Rs. 500/- and Rs. 1,000/-denomination were de-monetized and some portion of this amount was discovered to have been deposited in the calenda....
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....ntaining the Notices and also did not give any reply. It was also confirmed later on by Sh. Ashwani Kumar Kapoor that the Sh. Amit Kumar Verma whom he knew and with whom he did business was the one whose photograph was there in the bank records. Since, Sh. Amit Kumar Verma who was resident of Indra Nagar, Urai, District Jalaun, Uttar Pradesh and is different from the individual whose photograph was present in bank records from which it is clear that Sh. Amit Kumar Verma residing in Uttar Pradesh had no connection at all with the said bank account number 2912005500000198 in PNB, Parwanoo Branch. Thus, the matter was not followed up further with him in capacity of a Benamidar and it was concluded that the real Benamidar is Sh. Ashwani Kumar Kapoor instead of Sh. Amit Kumar Verma (the person resident of Uttar Pradesh). 5. On the basis of the above, the IO filed that Reference no. 408/2018 before the Ld. AA for confirmation of the attachment. The Ld. AA, after hearing both sides and taking into consideration the relevant material placed before it, held that the subject property under the reference is a Benami Property and confirmed the attachment order dated 22.12.2017 passed u/s 24(4....
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....with M/s Rishi Hardware; and these documents have not been properly considered. 11. The Appellant also contended that it was not involved in any illegal transaction and that the Appellant got the money for the goods loaded on the transport vehicle belonging to Mr. Aswhini Kumar Kapoor and once they were loaded, the Appellant was no longer responsible and that the Appellant had received the consideration from the bank account of M/s. Rishi Hardware for which goods were loaded on the transport vehicle belonging to Mr. Aswhini Kumar Kapoor and that the Appellant was not obliged to know whether the actual delivery has been taken by M/s. Rishi Hardware or Sh. Ashwini Kumar Kapoor. The reference in this regard may please be made to the judgment of Hari Krishna Kanoi Vs. Appropriate Authority & Ors., [1993] 71 TAXMAN 413 (Cal). 12. It was also contended that the Ld. AA failed to look into the intention of the Appellant. In this regard the Appellant has cited Binapaani Paul vs. Pratima Ghosh Ors. In Appeal (Civil) 8098 of 2004, First ITO vs. MR Dhanalakshmi Ammal 1978 ITR413 passed by Hon'ble High Court of Madras and Jaidayal Poddar vs. Bibi Hazra AIR (1974) SC 171 passed by the Hon&....
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....e bogus. e. Enquiries from the Income Tax database were conducted and it was seen that no Return of Income has ever been filed by M/s Rishi Hardware. Further, Sh. Ashwani Kapoor was not knowing the location and address from which the so- called M/s Rishi Hardware had been conducting business (if in reality it was doing any business) from 2012 onwards till 2017. Hence M/s Rishi Hardware is a fictitious entity. f. All the transactions done through the accounts of M/s Rishi Hardware, a fictitious entity, are held to be benami in nature and because the cash belonging to the respective Beneficial Owners was deposited in this account and then transferred back through cheque to the respective Beneficial Owners, in the guise of sales consideration [the sales actually never having taken place], the transactions fall within the definition of "Benami Property Transaction" [the consideration for the cheques having been paid by the Beneficial Owners themselves. 15. On the aforesaid grounds, the Respondent prayed for the dismissal of the appeal. Analysis and findings: 16. We have heard the argument and perused the material on record. 17. Section 2(9) of the PBPTA deals with the definitio....
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.... 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." 18. 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 Rishi Hardware for routing the alleged unaccounted money during the period of demonetization. It has come on record by way of statement of Sh. Manish Bagga (employee of Sh. Ashwini Kumar Kapoor) that he (Manish Bagga) filled up the pay-in-slips for deposit of the respective cheques. Manish Bagga admitted in his statement that he had never either seen or met anyone named Sh. Amit Kumar Verma and that it was Sh. Ashwani Kumar Kapoor who had handed over the cash to him with the instructions that the said cash should be deposited in the account of M/s Rishi Hardware with PNB, Parwanoo Branch. Sh. Manish Bagga clearly stated that he did not know a....
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....es. The Appellant claimed that this was payment for goods sold, however, the evidence stands on the contrary as there is no actual delivery of goods. Moreover, there is no person named Sh. Amit Kumar Verma who is the supposed proprietor of M/s Rishi Hardware and the KYC documents were forged. 23. That the evidence available on record goes to show that the bank account in the name of M/s Rishi Hardware is Benami account in the name of non-existent person. There is also no income tax database and no ITRs ever filed on behalf of M/s Rishi Hardware. 24. It also appears from the record that the claim of the Appellant that the electronic goods were sold by the Appellant to M/s Rishi Hardware is backed by fabricated documents to justify receipt of amount in their account. The bank account of M/s Rishi Hardware was actually operated by Sh. Ashwani Kumar Kapoor himself and all the cash in this bank account was deposited by Sh. Manish Bagga who is employee of Sh. Ashwani Kumar Kapoor. This fact is corroborated by the pay in slips filled up in handwriting of Sh. Manish Bagga as well as his statement that cheques for transferring the amounts were handed over to him along with the cash by Sh.....
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.... show that Appellant knowingly participated in a sham transaction with a non-existent entity. The cash was deposited by Sh. Bagga, employee of Mr. Kapoor, and cheques were issued to the Appellant in a highly coordinated manner. The Appellant benefitted directly from the fictitious account-thus it cannot escape liability by blaming the bank. 30. The contention of the Appellant that there is no connection between Mr. Manish Bagga (who deposited the cash) and the Appellant also cannot be accepted because it is immaterial whether the Appellant knew Mr. Bagga or not. What is material is the fact that Mr. Bagga was acting on behalf of Mr. Kapoor, who operated the fictitious account. The Appellant received funds from this fictitious account. The circulation of cash from the account of M/s Rishi Hardware to the Appellant by issuing cheques demonstrates the Appellant's role as a Beneficial Owner. 31. The contention of the Appellant that once the goods were loaded on the transport vehicle of Mr. Kapoor, the Appellant was no longer responsible and that it received money from the account of M/s Rishi Hardware for goods sold cannot be accepted as the Appellant failed to produce any document t....