TaxTMI 
TaxTMI 
2025 (11) TMI 605
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....p with final hearing of the appeal as the respondent has shown satisfaction towards pre-deposit on deposit of Rs. 1,25,000/-. Accordingly, we would proceed to consider the case on merit. Brief facts of the case: 3. The respondents received an information that one B.M. Rakesh is indulging in transferring of foreign exchange abroad for import of furniture. The search was conducted on a residential and business premises of B.M. Rakesh where foreign and Indian currencies, apart from the documents were found and seized. The statements of Smt. Hemamalini Rakesh w/o B.M. Rakesh were recorded under Section 37(3) of the Act of 1999 read with Section 132(4) of the Income Tax Act, 1961. Smt. Hemamalini Rakesh pleaded ignorance about the business and the partnership, rather said to be a sleeping partner. B.M. Rakesh was examined by the respondents. His statements were also recorded under Section 37(3) of the Act of 1999 and considered for passing the order imposing penalty of Rs. 3,50,000/- for contravention of Section 3(c) of the Act of 1999, apart from penalty of Rs. 10,50,000/- for contravention of Section 3(b) of the Act of 1999 and penalty of Rs. 20,000/- for contravention of Sectio....
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....been in communication with B.M. Rakesh for transfer of foreign exchange. It is also a fact that foreign currency and documents were recovered from the residential and business premises of B.M. Rakesh. After considering all the material on record, the Joint Director passed the impugned order, finding involvement of the appellant for contravention of Section 3(c) and 3(b) of the Act of 1999. 5. Aggrieved by the order, the appeal has been preferred by the appellant. Arguments of counsel for the appellant: 6. The learned counsel for the appellant submitted that a case was not made out to hold contravention of Section 3(c) and 3(b) of the Act of 1999 to impose penalty of Rs. 3 lakhs for both the provisions. In fact, the respondents failed to show transfer of money out of India and even money received by the appellant. The impugned order has been passed based on surmises and conjectures. The allegation against the appellant mainly pertains to the receipt of a sum of Rs. 77,30,000/- from B.M. Rakesh on the instructions of Haneefa of Dubai and thereupon he made the payment to the credit of Mr. Matteo of M/s ITAL Program and Mr. Adamo of BGB India with the assistance of Poonam. ....
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....e collected. In terms of the modus operandi, the amount equivalent to the foreign currency was to be arranged in India and then to pass on to Shri Poonam for its onward transfer outside India in foreign exchange. The appellant admitted his commission @ 10 paise per US$ and 15 paise per Euro for transfer of foreign exchange abroad. In fact, it was to facilitate B.M. Rakesh who was involved in the business of furniture and accordingly, the appellant and others became the instruments for transferring the foreign currency. In view of the above, it is not only the statements of the appellant and others but there exists corroborative evidence which has been considered by the Authority below to draw his conclusion. The detailed finding has been recorded which is reproduced hereunder: "......that as he was not getting sufficient income from his business, he contacted one Mr. Poonam of Mumbai, (holding mobile No. 97989 52281) who is in the business of arranging /transferring foreign exchange, as per the instructions of one Mr. Haneefa of Dubai and requested him to help him; that Shri Poonam agreed and informed that he (Noticee No.2) has to collect the amounts in Bangalore and send ....
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....ot know the person by name Mr. Babulal, S/o Jogaramji resident of No. 18, Gopalakrishna Temple Street, Gandhinagar, Bangalore in whose name the said Airtel connection was registered and confirmed that he (Noticee No.2) is the person using the said mobile number; that he had removed the said SIM on 23-08-2013 and thrown it away and that he is keeping the mobile handset and undertook to produce the same on 26-08-2013. But he did not however produce the same. xiii) Noticee No.1 in his statement dated 27-08-2013 confirmed as true whatever he has stated in his earlier statements dated 22-08-2013 and 23-08-2013. When he was shown the statement dated 23-08-2013 given by the Noticee No.2 residing at 3rd Floor, 159, Kumbarpeth Main Road, Bangalore - 560 002, he went through the same and confirmed that whatever he i.e. Noticee No.2 stated about the transfer of total Euro 90,000 during June to August 2013 is true. When he was shown Election Identity Card No YUZ1064450 and driving license L.No. RJ1619920003638 issued by Licensing Authority at Jalore, Rajasthan on 26-08- 1992 issued to the Noticee No.2, he identified and confirmed that the photograph of the holder of the Election Ident....
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.... Hyderabad (who approached him directly) remittances, calculations, duty paid, clearance charges, VAT charges etc., for supply of furniture ordered by them; that the total value of the order was Rs. 11,31,449/- and Euro 3050 was remitted by him through his bank and the differential value ie., 40% equivalent to Euro 2033 was arranged to be transferred through Mr. Zuhir by paying an amount of Rs. 1,50,000/- to an unknown person; that in page No. 42-46 details of invoice raised by his firm M/s Vriddhi Interiors on M/s Samaavesh for supply of electrical lamps as ordered by one Mrs. Shubha of Bangalore are available; that the total order is valued at Rs. 63,653/- and that he has remitted Euro 455.60 though his bank and Euro 303 through Mr. Zuhir by paying equivalent amount of Rs. 22,000/- to an unknown person; that page No. 2 to 14 of file marked B contains details of Bills of Entry, VAT returns, packing details, etc., pertaining to imports made by him for supply to Samaavesh who in turn supplied the same to Shri Purushottam Redddy and M/s Woodmain Industries, which are already explained by him: that page 1 is a provisional invoice, wherein imports never materialized that page No. 46 co....
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....from his office premises, Shri B.M. Rakesh, inter-alia, stated that he has placed an order for a value of Euro 9,037 on M/s BGB Italia for supply of bathroom fittings for supply to M/s Samaavesh; that he has remitted Euro 5,422.34 through Canara Bank and the balance amount of Euro 3614.66 was transferred through Mr Zuhir by making a payment of Rs. 2,70,000/- to a person sent by Shri Zuhir in India; that invoice No. 46/2013 dated 23-04-2013 of M/s BGB Italia is an order placed on M/s BGB Italia for supply of bathroom fittings on behalf of M/s Samaavesh for a total value of Euro 1349.20; that he remitted Euro 809 through his bankers and the balance amount of Euro 540 through Mr. Zuhir by making a payment of Rs. 37,800/- to a person sent by Mr. Zuhir; that sheet No. 7,8 & 9 of file marked N is a copy of invoice No. 124/16.12.11 for a total invoice value of Euro 2,577.06 which pertains to purchase order placed by M/s Samaavesh on behalf of their clients Ravi Dharma; that he remitted Euro 1546.23 through his bankers and the balance amount of Euro 1030 through Mr. Zuhir of Dubai by making a payment of Rs. 69,000/- to a person sent by Mr. Zuhir; that page No. 68 of file marked N pertains ....