TaxTMI 
TaxTMI 
TaxTMI 
2026 (1) TMI 153
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....me construction materials like TMT Bar, Angle, Channel etc. Shri SK Patni is the head of their family having the status of Chairman & Managing Director of the SKP group Shri Rohit Patni & Shri Ankit Patni both are s/o Shri S. K. Patni were Directors of their manufacturing units. Smt. Sarita Patni, Smt. Neha Patni and Smt. Naina Patni are female members of their family and all these six having their PAN issued by the Income Tax Department and filing IT Returns to the department. During the survey, it was noticed that all six members have incurred a tax-free Income claimed under Long Term Capital Gains by using scripts of Luminaire Technologies Ltd and on that transaction they all have claimed the exemption of LTCG as provided in Income Tax Law. It was noticed that the family members of Ankit Metal Group have incurred the amount into their accounts as LTCG as shown in table below: Sl. No. Name of the party Amount received Reflected in Assessment year 1 Shri S K Patni Rs.80428579/- 2014-15 2 Smt Sarita Patni Rs.52447020/- 2013-14 3 Shri Rohit Patni Rs.76803116/- 2013-14 & 2014-15 4 Smt Neha Patni Rs.26737625/- 2014-15 5 ....
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....ted the same Modus Operand to settle their unaccounted money through these brokers and financial agencies an calmed the same as LTCG which was nothing but their pre-arranged bogus LTCG. On that basis, a team of Directorate of Income Tax (Investigation) conducted a survey on date 14.10.2015 In office of Ankit Metal & Power Ltd at SKP House, 132, S. P. Mukherjee Road Kolkata and residence of Patni family at 15, Burdwan Road, Kolkata-27 and statements of all above six members were recorded U/S 131 of the IT Act, 1961 regarding the issue of pre-arranged bogus LTCG. All the family members had accepted that Shri Ankit Patni was the master-mind to arrange these financial manipulations for their unaccounted case of Statements of all six members were marked as ANNEXURE-C1, C2, C3, C4, C5& C6. The salient part of the statements of Shri Ankit Patni, Director of M/s Ankit Metal & Power Ltd. recorded on the date of survey i.e. 14.10.2015 is furnished as to quote- "Q. 11- It is seen that your group has made Investment only in the scrip of LUMINΑΙ TECHNOLOGIES LTD. What was the financial rational behind it; how did you get the shares for the Individuals of ANKIT METAL Group? P....
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.... I will submit the same in the due course of hearing." 2.4 The similar interrogation was made by the officers of Income Tax department during the survey from all other family members and all of them have categorically accepted the above said Modus Operandi and relied upon the whole statements deposed by Shri Ankit Patni, Director of M/s Ankit Metal & Power Ltd and also the mastermind of Patni family. 2.5 Apart from detailed acceptance, all the family members have commonly admitted the fact and deposed during the survey before the Income Tax Officers. The relevant part of their statements is reproduced below to quote- "Q. 9: Please explain the modus operandi for getting pre-arranged bogus LTCG Ans: Shri Ankit Patni has already explained the modus operandi and I confirm the same Q10: Please explain the source of unaccounted money used by you and your group members which was used for pre-arranged bogus long term capital gain in the file of different individuals of Ankit Metal Group. Ans: Such cash was generated from some unaccounted trading done by our group Details of which I am unable to recall right now." 2.6 From the I....
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....r the manufacturing units such as M/s Rohit Ferro Tech Ltd BM/s Ankit Metal & Power etc., please state your source of Income during the FY 2012-13 & 2013-14 Ans: All our Income have been reflected in our ITR and Balance sheets for the FY 2012-1 2013-14 and copies of all those have already been submitted at your office during earlier statements. Q. No.6: It is noticed from the Assessment Report received from the jurisdictional Income Tax authority for the Assessment Years 2013-14 & 2014-15 that you have arranged bo LTCG against the script of LUMINAIRE TECHNOLOGIES LTD and notices have already been Issued by the IT department demanding due Income Tax. Please see the copies Assessment Reports and quote your remarks. Ans: Seen the copies of Assessment Reports as shown to me in case of M/s Ankit Metal Power Ltd for AY 2013-14 and Shri SK Patni for the AY 201314 & 2014-15 and Smt. N Patni for the AY 2014-15 and gone through in details but I am to say again that allegation charged in above said Assessment Reports are fictitious for which we have filed appeal before competent authorities. Q. No.7: Assessment reports itself describe the Modus Operandi ado....
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....ormation received from department against unaccounted sales of different goods of your factory. Put your remarks: Ans: Not at all sir. However, the survey was conducted against M/s Ankit Metal & Power Ltd. so any business activities in r/o. M/s Rohit Ferro Tech Ltd was never be a part of the Investigation. So far our family members are alleged for unaccounted trading this is simply to place that any trading business is never possible from all our manufacturing activities personal basis. So story of such unaccounted trading of goods are fully fictitious and I on behalf of all my family members deny all the allegations." 2.8 During the investigation carried out by the Central Excise A/E wing Durgapur, the alleged parties have denied their earlier statements given before the officers of Income Tax department during the survey and further investigations and referred that the statements were not their voluntary statements and thus they have retracted at the each stage of investigation carried out by the Income Tax Department. 2.9 Now the same is in natural conclusion that they may retract from their statement just because their benefits only but not the same h....
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.... Ankit Patni, Director of the sald assessee and duly authorized representative of Patni family who had played role of master-mind in the Instant case had been recorded U/S 14 of CEA, 1944 on 28.04.2017 and enclosed as Annexure- E to the SCN. 2.11 As a result and linking up all the points, Investigations and statements recorded so far, it appears that the said Noticee No.1 M/s Ankit-Metal & Power Ltd had cleared their finished goods valued Rs. 31,52,34,759/- during the Financial Years 2012-13 & 2013-14 without observing the Central Excise Law and procedure with clear intention to evade Central Excise duty amounting to Rs. 3,89,63,016/- (incl. cess) and suppressed the material facts. 2. On the basis of the above, a Show Cause Notice was issued to the respondent, to demand duty, along with interest, and to impose penalty thereon. 3. The matter was adjudicated by the ld. adjudicating authority by way of the impugned order wherein the proceedings against the respondent were dropped. 4. Against the said order, the Revenue is before us inter alia on the following grounds: - (i) The demand is based on receipt of amounts by way of sale of goods, which has been adm....