AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2026 (4) TMI 805
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.... under Section 46 of the Prohibition of Benami Property Transactions Act, 1988 (in short "the Act of 1988"), a challenge has been made to the order dated 14.11.2023 passed by the Adjudicating Authority, PBPTA, Mumbai confirming the provisional attachment of the properties while answering the reference sent by the Initiating Officer. Brief facts of the case: 2. It is a case where a search was conducted by the Income Tax Department in the premises of Shri Ramesh Chaurasia, Shri Achal Chaurasia and ARC group of companies on 15.02.2022. It was found that the income from online gaming business was shown to be out of the business of commodity, broking and management / business consultancy activities. It was revealed that M/s Adesh Ventures LLP (in short hereinafter referred as "AV LLP") had received bogus unsecured loan from various entities over a period of time. The funds were used to purchase listed securities and mutual funds. It is, otherwise, a Limited Liability Partnership firm incorporated on 01.10.2014 with total contribution of Rs. 2,00,000/-. The said AV LLP had invested more than Rs. 91 Crores in shares and mutual funds. It was using the LLP as benamidar by Shri Achal C....
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....onfirmed the provisional attachment of the properties and accordingly appeals have been preferred by the appellants herein. Arguments of the Ld. Counsel for the appellants: 5. Ld. Counsel for the appellants submitted that out of many appeals, few are by the corporate being LLP or private limited companies. Corporates have been taken to be the benamidars. The shareholder/partner of LLP to be the beneficial owners. 6. Ld. Counsel for the appellants has given description of the 5 separate orders passed in the year 2023. The details of the separate orders against each appellant has given as follows for the clarity and better understanding: Sl. No. Appeal No. Name of Entity Date of Impugned Order Pg. No. 1. FPA-PBPT-287 Adesh Ventures LLP 14.11.2023 11 2 FPA-PBPT-288 Achal R Chaurasia 10 3. FPA-PBPT-289 Ramesh L Chaurasia 10 4. FPA-PBPT-290 ARC Vastu Nirman Pvt. Ltd. 16.11.2023 11 5. FPA-PBPT-291 Achal R Chaurasia 11 6. FPA-PBPT-292 Ramesh L Chaurasia 11 7. FPA-PBPT-293 ARC International Pvt. Ltd. 17.11.2023 11 8. FPA-PBPT-294 Achal R Chaurasia 11 9. FPA....
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.... could not have taken a different view than taken by the Income Tax Department for making assessment of undisclosed income. Once the disclosed income was assessed, it could not have been taken to be a case of benami transaction. Ignoring the aforesaid, the impugned order has been passed on surmises and conjectures. 11. Ld. Counsel for the appellants, further, submitted that the theme of the benami transaction is earning of the shareholders/partners (beneficial owners) engaged in illegal betting and gambling business through which cash is alleged to have been generated. The cash was thereafter given to the third-party entities who thereafter provided accommodation entries to the corporate persons through various modalities. The allegation aforesaid could not be proved by the respondent despite burden of proof on them to make out a case of benami transaction. It is with the further statement that the shareholders and partners were discharged by various Courts in regard to the allegation of illegal betting and gambling, thus, it could not have been accepted to be a case of generation of cash out of illegal betting and gambling. The Adjudicating Authority failed to appreciate the af....
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....gh multiple websites such as www.gamekingindia.co.in, www.planetgonline.com and others in the garb of gaming sites, video game portals, gaming centres and cyber cafes. The huge unaccounted fund generated by the group from online gambling and betting was routed in the books of accounts by way of bogus security premium, bogus partners capital, bogus unsecured loan, bogus commission income, bogus trading and bogus capital gain. 17. The allegations aforesaid were defended by the appellants by filing reply to the notice served by the Initiating Officer followed by the Adjudicating Authority on a reference after causing provisional attachment order by the Initiating Officer. 18. The first argument raised by the appellants is that the BPU did not cause an independent enquiry to collect the material for making out a case of benami transaction. It has relied on the material seized by the Income Tax Department during the course of search and the statements recorded therein. No independent material was collected by the respondent by causing an enquiry and therefore the entire proceedings for provisional attachment of the properties after holding it to be the benami transaction deserves ....
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....uld have been worth of acceptance. However, in the instant case the beneficial owner infused the money in favour of other companies to reach ultimately to the benamidar company. With the adoption of the route at the first instance, a case of benami transaction was made out because money was not infused by the beneficial owner in his own company but it routed through other companies and with the adoption of the route at the first instance, a case of benami transaction was made out. 21. The main issue now remains as to whether the material supplied to the respondent was sufficient to make out a case of benami transaction. For the aforesaid, we need to analyze the evidence on which reliance has been placed. During the course of search, electronic evidence to show routing the cash and keeping account/ managing record of such movement under the head "Hisab" was recovered. The statement of Sameer Chowdhary (CA of AV LLP / ARC Group) was recorded who stated that he was managing the cash and routing it through ARC entities. He accepted to have provided accommodation entry to the tune of Rs. 1000 Crores into ARC entity. 22. Apart from the statement of aforesaid, statement of Purvi Ash....
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....erwise, statement of other witnesses i.e. Lokesh Kumar Khavya, Saurabh Sethi, Yogesh Jangid, Sanjay Shah and Hauman Mal Tatar were further fortified the allegations which could not be nullified by the appellants. They could not defend the allegation of cash transaction out of gambling and betting and thereupon routing it through accommodation entries. The appellant rather submitted that the amount came to ARC Group was out of the premium, capital, unsecured loan, commission and other transactions. It was found that as against the capital contribution, the fund infused by the company in share and in the mutual funds is Rs. 82.37 Crores while initial capital contribution was Rs. 2,00,000 and thereupon to be of Rs. 18000 as fixed capital by M/s Penant Commotrade Pvt. Ltd. and Rs. 20000 by M/s Authentic Finance Pvt. Ltd. It is apart from the fact that the ARC group said to have received unsecured loan with the admission that no repayment of loan was made. The defence aforesaid is falsified when the appellant made a reference of the income-tax assessment showing income out of agriculture which defence was not taken earlier but was to seek assessment of undisclosed income. The theory of ....
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....as assessed the undisclosed income, such income should not be accepted for benami transaction despite making out a case. In view of the above, we are unable to accept any of the arguments raised by the appellants. 26. The reference of few statements has been given by us, however, we further analyze the case. The complete modus operandi of routing the cash and for keeping the account, it was recorded in "Hisab". At this stage, we may refer to certain material relied by the respondent and has been analyzed by the Adjudicating Authority. The relevant para 5.1 is quoted hereunder for ready reference: 5.11 From the "Octonwards Final" it is seen that M/s. Adesh Ventures LLP has received funds in the form of unsecured loans and partner's capital from Penant Commotrade Pvt. Ltd. and Authentic Finance Pvt. Ltd. The amount has been received as unsecured loans and partner's capital from these entities against the cash which has been recorded by Smt. Purvi Ashara in its "Hisab" under the worksheet of Sh. Sameer Chaudhary naming it as "SC". The amounts in the sheet match with the amount received in the bank account of M/s. Adesh Ventures LLP. Thus "Octonwards Final"....
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....lowing: • I make and maintain a monthly summary of the cash delivered to third party entities (as per the hisab sent to me by Mr. Shivbabu Chaurasia) and the corresponding cheque/bank entries received in the bank accounts of ARC group companies. Further, this fact is substantiated by the statement given by CA Sameer Choudhary in which he has stated that he has provide accommodation entries for ARC group. Relevant part of the statement is reproduced below: Q.14 Please explain the kind of consultancy provided by you to ARC Group. Ans. Sir, as far as I know, Rakesh, Achal and Aadesh Chaurasia are also in the business of online gaming through which cash is generated. I am not involved in the cash generation part. I am handed over some cash from time to time by ARC and I think the cash handed over to me is from online gaming business. I help the ARC Group to systematically route this cash into books of account of several companies in ARC Group as accommodation entries, There is a person by name Shiv Chaurasia who contacts me on Whatsapp from his number +1 520 433 3783. He is ARC Group's single point of contact for me for cash handling. He i....
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....nic document have been quoted to find out whether sufficient evidence was available to find out a case of benami transaction. It is necessary to add that for reliance on the electronic evidence, necessary certificate was obtained by the respondent. The electronic evidence was sufficient to corroborate the statement of the witnesses. 29. Ld. Counsel for the respondent has made a reference of the retraction of the statement of the witnesses without realizing that retracted statement can be relied if corroborative evidence existed. It is with the clarification that retraction of the statement cannot be for the sake of it, rather, it is not that statement was recorded in the custody so as to make a case of retraction unlike in the case of the Customs and under similar legislation. The retraction of the statement cannot be accepted for the sake of it as no justified reason for it was given with proof and otherwise statement of the witness is corroborated by the electronic evidence collected by the respondent. 30. It is a case where the beneficial owner generated unaccounted cash out of the gambling and betting and thereupon was channelized through the entities to infuse it in the ....
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....nal case, the prosecution has to prove its case beyond doubt and for that they may have relied the evidence collected during the course of investigation wherein in the present matters there is no such rigour, rather, material collected by the Income Tax Department can be relied in the proceedings for the Act of 1988. Thus, in view of above, the case of the appellants cannot be accepted in their favour. 33. In the light of above discussion, we do not find any merit in the arguments raised by the appellants and accordingly appeals fail and are dismissed. ============= Document 1 STATEMENT OF ACCOUNT INDIAN BANK MANDVI BRANCH 281/287 Narsi Natha Street Kanmoor House Mandvi Mumbal Maharashtra 400009 Branch Code: 16 Phone No: 23757755 / 2 IFSC: IDIB000M013 Account No. : 6660996550 Product : CORP CA-GEN-METRO/URBAN- ADESH VENTURES LLP A 1602, 16TH FLOOR, NAMAN MIDTOWN SENAPATI BAPAT MARG INR DADAR W MUMBAI 400028 Currency : INR Statement From 04/08/2018 to 28/09/2022 Date : 28/09/2022 Time : 12:50:25 E-mail : Nominee name : Cleared Balance : 29,874.82Cr Uncleared Amount : 0.00 Page No. : 4 Limit : 0.00 Drawing Power : 0.00 Int. Rate....
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....ne No: 23799755 / 2 IFSC: IDIB000M013 Account No. : 6660996550 Product : CORP CA-GEN-METRO/URBAN- ADESH VENTURES LLP A 1602, 16TH FLOOR, NAMAN MIDTOWN SENAPATI BAPAT MARG NR DADAR W MUMBAI 400028 Currency : INR Statement From 04/08/2018 to 28/09/2022 Date : 28/09/2022 Time : 12:50:25 E-mail : Nominee name : 29,874.82C Cleared Balance : Uncleared Amount : 0.00 Page No. : 3 Limit : 0.00 Drawing Power : 0.00 Int. Rate : 13.80 % p.a. Post Dt Vai Dt Details Chq. No. Debit Credit Balance BROUGHT FORWARD 88,07,375.16Cr 08/07/20 08/07/20 BY VOUCHER TER 50,00,000.00 1,38,07, 375.16Cr MONBAI F ORT AUTHENTICFINANCE RIGS - HDPCR5202007088734481 FEM 98905000120 09/07/20 09/07/20 BY VOUCHER TER 75,00,000.00 2,13,07,375.16C: MUMBAI P ORT AUTHENTICFINANCE RIGS - HDFCR5202007098743492 FEM 98905000120 10/07/20 10/07/20 BY VOUCHER TER 1,00,00,000.00 3,13,07,375.16C: MOMSAI P ORT AUTHENTICFINANCE RIGS - HDFCR5202007108760770 FRM 98905000120 10/07/20 10/07/20 DR 2HRD CHQ 156096 1,30,00,000.00 1,83,07,375.16C: ADESH AKRIFARM LLP 10/07/20 10/07/20 DR THRO CHQ 441214 71,80,000.00 1,11,27, 375.16Cr ....