TaxTMI 
TaxTMI 
2026 (7) TMI 539
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....umbai 2. As per the facts of the case, the O/o BPU, Mumbai, received an information from the Investigation Directorate of Mumbai that Bank account of Shri Mumtaz Ali Mohd. Shaikh has been used by Shri Jagdish Khandelwal, who deposited de-monetized currency in the denomination of Rs. 500/- and Rs. 1000/- belonging to M/s Myrah Trade & Business. The said currency was deposited in the bank account of the proprietorship concern of M/s. Abhishek Enterprises in IndusInd Bank, Kalbadevi, Mumbai, having account No. 201000613601. The amount so deposited was later-on transferred to the account of M/s Myrah Trade and Business, in Bank of India, Kalbadevi, Mumbai, having account No. 000820110002774. It is also mentioned that Shri Mumtaz Ali Mohd. Shaikh during the course of his statement recorded on 01.12.2016 under oath u/s. 131 of the Income Tax Act has accepted that the bank account of his proprietorship concern M/s. Abhishek Enterprises has been used by Shri Jagdish Khandelwal for transactions. The said material part of statement is reflected in para 3 of the impugned order. The bank statement of proprietorship concern, M/s. Abhishek Enterprises reflects cash deposit of Rs. 15 lacs a....
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.... M/s Abhishek Enterprises? (vi) Whether appeal needs to be allowed for not giving opportunity for cross-examination of Sh. Mumtaz Ali Mohd. Sheikh, proprietor of M/s Abhishek Enterprises? Now, we will decide the above issues in the following paras:- 4. Issue no. (i) to (iv) are taken up together being interconnected. During the arguments, Ld. Counsel for appellant pointed out the three statements of benamidar Shri Mumtaz Ali Mohd. Shaikh recorded on 01.12.2016, 05.12.2016 & 08.02.2017 u/s. 131 of the Income Tax Act to the Investigation Directorate, wherein he specifically submitted that IndusInd Bank and Kotak Mahindra Bank accounts were used by one Shri Jagdish Khandelwal. He pointed out that there is nothing on record that the appellant through Shri Amrit Dhakad, or, any other member of HUF tendered any amount demonetized Indian Currency to the aforesaid benamidar during the period of demonetization, as alleged. He argued that in absence of any evidence against the appellant proprietorship concern for tendering the amount to alleged benamidar, Shri Mumtaz Ali Mohd. Shaikh or to Shri Jadish Khandelwal, the appellant cannot be branded as beneficial owner. He argued t....
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....aps with others also) about the prevailing gold prices, which was quoted to him by the Appellant. The Appellant had not seen, nor met, nor knew, Jitubhai (Jagdish Khandelwal) and the inquiry was routed through Rakesh Rathod, who was the front person for the Appellant. When Rakesh Rathod (in turn for Jitubhai) confirmed the rate quoted by the Appellant for 1 Kg of Gold bars, the terms of payment was stated as advance to which Rakesh Rathod agreed. But on 23.11.2016, the Appellants received RTGS payment of Rs. 15 lakhs i.e half of the amount agreed. Hence, the Appellant being upset gave delivery of half the quantity i.e. of 500 grams gold bars to Rakesh Rathod duly acknowledged/signed by Rakesh Rathod, and accordingly, made a Sale Bill (Bill No. M-T&B/04/16-17/GB) of Rs. 14.50 lakhs + VAT (total Rs. 14,67,400/-) in the name as told by Rakesh Rathod in the name of M/s. Abhishek Enterprises (Prop: Jitu Khandelwal) and the address and PAN as per provided by Rakesh Rathod because he alone knew the end customer/party. Rakesh Rathod told the Appellant to wait for the balance payment of 500 grams which would come the next day i.e. on 24.11.2016. Thereafter on the next day i.e. 24.11.2016, t....
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....tressed that the Benamidar has nowhere stated that he received any cash from Appellant, which in turn he deposited in his proprietary concern account of M/s. Abhishek Enterprises, with an understanding to return back to the Appellant later-on. He pointed out that no circular transaction is proved by the IO in the present case. He argued that no intention of benami is found by Ld. AA. There is no claim till date from M/s Abhishek Enterprises that no goods (gold bars) were received by them in-spite of making RTGS payment. No statement by Benamidar that he acted as a conduit, or Benamidar of Appellant, or that he even knew the Appellant, or dealt with the appellant directly. The alleged benamidar has not even taken the name of the Appellant is his statement. The benamidar has only stated that he acted for and on behalf of Jitubhai, and hence, there is privacy of relation between him and Jitubhai. In order to prove the said business transaction as genuine, the appellant relied upon following documents:- (i) Ledger confirmation by M/s Ekdant Commercial Private Limited of M/s Myrah Trade & Business at page 112, (ii) Text Invoices of M/s Ekdant in favour of M/s Myrah ....
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....Rs.2 lakhs. Buyers will also report this to tax authorities. • Proof of Identity and Address: Valid government documents such as Aadhaar card, Passport, Voter ID, or Driving License of buyers. • Proof of Purchase/Source: While not always mandatory, providing the original purchase bill or customs duty receipt (if the bar was imported) simplifies the process. Income Tax and Capital Gains • • Short-Term Capital Gains (STCG): If a person sells the gold bar within 24 months of purchasing it, the profit is added to his taxable income and taxed as per his applicable income tax slab. • Long-Term Capital Gains (LTCG): If held for more than 24 months, the profit is taxed at a flat rate of 12.5%. • Wealth Tax: There is no wealth tax in India, but the Income Tax Department allows buyer to hold gold without scrutiny as long as he can justify the source of the income or prove inheritance. Cash and Transaction Limits • • Banking Transactions: To avoid scrutiny and comply with anti-money laundering regulations, always request direct bank transfers or account payee cheques. • C....
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....as per the definition of "property" under Section 2(26) of the PBPT Act, "Property means assets of any kind, whether movable or immovable, tangible or intangible, corporeal or incorporeal and includes any right or interest or legal documents or instruments evidencing title to or interest in the property and where the property is capable of conversion into some other form, then the property in the converted form and also includes the proceeds from the property". Hence, cash is a property. Further, as per the definition of 'consideration' as provided under the Indian Contract Act, 1872 is: "Section-2(d) When, at the desire of the promisor, the promisee or any other person has done or abstained from doing, or does or abstains from doing, or promises to do or to abstain from doing, something, such act or abstinence or promise is called a consideration for the promise". In contract law, consideration refers to the exchange of value between parties that makes a promise enforceable. Consideration is an important element to fulfil the entire requirements of a legitimate contract. If the promised consideration fails to materialize, it can result in a breach of contra....
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....o clause (b), which is also covered in the present case, as the said amount from the bank account of benamidar M/s Abhishek Enterprises was later-on transferred to the account of appellant company, on different dates. It is immaterial whether the said property is held for a sufficient long period or immediately transferred after serving the purpose. The fact that property is re-transferred to the beneficial owner/appellant, after completion of the purpose for which it was given to benamidar, the provisions of the PBPT Act are clearly attracted and it does not exonerate any party to the benami transaction, if it is not a genuine business transaction. 8. We find that on 12.04.2017, the Mumtaz Ali Mohd. Shaikh has submitted in his statement on oath recorded u/s. 19 of the PBPT Act, 1988 that the bank account of his proprietorship concern M/s Abhishek Enterprises has been misused by Mr Jagdish Khandelwal, the Operator of the bank account, during demonetisation period for the benami transactions. The bank statement of proprietorship concern, M/s. Abhishek Enterprises reflects cash deposit amounting to Rs. 10,92,50,000, after demonetization of old Indian Government Currency, and there....
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.... 49,00,000 Unique Trading Company 28.11.2016 19,55,000 Biogen Global 29.11.2016 23,50,000 29.11.2016 23,36,500 Roy Enterprises 30.11.2016 55,00,000 30.11.2016 19,00,000 30.11.2016 40,00,000 30.11.2016 1,00,00,000 30.11.2016 19,00,000 Roy Enterprises 30.11.2016 48,50,000 Global Enterprises 30.11.2016 34,25,000 Global Enterprises 30.11.2016 6,00,000 Classic Enterprises 30.11.2016 30,00,000 Classic Enterprises 30.11.2016 25,75,000 Parshavnath Gems 30.11.2016 40,00,000 Parshavnath Gems 30.11.2016 10,00,000 Mehta Marketing Total 10,92,50,000 10,86,38,500 9. During the arguments, the alleged beneficial owner/appellant has submitted that the amount of Rs. 25 lakhs transferred to its bank account was against the sale of gold, which was duly reflected in its books of accounts and the same is a genuine business transaction. On the other hand, r....
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.... bar on 24.10.2016 for sum of Rs.15,23,060 from M/s Ekdant CPL and thereby increasing the outstanding book liability, as Rs.35,61,221. Thereafter, the appellant has shown payment of Rs.15,93,900 on 11.11.2016, against the purchase of gold bar for sum of Rs.15,93,900 on 11.11.2016, and thereby showing the maintenance of same outstanding balance as Rs.35,61,621 payable to M/s Ekdant CPL. Appellant has filed five Tax Invoices to show the purchase of gold bars, out of which two invoices are dated 24.10.2016 & 11.11.2016, whereas remaining three are for the month of January & February. The Invoice dated 24.10.2016 reflects purchase of gold bar of 500 gms @ 3010/gm amounting to Rs.15,05,000 plus VAT of Rs.18,060, totalling to Rs.15,23,060. The Invoice dated 11.11.2016 reflects purchase of gold bar of 500gms @ 3150/gm amounting to Rs.15,75,000, plus VAT of Rs.18900, totalling to Rs.15,93,900. Now, coming to the Tax Invoice dated 23.11.2016 issued by appellant in favour of M/s Abhishek Enterprises, it reflects delivery of 500 gms gold Bar @ 2900/gm on 23.11.2016 for sum of Rs.14,50,000 and VAT of Rs.17,400, totalling to Rs.14,67,400. The Tax Invoice dated 24.11.2016 issued by appella....
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....ed currency into genuine business transaction is not ruled out. 10. In view of our discussion in paras 5 to 9, we hereby hold that (i) Appellant is a beneficial owner, even in absence of any evidence of giving the demonetized currency of Rs. 25 lakhs for the purpose of conversion into credit entries, on the basis of documentary and circumstantial evidence, which points towards the direction that this is not a genuine business transaction. (ii) Hence, the appellant received Rs.25 lakhs from M/s Abhishek Enterprises, which is not a genuine business transaction for selling gold bars, but a strategy to convert the demonetized currency to transfer entries. (iii) The delivery of gold through broker Mr. Rakesh B. Rathod is not proved. (iv) The appeal cannot be allowed on the basis of affidavit procured from Mr. Rakesh B. Rathod, the alleged broker. Hence, issue no. (i) to (iv) are decided against the appellant. 11. Now, coming to issue no. (v), Mumtaz Ali Mohd. Shaikh was afforded opportunity to produce Sh. Jagdish Khandelwal for verification of his existence and role. However, Mumtaz Ali Mohd Shaikh could not locate Mr. Jagdish Khandelwal or g....