TaxTMI 
TaxTMI 
2026 (7) TMI 736
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....Bank of India, Bullion Exchange, Mumbai in the name of M/s Lakhya Jewels were provisionally attached. 2. Ld. Authorised Representative (A R) for the Appellant submitted that the allegation is purely on the basis of the statement of Shri Asit B Doshi, the alleged Benamidar in the matter. No evidence has been provided to prove that the alleged illegitimate and ill-gotten cash belonged to the Appellant. The Initiating Officer (IO) did not allow any opportunity of cross examination of Shri Asit B Doshi or that of Shri Mahesh Mangal (986799907), who had allegedly contacted Shri Ashit B. Doshi, for depositing the old currency notes, as stated by Shri Ashit B. Doshi in his statement under Section 131 of the Income Tax Act, 1961. Thus, the PAO has been passed without proper inquiry or verification and without allowing any opportunity of being heard or cross-examinations of other parties alleged to have been involved and therefore, the Order is bad in law. 3. Ld. A R for the Appellant argued that the various entities controlled by Shri Ashit B Doshi, which had purchased gold from Lakshya Jewels, were having credit facilities from the banks. This point can be verified from the bank acc....
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.... and nothing beyond that. The Appellant thus purchased 3,000 grams and in turn, remitted payment to M/s. Vimalsom Jewellers on 16.11.2016 of Rs. 91,08,000/- from the Appellant's Kotak Mahindra Bank. The Appellant issued Sales Bills to his customer on 17.11.2016 based on the remittance received and delivered the gold. Acceptance of the Gold was made by signing on the left side bottom of the Appellants' bills. The Appellant stated that he knew the Respondent No.2 due to a Flat booking inquiry by the Appellant with the Respondent No.2 who is in the construction business. The Appellant did not know any Shri Pradeep Pawar or Shri Mahesh Mangal till these proceedings. The Appellant did not pay any cash to any Shri Mahesh Mangal, the Respondent No.2 or Shri Pradeep Pawar or anyone. 6. Ld. A R for the Appellant submitted that a small and medium sized businessman (SME segment) cannot do a KYC akin to what bankers do today. In fact, if he so does, he will not survive in business. It is extremely pertinent to note that the statement of the Respondent No. 2 recorded on 01.12.2016 does not contain the Appellant's name nor any direct allegation of receiving cash directly or indirectly....
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....ri Ashit B Doshi after 08.11.2016 in the form of old denomination notes of Rs. 98,00,000/- and the same was transferred to M/s Lakshya Jewel, a proprietor concern of Shri Shitanshu Pradyuman Rai Rindani through banking channel. It is pertinent to mention here that in his statement dated 01.12.2016, Shri Ashit Balwant Doshi S/o Shri Balwant Pitamberdas Doshi (PAN:AACPD8921F) admitted that cash was deposited in the bank account of entities managed and controlled by him. He further stated that he received total cash amount of Rs. 98,00,000/- from Shri Mahesh Mangal of Vile Parle (mobile no. 986799907) for giving RTGS entries to M/s. Lakshya Jewels, and after deducting around Rs. 5,00,000/- as commission @5%, he gave RTGS entries of around Rs. 92,50,000/- to M/s. Lakshya Jewels (Rs.18,88,041/- from M/s. Aman Enterprises Rs. 36,82,561/- from M/s. Marina Trading and Rs. 36,88,576/- from M/s. Jai Ambe Enterprise). 9. Ld. Counsel for the Respondent stated that on verification of the details filed by the Beneficiary Owner (BO) (M/s Lakshya Jewels), it is seen that it submitted three bills bearing Sl. No. 047, 046 and 0147 on 17.11.2016 to the Firms of Shri Ashit B Doshi namely M/s Aman T....
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....is amount after deducting 5 percent commissions in his directly controlled & managed entities. It is also not in dispute that he was asked to transfer it by RTGS to the beneficiary account Kotak Mahindra Bank, SV Road opposite Pentaloon, Borivali (west) Mumbai, and accordingly after depositing in his entities, the RTGS was made to the beneficiary account. The entire amount had been given by the Beneficiary through one Shri Mahesh Mangal to the Benamidar, Shri Ashit B. Doshi who had deposited the money in his managed and controlled entities. The Beneficiary Owner had projected the receipt of RTGS money in his account against sale of gold to the 3 parties of Shri Asit B. Doshi and all other formalities of genuine sale were worked out. But it is not clear how could the sale be made to any unknown person for such huge amount of gold. It is also not clear how the rate of gold can be different from the standard rate of gold notified by the IBJA. The Benamidar did not come forward to make any submissions as he did not have any stake in the seized money as he had already taken his 5% share. Therefore, it appears that the contention of the Initiating Officer for treating the transaction as ....
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....e of gold bullion. We have examined the pleadings in each of the four Appeals made by the Appellants along with the evidence advanced by them as to deny the allegation that they indulged in benami transaction. 13. In the present matter, the Respondent has alleged that cash amounting to Rs. 98,00,000/- was deposited in the bank account of entities managed and controlled by Shri Asit B Doshi. It is further alleged that the said cash comprised of the demonetized currency and was deposited through one Shri Mahesh Mangal of Vile Parle. It is on record that Rs. 92,59,500/- was credited through RTGS in the account of the Appellant in Kotak Mahindra Bank, S V Road opposite Pantaloon, Borivali (West), Mumbai. It is further on record that on 15.11.2016 RTGS was received from M/s Marina Trading in two tranches of amount Rs. 18,07,600/- and Rs. 18,74,600/-. M/s Jai Ambe Enterprises transferred through RTGS on 15.11.2016 amounts of Rs. 18,17,400/- and Rs. 18,72,400/-. M/s Aman Enterprises transferred through RTGS on 15.11.2016 Rs. 18,87,500/-. Shri Asit B Doshi in his statement under Section 131 of the Income Tax Act, 1961 tendered before the Investigation Wing of the Income Tax Department c....
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....Appellant as to show that it had business relationship, from the past, with the three Firms. The claim that Shri Asit B Doshi was known to the Appellant because of property enquiry made from him cannot explain the present business transactions. Occurrence of such transactions within short period of the demonetization of the currency Note of denomination of Rs. 500 and Rs. 1000 cannot be overlooked. Moreover, the Investigation Wing of the Income Tax Department had intelligence to this effect. The statement of Shri Asit B Doshi under Section 131 of the Income Tax Act, 1961 taken under oath is admissible evidence. To challenge the said statement on the grounds that it was not taken in office of the Income Tax Department falls since such ground is frivolous and cannot be accepted. The explanation in terms of bills and other documents like purchase bills, ledger and stock statement suffer from being independent evidence as to substantiate the explanation offered by the Appellant. The bank statements in fact corroborate the transfer through the RTGS from unknown Firms. 17. The Appellant has alleged the violation of the principles of natural justice, in view of denial of opportunity to....
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....rocedural fairness, accuracy of outcome leading to general social goals, etc. Nevertheless, there may be situations wherein for some reason - perhaps because the evidence against the individual is thought to be utterly compelling - it is felt that a fair hearing 'would make no difference' - meaning that a hearing would not change the ultimate conclusion reached by the decision-maker - then no legal duty to supply a hearing arises. Such an approach was endorsed by Lord Wilberforce in Malloch v. Aberdeen Corporation [(1971) 2 All ER 1278 (HL)], who said that a 'breach of procedure...cannot give (rise to) a remedy in the courts, unless behind it there is something of substance which has been lost by the failure. The court does not act in vain'. Relying on these comments, Brandon LJ opined in Cinnamond v. British Airports Authority [(1980) 2 All ER 368 (CA)] that 'no one can complain of not being given an opportunity to make representations if such an opportunity would have availed him nothing'. In such situations, fair procedures appear to serve no purpose since 'right' result can be secured without according such treatment to the individual. In this be....
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....The third limb of the case of the appellants also in that view fails and is rejected." 20. In this regard, we find support from the three Judge Bench Judgment of the Hon'ble Supreme Court in State of U.P. v. Sudhir Kumar Singh, [(2021) 19 SCC 706]. The relevant paragraphs are extracted below: "42. An analysis of the aforesaid judgments thus reveals: 42.1. Natural justice is a flexible tool in the hands of the judiciary to reach out in fit cases to remedy injustice. The breach of the audi alteram partem rule cannot by itself, without more, lead to the conclusion that prejudice is thereby caused. 42.2. Where procedural and/or substantive provisions of law embody the principles of natural justice, their infraction per se does not lead to invalidity of the orders passed. Here again, prejudice must be caused to the litigant, except in the case of a mandatory provision of law which is conceived not only in individual interest, but also in public interest. 42.3. No prejudice is caused to the person complaining of the breach of natural justice where such person does not dispute the case against him or it. This can happen by reason of estoppel, acquies....