TaxTMI 
TaxTMI 
2026 (8) TMI 173
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....ovisionally attached. 2. Ld. Counsel 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 Mangilal, 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. Counsel for the Appellant argued that the two entities viz M/s Aman Trading and M/s Marina Trading controlled by Shri Ashit B Doshi, which had purchased gold from M/s Raksha Bullion, had actually transferred Rs. 60,00,000/- and Rs. 35,00,000/- to the bank account of the Appellant. Ld. Counsel argued that the IO failed to appreciate the point th....
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....lant submitted that the Ld. AA held that the sale of Rs. 1,00,00,000/- of gold as huge amount, which is not correct. It is submitted that Gold rates are published by many authorities and IBJA (Indian Bullion and Jewellers Association) is just one of them. Many other rates are available in the public domain, hence the price of gold taken by the Appellant cannot be rejected as true value. He further argued that the fact the Respondent No.2 (Benamidar) does not appear before the IO/AA nor makes any submissions nor retracts his submission, the same cannot be used adversely against the Appellant. He therefore prayed for allowing the Appeal. 8. Ld. Counsel for the Respondent submitted that the office of Initiating Officer received information from the Investigation Directorate of Mumbai, related to benami transactions of M/s. Raksha Bullion (PAN: AAHFR2224C). According to the information received, the cash was deposited in the bank account of Shri Ashit B Doshi after 08.11.2016 in the form of old denomination notes of Rs. 1,00,00,000/- and the same was transferred to M/s Raksha Bullion, through banking channel. It is pertinent to mention here that in his statement dated 01.12.2016, Sh....
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....ppellant took 10 to 12 days for delivery. Ld. Counsel also submitted that Shri Girish Sarkaria, through whom the Appellant claimed that it was contacted for sale of gold failed to comply with summons issued by the Department under Section 19 of the PBPTA. Ld. Counsel stated that the reasons for the Appellant to have agreed for the sale without KYC and booking receipt are not clear. Ld. Counsel further argued that it is clear that the rates given by the Appellant on bills dated 21.11.2016 were far different than the prevailing rates in the market on that date. The rate of gold without VAT was worked out at Rs. 29,500/- per 10 grams, which was far below the market rate. The weight of gold bars reflected on the bills was illogical and odd. These facts also establishes that the documents created by the Appellant were not at all reliable and were mere paper entries created to give the colour of genuine business transaction to the benami transaction and to mislead the I.T. Authority. 10. Ld. Counsel for the Respondent submitted that nobody denies the facts that the amount of Rs. 1,00,00,000/- was received by Shri Asit B. Doshi in old demonetised currency. He deposited this amount afte....
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....ra Enterprise, FPA-PBPT-170/MUM/ 2018 filed by M/s Shree Nakoda Gold and FPA-PBPT-178/MUM/ 2018 filed by M/s Raksha Bullion. 12. We cannot refrain from making the preliminary observations that the facts in each of the four cases relate to allegation of deposit of demonetized currency in the near proximity of the date of 8th November, 2016 when the Notes of denomination of Rs. 500 and Rs. 1000 were demonetized and were withdrawn out of circulation through the Orders of the Government of India. In each of these four cases, Shri Asit B Doshi was approached through an intermediary for deposit of demonetized currency in the Banking Channel, so as to entail transfer of the said amounts through RTGS to the bank accounts of one of the four Appellants named in the preceding paragraph of this Order. Shri Asit B Doshi identified the names of the Firms in whose bank accounts the demonetized currency had to be deposited, so as to effect the desired RTGS. None of the Appellant in any of the Appeals has denied having been credited the RTGS amount in the bank account of its Firm. However, the Appellants have taken the defence that such amounts were received against payment for sale of gold bull....
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....ted in the bank accounts of Shri Ashit Doshi, entry of sales was made in the books of Appellant and the bills were issued, then, Shri Ashit Doshi routed the money to the bank of the Appellant through RTGS. Just like in the case of entry operators, the Appellant was also very well equipped with the documentary evidences, which in-fact are not the genuine evidences but are the fabricated entries in the books and papers. 16. The fact that deposit of cash amount of Rs. 1,00,00,000/-with Shri Asit B Doshi has not been denied. Even the RTGS to the bank account of the Appellant from two Firms which are linked to Shri Asit B Doshi is matter of record. There is nothing produced by the Appellant as to show that it had business relationship, from the past, with the two Firms. 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 ....
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...., prejudice has been established by the aggrieved party. The relevant paragraphs are extracted herein: "We are not concerned with these aspects in the present case as the issue relates to giving of notice before taking action. While emphasizing that the principles of natural justice cannot be applied in straight-jacket formula, the aforesaid instances are given. We have highlighted the jurisprudential basis of adhering to the principles of natural justice which are grounded on the doctrine of procedural 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 substan....
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....he Adjudicating Authority to permit cross examination of the witnesses producing the documents cannot even on the principles of Evidence Act be found fault with. At any rate, the disclosure of the documents to the appellants and the opportunity given to them to rebut and explain the same was a substantial compliance with the principles of natural justice. That being so, there was and could be no prejudice to the appellants nor was any demonstrated by the appellants before us or before the Courts below. 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 ....