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2015 (4) TMI 542 - ITAT AHMEDABAD

2015 (4) TMI 542 - ITAT AHMEDABAD - TMI - Addition on account of alleged advances to Shri Niranjan Shah out of undisclosed sources - whether CIT(A) erred in relying upon statement of assessee recorded by FEMA for drawing adverse inference without considering the fact that said statement in such transactions other than FEMA already stood reflected in his statement recorded by Income Tax Authorities - Held that:- In this particular case there are irrefutable evidences that not only the two parties .....

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red additions. The additions are therefore, confirmed in all the appeals.

The evidence discussed i.e. the entries appearing in the seized documents coupled with the statements of the noticees, as well as other persons whose names are figuring in the documents seized, from Sh. Niranjan Shah as well as the admissions made by the notices, (other than Sh. Niranjan Shah) it is satisfying that the charges levelled against S/ Sh. Niranjan Shah, J.K. Doshi, Parag Kumar Pal, Nikhil R. Parikh a .....

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without any malafides, due to the exigency of the circumstance, the penalty of ₹ 4,50,000/- (Rs. Four Lacs and fifty thousand only) Imposed on Sh. Niranjan Shah, ₹ 90,000/- (Rs, Ninety thousand only) imposed on Sh. J.K. Doshi, ₹ 8,500/- (Rs. Eight thousand five hundred only) imposed on Sh. Parag Kumar Pal B, ₹ 1,500/- (Rs. One thousand five hundred only) imposed on Sh. Nikhil R. Parikh and ₹ 10.000/-(Rs.Ten Thousand only) imposed on Sh. Nirish Babulal Shah should be .....

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th direction to decide the issue at hand as per fact and law and in light of subsequent development as discussed above, of course, after providing due opportunity of being heard to the assessee. Since we are restoring the issue on preliminary ground and on for the reasons discussed above, we are refraining to comment on merit at hand. - Decided in favour of assessee for statistical purposes. - I.T.A. Nos. 390 to 396/Ahd/2013, W.T.A. Nos. 02 to 08/Ahd/2013 - Dated:- 31-3-2015 - Shri Shailendra Ku .....

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following grounds: 1. The learned CIT(A) has grievously erred in law and on facts in once again confirming the addition of ₹ 1,83,37,910/- on account of alleged advances to Shri Niranjan Shah out of undisclosed sources while ignoring the specific directions issued by the Hon'ble ITAT and wrongly relying upon the CIT(A)'s order dated 30/03/2000 against which the appeal before the Hon'ble ITAT stood decided and set-aside for granting cross-examination of Shri Niranjan Shah. The .....

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ot have any financial transactions with the appellant in cash and that such transactions appearing in A/c. No. 36 maintained by him and found from his possession are pertaining to him only and the appellant has nothing to do with the same, the impugned addition in the hands of the appellant based on such material is wholly unjustified and bad in law and accordingly requires to be deleted/quashed. 3. The ld. CIT(A) has further erred in relying upon the statements of the appellant recorded by the .....

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his cross-examination statement recorded pursuant to directions of the Hon'ble ITAT. 5. The ld. CIT(A) has further erred in law and on facts in not appreciating the fact that the impugned addition made by the AO is based on material found and seized from a third party and not from the appellant. Accordingly, the provisions of section 132(4A) being applicable to such third party, the impugned addition requires to be deleted. 6. The ld. CIT(A) has erred in law and on facts in dismissing the gr .....

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terest is required to be charged. 3. The quantum of addition varies in different appeals as per column 4 as under: AY Original returned income Returned income in response to notice u/s 148 Income assessed as per order u/s 144 rws 254, now appealed against 1986-87 33,179 9,46,652 1,83,37,910 1987-88 21,550 No return filed 24,85,790 1988-89 34,530 5,89,530 28,60,850 1989-90 1,70,150 8,20,150 Commission income ₹ 6.50 lac from M/s International Agency disclosed 28,95,550 1990-91 1,79,446 (asse .....

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AY 1986-87 ₹ 9.00 lac AY 1988-89 ₹ 5.55 lac AY 1989-90 ₹ 6.50 lac AY 1990-91 ₹ 5.30 lac AY 1991-92 ₹ 39.30 lac Rs.103.75 lac 3.2 The aforesaid disclosure was in respect of share holding in Patwa Investment & Finance Ltd., Lyka Leasing & Finance Ltd. and Dharnidhar Leasing & Finance Ltd. to the extent of ₹ 95.75 lacs and the balance disclosure of ₹ 8 lac was in respect of cash found during course of search. 3.3 Assessments for A.Y.1985-86 to A .....

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ed Income (Rs.) 1985-86 25-03-1994 1,56,20,100/- 1986-87 25-03-1994 3,52,22,720/- 1987-88 25-03-1994 1,63,84,320/- 1988-89 25-03-1994 1,51,79,560/- 1989-90 25-03-1994 1,14,01,420/- 1990-91 13-03-1997 8,20,450/- 1991-92 29-03-1994 15,51,190/- [u/s.l43(3)] 1992-93 28-03-1995 70,59,530/- 3.4 Matter was carried before the First Appellate Authority, who vide appellate order dated 31.03.1995, partly confirmed, partly deleted and partly set-aside the assessments. Meanwhile, issues of undisclosed invest .....

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he years in which it was originally disclosed. Meanwhile, set-aside assessments for the said years were, finalized as under: A.Y. Date of Order Assessed Income (Rs.) Orders passed u/s. 1986-87 21-12-2000 1,83,37,910/- [u/s.143(3) r.w.s. 250] [u/s.143(3) r.w.s. 250] 1987-88 27-03-1998 24,85,790/- [u/s.143(3) r.w.s. 250] [u/s.143(3) r.w.s. 250] 1988-89 27-03-1998 28,60,850/- [u/s.143(3) r.w.s. 250] [u/s.143(3) r.w.s. 250] 1989-90 27-03-1998 28,95,550/- [u/s.143(3) r.w.s. 250] [u/s.143(3) r.w.s. 25 .....

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1/2006 set-aside the appeals for A.Ys. 1986-87 to 1992-93 (Income Tax) and A.Ys.1985-86 to 1991-92 (Wealth Tax) and A.Ys. 1989-90, 1990-91 and 1992-93 [against CIT(A)'s order dismissing application u/s.154 of the Act] to the file of the Assessing Officer for denovo assessment with the following observations: "After careful consideration of the rival submissions and the facts and circumstances of the case, we are of the opinion that so far as IT appeals are concerned, it is an admitted f .....

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ut before Assessing Officer of Shri Niranjan Shah at Bombay and it is also an admitted fact that the Assessing Officer of Shri Niranjan Shah at Bombay did not allow the assessee an opportunity to cross examine Shri Niranjan Shah, rather directed him back to his Assessing Officer with the directions that cross examination will be allowed by appellant's Assessing Officer itself. It is further an admitted fact that when the assessee approached back to his own Assessing Officer, he was not allow .....

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the assessee is entitled to have the copies of the same and furnish replies as he may deem fit, but in case, the Revenue relies on certain details prepared by third party or statement of a third party, then the assessee is not only entitled to get the copies of the same but is entitled to crossexamination of the person who has prepared such details or had given statement also, as the case maybe. So as the present cases are concerned, it is an admitted fact that both the Assessing. Officers, (i. .....

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anjan Shah, but made him run to the Assessing Officer at Bombay which was not in conformity with the settled provisions in this respect and when the assessee came back, denied the opportunity of cross examine Shri Niranjan Shah, which in our opinion, has caused a gross violation of principles of natural justice. In view of above facts and circumstances of the case and to meet the ends of justice, we set aside the assessments for all these seven assessment years and restore the issue relating to .....

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. cash found and disclosed, commission income of ₹ 6.50 lacs disclosed for A.Y. 1989-90, income from M/s Patwa traders confirmed as per direction given in appeal orders, perquisites added and confirmed in First Appeals and later not contested and the additions on account of alleged advances to Shri Niranjan Shah out of undisclosed sources. The addition, on account of alleged advances to Shri Niranjan Shah, out of undisclosed sources is main issue at relevant point of time. Regarding the ma .....

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loppy was seized which contained account no. 36 in the name of 'J.K.' The letters 'J.K.' represent the initials of the first and the middle name of the appellant. With regard to the contents of the aforesaid account, the statement of the appellant was recorded on 10th July, 1992 under the provisions of the Foreign Exchange Regulation Act. In his aforesaid statement, the appellant admitted that the credit entries appearing in the aforesaid account represented the amounts paid in I .....

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ccounts were written in a code and for finding out the exact amount, the decimal sign was to be ignored. The appellant was asked to explain a number of entries in the aforesaid account by the FERA authorities. He had explained a number of enteries in great detail, including dates and places of physical transaction, and the person who were involved in carrying out the same. He had explained that his account no.36 was debited by sums of ₹ 1,20,000/- and ₹ 14,100/- against US Dollars 80 .....

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n the sum of ₹ 26,100/- had been reimbursed to him by Shri Nikhil R. Parikh. The appellant had further stated that his aforesaid account was debited by a sum of ₹ 5,85,000/- against US Dollars 25000 provided by Shri Niranjan J. Shah to one Shri Kartik in March, 1991. He clarified that the aforesaid sum of ₹ 5,85,000/- was reimbursed to him by Shri Kartik of USA through a person sent by Shri Kartik. He stated that his account was debited by a sum of ₹ 15,100/- against the .....

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ne Nanda, ₹ 45,000/- to one Shri Parikh, ₹ 10,000/- to a person (name not given) on 31-5-1991, ₹ 40,000/- to one Shri Churchill on 1-7-1991 and ₹ 5,00,000/- to one Shri Pradip Shah on 5-10-1991, under instructions from Shri Niranjan J. Shah on behalf of one Anil of USA. This was submitted with regard to the clarification given in respect of the aforesaid entries for foreign exchange transactions, para l(e) of the memorandum dated 5-10-1994 issued by Enforcement Directorat .....

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the Income-tax Act in the case of the appellant for A.Y.1986-87, stated therein that various debit and credit entries appearing in account no. 36 made by means of cheques/demand drafts were also appearing in the books of account of seized during the course of a search at the premises of the appellant in August, 1990. Examples of such entries are given on pages 14 and 15 of the aforesaid assessment order. 8.1.3 The appellant in his statement recorded under section 131 of the Income-tax Act on 7- .....

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at this account was of Shri J.K.Doshi, as per the index. He further stated that this account represented transactions between him and Shri J.K..Doshi of Ahmedabad in Indian rupees. He also stated that most of the figures mentioned in this account were in code and to read those; the decimal point was to be ignored. However, at certain places, figures were written in full also. He had given details of such figures in the aforesaid statement. He had further stated that such discrepancies occurred i .....

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r stated that the source of the sums advanced in cash to Shri J.K. Doshi and his concerns, was out of the unaccounted cash lying with him. The Assessing Officer who made the earlier order of assessment for A. Y. 1986-87 dated 25-3-1994, has given instance of some of the credit entries in cash, appearing in account no. 36, reflected in the books of account of the appellant seized during a search in the case of the appellant in August, 1990. Pages 14 and 15 of the relevant assessment order refer. .....

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other than by means of cheques, and credited in account no.36. While making the addition, the Assessing Officer has referred to the submission made by the appellant that the statement given by him before the FERA authorities was a relevant, significant and substantive piece of evidence, though not conclusive. 8.1.5 Against the aforesaid order, the appellant had filed an appeal before the CIT(A)-VI, Ahmedabad. The objections raised by the appellant against the additions made on the basis of the .....

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lant, there were many other entries which did not pertain to him and this could be established from the records. It was argued that the appellant had been held responsible by the Enforcement Directorate in respect of only three or four foreign exchange transactions reflected in this account, it was also argued that in the aforesaid account, the dates were not mentioned and, therefore, it could not be stated that these transactions pertained to a particular year. The counsel of the appellant had .....

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se dates were taken to be correct, there could be no credit balance on any of the dates and, therefore, no addition could be made to the total income of the appellant It was also argued that several transactions which were mentioned in this account as having been made in cash, were actually by means of cheques and, therefore, the, same could be very easily verified with regard to the exact date and the parties who were involved in these transactions. It was stated that the very first transaction .....

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ions by means of cheques, in this account, which did not pertain to the appellant and, therefore, such transactions had not been accounted for in the books of any concern of the appellant's group, it was contended that such transactions by means of cheques pertained to third parties and the appellant had nothing to do with these transactions. It was emphasised that on the basis of evidence and material which was available in the income-tax records of Shri Niranjan J.Shah with the Income-tax .....

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hat the onus was very heavy on the appellant to explain properly each and every entry appearing in this account He observed that at the same time, the objections raised by the appellant's counsel could not be ignored. The fact that various transactions in account no.36 had been assigned specific dates in the chart filed by Shri Niranjan J. Shah before the Income-tax authorities in Bombay, was a very important fact which could change the entire complexion of the said issue. He observed that i .....

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hat the debit entries related to such amounts which were spent away by the appellant and, therefore, the same were not available for advancing further amounts. My predecessor observed that for determining the peak credit, all the dates must be established beyond any doubt. Further, the claim that several transactions which were by means of cheques could be established as not pertaining to the appellant, but to various other parties, had to be considered on the basis of whatever evidence or mater .....

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to the relevant material and evidence, it would be impossible to work out the quantum of addition which could be made in the case of the appellant for various assessment years. With the aforesaid observations, my predecessor restored this issue back to the file of the Assessing Officer to be decided de novo. The appellant was asked to produce the relevant material and evidence, in support of the various claims made by him before the CIT(A), before the Assessing Officer and the Assessing Officer .....

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ion as a separate transaction. He observed that in the account maintained in the computer, when any amount of cash was brought in at a particular time, the same was entered first. The cash brought in or taken out subsequently was entered only thereafter. He, therefore, held that the cash withdrawn by a latter entry could not be considered as having been used for making deposits which appeared prior to the withdrawal. He observed that in the statement prepared by the appellant, the first three en .....

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ounted income He further observed that the appellant had claimed set off of withdrawals those debit entries, against the credit entries; which represented the withdrawals made by him for purchase of foreign exchange. The Assessing Officer, therefore, worked out the peak credit himself in account no.36 and the same has been appended to the assessment order. This peak credit has been worked out by the Assessing Officer, assessment year-wise, from A.Ys. 1986-87 to 1992-93, The basis of the aforesai .....

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s belief that the debit amount could not be available with the appellant for making a credit after a period of two months. Similarly, the benefit of debit entries representing withdrawal of sums which were used for the purchase of foreign exchange (as admitted by the appellant before the FERA authorities) was not given as the said amounts had been spent by the appellant On the basis of the above, the Assessing Officer made an addition of ₹ 1,63,45,500/- in Ass Year 1986-87 (and different a .....

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the CIT (Appeals) passing this order had after detailed discussion on facts and circumstances ; reached the following conclusions: (a) Transactions in the computer floppy containing account no.36, in the name of 'J.K.', was found during the course of an income-tax search at the premises of Shri Niranjan J.Shah on 30/5/1992, were with appellant only. (b) The contention of the appellant that Shri Niranjan J.Shah had admitted the credit entries in cash, appearing in account no.36, is not co .....

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available in the incometax records of Shri Niranjan J.Shah with his Assessing Officer at Bombay. However, the appellant has not given instance of a single entry in respect of transactions by means of cheques which did not pertain to him or his concerns. (d) He held that the entries in account no.36 were in chronological order, as is evident from the entries in respect of transactions by means of cheque where the dates were verifiable by reference to the bank authorities. He also agreed with the .....

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ctions were made on the same date i.e. 31-5- 1985. The dates given in the statement of receipts and payments of account no.36 prepared by Shri Niranjan J. Shah and submitted to his Assessing Officer at Bombay were also accepted as correct. (e) The cash brought in/taken out subsequently is entered thereafter. Thus, the cash withdrawn by a later entry cannot be considered to have been used for making deposits which appeared prior to the withdrawal. He agreed with the Assessing Officer has observed .....

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1986-87 to 1992-93 (Income Tax) and A.Y. 1985-86 to 1991-92 (Wealth Tax) and A.Y. 1989-90, 1990-91 and 1992-93 [against CIT(A) s order dismissing application u/s.154 of the Act] to the file of the A.O. for denovo assessment with observations as reproduced earlier in para 4.3 of this order. 3.6 Matter was carried before the First Appellate Authority, wherein various contentions were raised on behalf of assessee. Having considered the same, CIT(A) held as under: 8.3 I have gone through the facts o .....

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the statement of the appellant was recorded on 10th July, 1992 under the provisions of the Foreign Exchange Regulation Act. In his aforesaid statement the appellant admitted that the credit entries appearing in the aforesaid account represented the amounts paid in Indian rupees by him or by his concerns or by certain persons on his behalf to Shri Niranjan J.Shah or his concerns or certain persons acting on his (Shri N.J.Shah s) behalf. Similarly, the appellant admitted that the debit entries app .....

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xplained a number of entries in great detail, including dates and places of physical transaction, and the person who were involved in carrying out the same. These have been reproduced earlier in para. 8.1.1 of this order. This was submitted with regard to the clarification given in respect of the aforesaid entries for foreign exchange transactions, para l(e) of the memorandum dated 5- 10-1994 issued by Enforcement Directorate, New Delhi to the appellant, Shri Niranjan j. Shah and others refers. .....

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that case, even retraction before the Custom or FERA Authorities was not accepted as being automatic proof of coercion. The facts prove otherwise. e) With regard to the entries appearing in account no.36, relating to transactions affected through cheques/demand drafts, the appellant in his statement recorded by the Assessing Officer of Shri Niranjan J. Shah on 7-2-1994 had stated that these must have been accounted for in the respective books. The Assessing Officer, who made the earlier order of .....

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r who made the earlier order of assessment for A. Y. 1986-87dated 25-3-1994, has given instance of some of the credit entries in cash, appearing in account no. 36, reflected in the books of account of the appellant seized during a search in the case of the appellant in August, 1990 (refer pages 14 and 15 of the relevant assessment order). This has never been disputed by the appellant. g) Shri Niranjan J.Shah, in his statement under section 131 of the Income-tax Act recorded by his Assessing Offi .....

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nt. He had further stated that such discrepancies occurred in this account due to the fact that this account was never settled and checked between him and Shri J.K.Doshi. He stated that this account also reflected the transactions between concerns of his group and concerns of Shri Doshi's group. As regards entries of transactions through banking channel, these were reflected in the accounts of respective assessees of the two groups. He stated that the entries of cash transactions in the afor .....

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.K. Doshi and paid to him, however, I do not recollect the transactions. It is further confirmed from reply to Q-No.172 relied upon by the appellant as he is even referring to the source of cash transactions paid to the appellant when he says that - Source of cash transactions actually taken place are from cash in hand of my business concerns or unaccounted cash flow in my case. It is also possible that some cash might have been exchanged for safe keeping only." This clearly proves that Shr .....

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as given certain incoherent and contradictory statements in the cross examination has to be seen in the light of the facts that the two i.e. the appellant and Shri Niranian Shah are closely related and have been admittedly been engaged in clandestine transactions even in violation of FERA laws. Even this statement shows that he is going hot and cold at the same time. At one hand he says that he does not have any financial transaction with Shri Jayendra K. Doshi in cash and on the other hand he s .....

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Niranjan Shah to help the appellant, wherein there were no further tax implications to him cannot be taken to dilute the overwhelming evidences which show the genuineness of the transaction beyond doubt. k) The bringing into taxation of the transactions from the end of Shri Niranjan Shah in his case does not entitle the appellant for any relief. There are always two ends to a transaction between two parties, and each has to explain and cater to its end of transaction. For instance, a seller of p .....

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g dates and details, these were explained by the appellant himself to the FERA authorities, even the transactions in cash and foreign exchange in contravention of FERA law were accepted as belonging to him and were never retracted; some cash transactions recorded in this account were traced to accounts seized from assessee's possession in a separate search; Shri Niranjan Shah has accepted the genuineness of the transactions in his own case and the transactions by cheques / drafts are not eve .....

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itious entries with genuine transactions as is being tried to be made out by the appellant. I am of the considered opinion that it is not merely a case where transactions found recorded by/in the possession of third party are held against the assessee without any corroborating evidences. In this particular case there are irrefutable evidences that not only the two parties were connected but admittedly entered into out of book transaction which even infringed against stringent laws like FERA. The .....

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therefore, dismissed. 3.7 Learned Authorized Representative of assessee submitted before us that CIT(A) was not justified in confirming addition of ₹ 1,83,37,910/- on account of alleged advances to Shri Niranjan Shah out of undisclosed sources. In this regard, learned Authorized Representative pointed out that in case of Shri Niranjan Shah, this amount has been added in respective assessment years. So, addition is not desirable in assesee s case, which will amount to double addition. Lear .....

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he case emanating from the records, the evidence adduced by the Department in support of the charges alleged in the SCN, the submissions both written as well as oral, made by/or on behalf of the noticees. The computer printout of Floppy I seized by the Income Tax Department from Sh. Niranjan Shah contain the accounts of various persons. Page Nos. 53 to 59 of the said floppy contained an account titled "36". As per the index on page 1 of the printout, the a/c titled "36' is in .....

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ages interalia contained the following entries which appeared to be connected with the transactions in foreign exchange. Sl. No. Pg. No. of the The printout I Particulars of the entry Debit Credit 1 55 US $ 80.00 at London 1200.00 2 55 Pnd. 66.0 141.00 3 56 At HK 151.00 4 57 22.7.88 -Ref. 15.00 at HK 261.00 5 57 20.5.89 US $100.00 2050.00 6 58 5.6.90 -At Singapore 1075.00 7 58 5.9.90 To Ashokbhai A/c. H. Mehta 2100.00 8 58 29.12.90 To Nirubhai A/c. Anil USA - Date may not be correct 200.00 9 29. .....

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ements, Sh. J.K. Doshi inter alia stated that he was associated with many companies in Ahmedabad as Director including OJAS Leasing Ltd.; that he alongwith his wife, son, daughter, Sh. Niranjan Shah, Bindu and her mother visited Australia, Singapore, Bangkok etc. in June 1987; that Sh. Niranjan Shah is his wife's aunt's son and Sh. Niranjan Shah has purchased approx. ₹ 7 Lacs worth shares of Ojas leasing Ltd. in the year 1987. With regard to pages 1 & 53 to 59 of print out of f .....

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s behalf; that credit entries in the said document represented the amounts paid in Indian currency by him or through his concern to Sh. Niranjan Shah/his concern or to anybody on his behalf; that the figures written under the head 36 were expressed in Indian rupees and while reading the amounts decimals were to be omitted. Following entries incriminatory in nature from foreign exchange of view figured in the printout of the floppy 1 seized from the premises of Sh. Niranjan Shah: Explaining the v .....

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ore in May 1989; that his account was debited by ₹ 26,100 against US $ 1500 provided by Sh. Niranjan Shah in Hongkong to Nikil R. Parikh in July 1988; that he received the reimbursement of ₹ 26,100 from Nikhil R. Parikh; that his account was debited by ₹ 15,100 against equivalent foreign exchange provided by Sh. Niranjan Shah in Hong Kong to various persons from whom he (Doshi) had received reimbursement and that his account was debited by ₹ 1,07,500 against Singapore Dol .....

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it dated 6.10.92 that he received in London foreign exchange of US $ 8000 and Pounds 660. Sh. Nikhil Parikh vide statement dtd. 2.4.93 has admitted that he received US $ 1500 in Hongkong and that on return he made a payment of ₹ 26,100 to Sh. J.K. Doshi. Sh. Nirish Babulal Shah vide affidavit dated 6.10.92 and statement dtd. 27.10.93 had confirmed that Sh. J.K. Doshi had arranged Sing. $ 10,000 for him and he paid ₹ 1,07,500 to Sh. J.K. Doshi in instalments. Sh. Niranjan Shah in his .....

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.1.90, 24.1.90, 25.1.90, 19.4.90, 20.4.90 and 24.4.90 were available on pages 46, 43, 316, 315 and 313 of A 10. The original entries dated 9.6.90, 30.4.90, 13.6.90, 15.6.90, 2.7.90, 4.7.90, 5.5.90 were respectively available on pages 353, 310, 351, 350, 71, 70, 69 and 217 of A 10. Similarly, the transactions dated 28.1.91 for ₹ 1,15,000/- and ₹ 45,000/-pertaining to US D 2,000 as noted on page 258 of A-11. Also page 258 of All contains the original entry regarding transaction of US D .....

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p Shah A/c. Anil USA for 15150/- US D", regarding the transaction dtd. 5.10.91 on59/Fl. As already stated US D stands for US dollar. The accounts on pages 58 and 59 of Fl shall be read without the decimal. In his statement dtd. 6.10.93 he had stated that the debit entries dtd. 3.10,89 and 4.10.89 for R&. 5 Lacs each regarding DD for Boston were correlated with the debit entries in the current account of Romil Exports. In his statement dtd. 7.10.93 he had stated that RE herein stands for .....

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i has been debited for ₹ 5,85,000/- for US $ 25,000 made to Kartik Thakkar in USA @ ₹ 23.40 per dollar. On page 56/F-l, the account of Sh. J.K. Doshi has been debited for ₹ 1,20,000 against US $ 8000 in London. The account of Sh. J.K. Doshi has been debited on 20.5.89 byRs. 2,05,000 on page 57 ofF-1 against US $ 10,000/-. Page No. 57 of Fl showed that Account of Sh. J.K. Doshi has been debited by ₹ 26,100 against US $ 1500/- in Hongkong. The names of the notices i.e. S/ S .....

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f Sh. Niranjan Shah, who, vide his statement dated 10.7.92 under section 40 of FERA 1973 had explained with reference to print outs Fl that against the receipt of US $ 6110 by him in Australia during a conducted tour he paid ₹ 1,25,255 to Sh. Niranjan J. Shah hah in India at the rate of ₹ 25.50 per dollar; that he had similarly paid ₹ 52,500 to Sh. NiranJan Shah in India against receipt of US $ 2,100/- by him in May 1991 during a visit to Scandinavian countries; that he had tak .....

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ul R. Shah in his statements dtd. 23.6,92, 24.6.92 and 25.6.92 etc. had explained that Dr. Sharik, a friend of Kamlesh (co-brother of Vipul), had received Sh. Pnd. 3870 against ₹ 1,50,000 received by Sh. Niranjan Shah through him (Vipul Shah); that the account of the said transaction is figuring in account No.-2 on page 11 of Fl regarding Chandrakaut D. Charvada in London; that Sh. Niranjan Shah had provided Fr. 11,752/-through Sh. Nilesh Vadhani (Dubai) to Paresh Gheewala against payment .....

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harik who was to go to Ireland; that Vipul Shah told him that he could get the amount arranged through Sh. Niranjan Shah and that Dr. Sharik thereafter met Sh. Vipul Shah and made arrangements for Pounds 3.870/-. In his statement dtd. 29.6.92, Paresh C. Gheewala had admitted having paid ₹ 52,000 in India against payment of Fr. Fr. 11,7527-to one of his buyers in France. Shri Churchil R. Shah whose account No, 35 in US $ figuring on page 51 of Fl has admitted that he had received US $ 4500 .....

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had received US $ 1500 and Sterling Pnd. 3000 from Shri Niranjan Shah-through Shri Harshad Mehta during his foreign visit in 1990; that he returned unspent Stg. Pnd. 3000 to a person who was with Shri Niranjan Shah in Hong Kong and the same is figuring in account No. 2 of Mr. CDC (i.e. Mr. Chandrakant D. Charvada). Mrs. Bindu R. Shah, who is the sister of Shri Niranjan Shah, vide her statement dd. L6.6.92 had explained and admitted that she received US $ 8500 from Shri Niranjan Shah during the f .....

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of MH on page 77 Fl and page 158 of A11 had explained that Shri Niranjan Shah had sent 20,000 Canadian Dollars to Joseph of Canada for her in the account of Sh. M.H. Shah. The evidence discussed above prove beyond doubt that the various transactions figuring in the documents seized from Sh. Niranjan Shah are true. S/Sh. J.K. Doshi, Parag Kumar Pal Bhavnagari, Nikhil R. Parikh and Sh. Nirish Babulal Shah have admitted the charges alleged against them in the SCN. The evidence on record, as discuss .....

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e I.T. authorities in front of the panchas and the authorised representative of Shri Niranjan Shah, when printouts were taken in their presence, and copies of the same were given to them on 27.1.2000. After said inspection/action on 27.1.2000, Shri Shah has not contended that the printouts givers to him were not clear or that the printouts did not represent the contents of the floppies seized from him. The floppies and other documents seized from the residence of Shri Shah by the Income tax auth .....

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jan Shah has raised this contention in the past, either in his various retraction letters to the Department or in his applications filed before the Hon ble Spl. Court (Trial of offences relating to transactions in Securities) at Bombay or for that matter, even before I.Tax authorities or otherwise. Moreover, I find no reason why the officers of the Income Tax deptt. should resort to such an action and I fail to understand in what way they were to be benefited by such alleged action. The print ou .....

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undertaken by/pertain to him only. I may add here that these types of baseless allegations made against the Govt, officials, who are performing the duties assigned to them, are highly reprehensible. These allegations which are without any basis are made by the noticee with ulterior motives when he does not have anything to state in his defence to explain the transactions appearing in the aforesaid documents seized from him, which he know fully well that the contents of the said documents shall .....

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First of all, I fail to see any merit-in the argument that once a SCN for quasi judicial proceedings is issued, the .same evidence cannot be used for other infringements of law, not covered by such earlier SCN; for other relevant quasi judicial proceedings. Even otherwise, it is seen from the records of the case, that the aforesaid SCN referred to by Shri Niranjan Shah pertains to the seizure of foreign exchange to wit US $ 17204, Stg. Pnd. 557, Sing. $ 185, DM 220, Spanish P. 1,67,000, UAE Dhs .....

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g in the document and floppies seized from the residence of Shri Niranjan Shah are concerned, he has not been charged with any offence, at the time of recording his statement with reference to the transactions figuring therein, In the circumstances, I reject the contention of Shri Shah that his statements recorded during the period from 3.9.93 to 23.2.94 could not be used as evidence in these proceedings. Shri Shah has retracted the said statements on the ground that it was recorded by use of fo .....

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(AIR 1981 KER. 81). Apart from submitting copies of certain letters written by Shri Niranjan Shah's advocate to the Department and his petition before the Special Court (which was rejected). Shri Niranjan Shah has not placed any evidence before me to indicate that his statements were recorded in the manner alleged by him. On going through the statements, I have no hesitation in my mind to come to a conclusion that the statements of Shri Niranjan Shah were voluntarily recorded and can be use .....

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ged in the SCN are proved and I find them guilty of the said contraventions. S/Sh. j.k. Doshi, Parag Kumar Pal, Bhavnagari, Nikhil R. Parikh and Nirish Babulal Shah have submitted that they had entered into the transactions alleged in the SCN due to the circumstances beyond their contol. While imposing penalties on these noticees, I consider the fact that they had no deliberate intention to defy the law, but had undertaken the aforesaid transactions without any malafides, due to the exigency of .....

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. Nirish Babulal Shah - Penalty of ₹ 10,000/-(Rs. Ten thousand only) The penalty of ₹ 4,50,000/- (Rs. Four Lacs and fifty thousand only) Imposed on Sh. Niranjan Shah, ₹ 90,000/- (Rs, Ninety thousand only) imposed on Sh. J.K. Doshi, ₹ 8,500/- (Rs. Eight thousand five hundred only) imposed on Sh. Parag Kumar Pal B, ₹ 1,500/- (Rs. One thousand five hundred only) imposed on Sh. Nikhil R. Parikh and ₹ 10.000/-(Rs.Ten Thousand only) imposed on Sh. Nirish Babulal Sha .....

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