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TMI Blog2019 (11) TMI 534X X X X Extracts X X X X X X X X Extracts X X X X ..... he Respondent that it had received information from ADIT (Inv.), Unit 2(2), Mumbai vide letter No. ADIT(Inv.)/Unit-2(2)/Benami Property/2017-18 dated 27.10.2017 that M/s. Divine Spirit Infra Projects Private Limited (hereinafter referred to as "M/s. DSIPL") in Financial Year 2015-16, has made investments in real estate projects of four entities namely:- i. M/s. Star Landcraft Pvt. Ltd., ii. M/s. Crest Promoters Pvt. Ltd., iii. M/s. Ace Infracity Developers Pvt. Ltd. and iv. M/s. Starcity BuildconPvt. Ltd., and payment of Rs. 43,79,29,306/- has been made by M/s. DSIPL till 28.07.2017 in respect of these investments. On enquiry, it was established thatall the four entities are having commonshareholders/directors/management and they are part of ACE group of companies. B. It is alleged that M/s. DSIPL have invested in the real estate projects/properties situated at Noida/Greater Noida region, the details of which are mentioned below: Sl. No. Description of the properties Beneficiary Value of illicit investment 1. Flat no. 5052, 5053, 5054, 5061, 5062, 5063, 5064, 5071, 5072 and 5073 (total saleable area of 16750 sq. feet) in Tower-5 of "Ace Golfshire" residentia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n of income and large credits in bank account immediately followed by debits of equivalent amount. The source of investment by these creditor companies is through high security premium or unsecured loans or trade payable. In order to determine the credit worthiness of the creditor companies‟ financial statements including bank statements of these companies were enquired into. Perusal of the bank statements revealed that the source of credits in their bank accounts was from a complex web of entities all of which are in the nature of shell entities with no business activity. Detail of major part of money received by M/s. DSIPL from such few companies during F.Y. 2015-16 which has been used to make investments in the projects of the above mentioned four companies of the ACE group of companies is as under: Name of the Company Amount advanced to M/s. DSIPL (in Rs.) TACTFULL INVESTMENTS LIMITED 154650000 VIKRUTI VINIMAY PRIVATE LIMITED 97900000 CENTRON INFRA PROJECTS PRIVATE LIMITED 64430000 SANSKAR SHARE TRADERS PRIVATE LIMITED 45770000 SURYA MEDI TECH LIMITED 21400000 VIEWLINE DISTRIBUTORS PRIVATE LIMITED 16200000 SALONA BARTER PRIVATE LIMITED 15300000 APPEAL ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... conduit to route back unexplained funds of Ace group of companies into M/s. DSIPL which in turn invested these funds into projects of four companies of the Ace group. 4. Based on the above facts, the Respondent has come to a conclusion that M/s. DSIPL is a "Benamidar" and the appellants as "Beneficiaries". CASE OF THE APPELLANT:- 5. On the other hand, the Appellants have attacked the order passed by the Initiating Officer on several grounds including the ground that the Initiating Officer has no territorial jurisdiction to investigate the matter. It is the case of the Appellants that the Respondent i.e. Initiating Officer, Deputy Commissioner of Income Tax, (BPU-1), Mumbai, had illegally assumed jurisdiction in the matter. In this regard the Appellants have relied on the Standard Operating Procedure, issued by the Central Board of Direct Taxes (CBDT). The Standard Operating Procedure (SOP) has been issued vide F. No. 414/63/2016-IT (Inv.-I) dated 10.08.2017. The Appellants have also relied on the notification dated 18th May, 2017 issued by Ministry of Finance, Department of Revenue, CBDT, wherein the territorial areas have been defined. 6. It is the contention of the Appel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tigate/refer the matter to the Adjudicating Authority then there is no need of examining other issues. Therefore, we have taken up the issue of jurisdiction of the Initiating Officer to initiate the investigation as well as referring the matter to the Adjudicating Authority. 11. The Central Board of Direct Taxes (CBDT) issued notification in S.O. 1621(E) dated 18.05.2017in exercise of Powers conferred under sub-section (2) of Section 28 read with Section 59 of Prohibition of Benami Property Transactions Act, 1988, wherein the territorial jurisdiction of Joint Commissionerof Income-Tax/Additional Commissioner of Income-Tax (Benami Prohibition), Unit-1, Mumbai has been defined. According to the said notification, these authorities are having territorial jurisdiction in the areas within the limits of the Municipal Corporation of Greater Mumbai and Navi Mumbai. Whereas, Ghaziabad, Uttar Pradesh is coming within the jurisdiction of the Joint Commissioner of Income-Tax/Additional Commissioner of Income- Tax (Benami Prohibition), Kanpur. 12. The properties in question are undisputedly situated in Ghaziabad. The Inspecting Officer received information from ADIT (Inv.), Unit-2(2), Mumba ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion of the IO, Approving Authority and Administrator: Section 3(1) of Prohibition of Benami Property Transactions Act, 1988 states that no person shall enter into any benami transaction. The scheme of the Act revolves around consequences of violation of this section. It is, therefore, appropriate that the jurisdiction is assumed by a BPU when any of the 3 limbs viz. benami transaction/property, benamidar or beneficial owner falls under its assigned territorial jurisdiction. In cases where the benami property/transaction, beneficial owner and/or benamidar are located in territorial jurisdictions of different BPUs, the BPU from which the first show cause notice u/s 24 of Prohibition of Benami Property Transactions Act has been issued shall assume jurisdiction over the case and shall intimate the other BPUs concerned regarding assumption of jurisdiction in that particular case involving benami property/transaction, benamidar and beneficial owner. Each benami transaction/property may be considered as a separate case. The BPU assuming jurisdiction in such a case shall ensure that the fact of assuming jurisdiction by it is brought to the notice of other BPUs concerned with a view to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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