TMI Blog2023 (9) TMI 427X X X X Extracts X X X X X X X X Extracts X X X X ..... e under section 69C of the Act. Ground of the appeal is allowed. - Shri Prashant Maharishi, AM And Shri Sandeep Singh Karhail, JM For the Assessee : None For the Revenue : Shri S Srinivasu, CIT DR ORDER PER PRASHANT MAHARISHI, AM: 01. These are the two appeals filed by same assessee Mr. Naresh Manakchand Jain, who admittedly in his several statements at several times, is an accommodation entry provider of several hundred crores to almost 32000+ beneficiaries as under :- i. in ITA Nos. 1945/Mum/2023 1946/Mum/2023 filed by the assessee for A.Y. 2012-13 against the appellate order passed by the Commissioner of Income-tax (Appeals)-48, Mumbai [the learned CIT (A)] dated 27th March, 2023, wherein the appeal filed against the assessment order passed by the Asst. Commissioner of Income Tax, Central Circle, 2(1), Mumbai (the learned Assessing Officer) relevant to A.Y. 2012-13, wherein two orders were passed i.e. order under Section 144 read with section 153A of the Act dated 12th September, 2019 and second order under Section 143(3) read with section 153A of the Act dated 26th April, 2021, was dismissed. ii. In ITA No. 1945/Mum/2023, the learned Assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... prices are rigged, several exit providers who engaged in price rigging and buying shares in fraudulent manners to help several beneficiaries who converted their unaccounted income in to alleged long term capital gain in shares exempt u/s 10 (38) of the Act. 05. Facts stated in Assessment order, which also reproduces his statements, his accomplices statements and several clinching evidences to show the mammoth money laundering activities initiated and concluded by help of several persons for the benefit of more than 30000 beneficiaries. It also displays how blatantly fa ade is created to evade taxes. 06. For A.Y. 2012-13, assessee filed its original return of income on 24th July, 2012, declaring total income of ₹2,54,830/- [sources of income unknown]. Subsequently, search under Section 132 of the Income-tax Act, 1961 (the Act), was conducted by investigation wing on 20th October, 2016, in connection with one Ranka Jewellers. Assessee was also covered in that search. The case of the assessee was centralized at Pune. This centralization was challenged by the assessee before the Hon'ble Bombay High Court, wherein Hon High court vide order dated 15th July, 2019, quashed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Infotech Limited is the company wherein Mr. Abhinandan Jain and Mr. Amaresh Punia are the directors, was also used with their help in providing bogus long term capital gain. He also named 17 exit providers in search by Mumbai Investigation Wing. He further named 7 entities which are used for providing money-laundering services. The name of the beneficiaries in Nyssa Corporation Limited was also given, Mr. Pritesh Kumar Hasmukhbhai Shah, Hasmukhbhai Manilal Shah, and Asha Sanjay Shah. In case of Diamant Infrastructure Limited, he gave the name of Jigar Praful Ghoghari, Kiran Bhiku Bhanaes, Jinal Apurva Rawal for manipulation of Polytex India Limited, KGN Limited. Based on this information and in absence of any submission from the side of the assessee, the learned Assessing Officer determined the commission income at the rate of 3% on ₹1680 crores amounting to ₹50,39,64,081/- as undisclosed income of the assessee. 09. Further, the learned Assessing Officer noted that as per AIR information assessee has incurred credit card expenses of ₹2,60,369/- which was also added. Accordingly, the assessment order under Section 144 read with section 153A of the Act, was passe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ficer as income of the assessee subject to any duplication. With respect to the credit card expenditure of ₹ 260,369/ the learned CIT (A) noted that the assessee has not submitted any explanation or related document and therefore, he confirmed the addition of the same. 012. Despite notice, none appeared before us on behalf of assessee and therefore, these appeals are decided on the facts available on record. 013. The learned Departmental Representative vehemently supported the orders of the learned lower authorities. 014. We have carefully considered and perused the orders of the lower authorities. As per admission made by the assessee, he is engaged in the business of the providing bogus accommodation entries to various persons to convert their unaccounted income as tax-free, long-term capital gain, Business losses, and short-term capital gain by operating several companies through cartel of several persons. The assessee has given names of (i) all the persons to whom the accommodation entries were provided, (ii) the persons who are working along with the assessee in the above money-laundering operation, (iii) names of directors of companies involved in this massive ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that unaccounted income in long-term exempt capital gain, short term capital gain or business losses, [the learned assessing officer has mentioned that there are 32,855 persons who have been identified in several scripts of those listed entities] we are duty-bound to direct the learned assessing officer to pass on this information to various other authorities and regulators. Here we find that assessee is merely an accommodation entry provider as held by the lower authorities. Therefore, the real beneficiaries are the persons who have obtained the exempt long-term capital gain by converting their unaccounted income. It is also categorically held by the lower authorities that assessee has arranged synchronized trade of buy and sale of shares of those companies. Assessee in his statement also mentioned names of some of the directors of those companies who are also engaged and involved in this operation. In view of this, we direct the learned assessing officer to complete below directions within 90 days of the date of receipt of this order :- i. Share information of all those persons who are involved in the above racket of money laundering with the concerned Assessing officer to ta ..... X X X X Extracts X X X X X X X X Extracts X X X X
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