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TMI Blog2025 (4) TMI 125X X X X Extracts X X X X X X X X Extracts X X X X ..... Himanshu Satija, Mr. Kamal Deep Dayal, Ms. Archana Acharya, Advocates. At Sl.Nos.14 to 19. Mr. Sunil Kumar, Advocate. At Sl.Nos.20 to 30 For the Respondent : Mr. Kanhaiya, Singhal, Advocate ORDER The batch of appeals have been filed involving common legal issues and otherwise facts of different appeals are inter- mixed though the impugned orders dated 30.10.2018 and 31.10.2018 are on separate references sent by the Initiating Officer. The parties prayed for a common order in all the appeals. It is not only for the reason that facts are intermixed in the appeals but it involves common question of law. According to the respondent, even the modus operandi applied for benami transaction by the appellant is also common. The transaction in pursuance to which allegations have been made against the appellants for benami transaction is of the period of demonetization of the currency note of Rs. 500/- and Rs. 1000/- by the Government of India. The common allegation against the appellants is for their involvement to get demonetized money deposited in the bank accounts of people having no means for the total value of more than Rs. 35 crores and accordingly the prayer of the counsel for t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llion Pvt. Ltd, M/s Gayatri Jewellers, M/s Shreeji enterprises, M/s Patidar Bullion Pvt. Ltd., M/s M.S. Jewellers, Kundan Trading Company, M/s Shital Jewellers and M/s Shivam Jewellers Sanjay Soni, Shrenik Shah and Paresh M. Joshi M/s Parker Bullion Pvt. Ltd, M/s Gayatri Jewellers, M/s Shreeji enterprises, M/s Patidar Bullion Pvt. Ltd., M/s M.S. Jewellers, Kundan Trading Company, M/s Shital Jewellers and M/s Shivam Jewellers Benamidars Yogesh Baburao More of M/s Raj Enterprises, Prakashkumar Govindbhai Kashyap, Jitendrabhai Rameshbhai Patel, Jolly trading company, Shri Kalubhai Dashrathbhai Kureshi (Proprietor of M/s Aryan Corporation), Shri Dipak Shantaram Pavar (Proprietor of M/s Sukun Enterprises), Shri Dashrathbhai Dalichand Nagar (Proprietor of M/s Lascon Enterprises), Shri Mohammed Farhan Mohammad Ishmail Sheikh (Proprietor of M/s Metro Enterprises), Shri Saiyed Kashif Hadar Shabbir Hussain (Proprietor of M/s Krystal Enterprises) and Shri Mohammed Faruk Nasiruddin Kazi, Proprietor of M/s A.S Trading Co. Yogesh Baburao More of M/s Raj Enterprises, Prakashkumar Govindbhai Kashyap, Jitendrabhai Rameshbhai Patel, Jolly trading company, Shri Kalubhai Dashrathbhai Kureshi (Pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onetization notes it had come to the notice of the investigation wing of Income tax department that black money is being channelized through the banks by way of utilizing the bank accounts of the persons of no means. Various firms showed their interest to purchase gold so as to route demonetized currency. The cash amount was given to the entry operators who put cash in the bank account of unknown persons having no means to deposit huge amount in their bank account. The demonetized money was channelized through the banking channel to show it for purchase of the gold/bullion. It was found by the respondents that appellant firms/company dealing in Bullion namely M/s Parker Bullion Pvt. Ltd, M/s Gayatri Jewellers, M/s Shreeji enterprises, M/s Patidar Bullion Pvt. Ltd., M/s M.S. Jewellers, Kundan Trading Company, M/s Shital Jewellers and M/s Shivam Jewellers injected cash in the bank account of unknown persons through abettors Sanjay Soni, Shrenik Shah and Paresh M. Joshi named above who in through entry operators by put cash in the bank account of unknown persons. The amount was then transferred to the bank account of those newly introduced firms/persons i.e., M/s Raj Enterprises, Prak ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he bank account of those who were having no means. It was through the entry operators; Afzal Savjani, Tejas Desai, Zahir Abbas Kasamali and Aftab Kazi We are taking the case of M/s Parker Bullion Pvt. Ltd. to analyse the factual and legal issue. The counsel for the appellant submitted that M/s Parker Bullion Private Limited was having long standing business in the trade of Bullions. The annual turnover in the financial year 2016-17 was about Rs. 3009 crores involving trading of Bullion to the extent of 3750 kg Gold, 3686 Kg Gold plus 64089 Grams of gold jewellery and 25809 Kg silver to their credit. The said bullion company was purchasing gold bullion from Axis Bank, Bank of Nova Scotia, Diamond India Limited, MMTC PAMP and various other firms and received delivery of gold bullions for which tax invoices and delivery charges were generated. In the relevant period of year 2016, one Sanjay Soni alias Soni Sanjaykumar Manubhai, proprietor of Gold House Jewellers Private Limited dealing with the appellant company since 2009 informed that he has a sister concern in the name of M/s Raj Enterprises and accordingly requested the appellant company to open the account of M/s Raj Enterpri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Raj Enterprises by banking channel and thereupon M/s Raj Enterprises transferred the money to M/s Parker Bullion Pvt. Ltd. showing towards purchase of gold. The allegation has been made that appellant company was not having stock of gold so as to make good of the deal on the receipt of the amount from M/s Raj Enterprises. They said to have made back date entries to disclose the stock of gold and even created documents to support their alleged transaction. The respondents analysed the issue on the basis of the statements of many persons recorded under section 132 of Income Tax Act and Section 19(1)(b) of the Act of 1988. It was even with reference to the FSL report to prove that the companies dealing in the bullion were not having sufficient stock of gold and therefore back dated entries were made. The appellant company held to be beneficial owner who transferred the demonetized money to the benamidar M/s Raj Enterprises through the abettor Sanjay Soni and thereupon it was channelized through the benamidar for alleged purchase of gold. The transaction was not for actual purchase of gold by benamidar M/s Raj Enterprises but to circulate demonetize currency to convert into legal tend ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llant M/s Parker Bullion Pvt. Ltd. for channelizing the demonetized money. It was for alleged purchase of gold by M/s Raj Enterprises but actual sale of gold did not take place. It is alleged that no evidence could be produced to link the appellant M/s Parker Bullion Pvt. Ltd. to show its involvement in the benami transaction. The respondent ignored that not only the amount received by the appellant company M/s Parker Bullion Pvt. Ltd. was reflected in the bank account but their books of accounts and inventories of the stock was showing sufficient gold for its transfer to the firms purchased the gold which include M/s Raj Enterprises on payment through RTGS. An allegation has been made that delivery of the gold was given to Sanjay Soni on behalf of M/s Raj Enterprises without an authority letter. It was in ignorance of the fact that Sanjay Soni was known to the appellant firm since long and otherwise business goes on trust. In fact, Raj Enterprises was belonging to Sanjay Soni being his own sister concern. The respondent however went a step further to hold that as per the statement of Sanjay Soni, the gold received from the appellant company M/s Parker Bullion Pvt. Ltd. was given ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rprises), Shri Mohammed Farhan Mohammad Ishmail Sheikh (Proprietor of M/s Metro Enterprises), Shri Saiyed Kashif Hadar Shabbir Hussain (Proprietor of M/s Krystal Enterprises) and Shri Mohammed Faruk Nasiruddin Kazi, Proprietor of M/s A.S Trading Co. to be benamidars. The Adjudicating Authority issued notices on the receipt of the reference. The reply to the notice was filed and after hearing the parties, matter was kept for pronouncement of the order. The Initiating Officer submitted an application under Section 26(5) and 26(6) of the Act of 1988 to add the abettor to be beneficial owner and beneficial owner to be abettors. The Adjudicating Authority accordingly passed the confirmation of attachment order treating the abettors to be beneficial owner and vice-versa. It is submitted that addition of the appellant companies from abettor to the beneficial owner was beyond the jurisdiction of the Adjudicating Authority. It was having no jurisdiction to transpose any of the appellant from one category to another, rather as per section 26 of the Act of 1988, the Adjudicating Authority was required to record its finding whether the property involved is a benami property or it is not a be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lhi High Court 10928 was also given where the Delhi High Court laid down the scope of section 26(3) of the Act of 1988. It was held that the Adjudicating Authority has only two options either to hold attached property to be benami properties and thereby confirm the provisional attachment or if it is not, then to deny the confirmation. It has no other authority and accordingly issuance of subsequent notice dated 07.09.2018 was illegal. The counsel for the appellant further referred to the scope of section 26 of the Act of 1988. It is submitted that the Adjudicating Authority may add any person whose presence is necessary to enable it to adjudicate and settle the questions involved in the reference. It can even strike out the parties but has no power to transpose parties from the status of abettor to the beneficial owner or beneficial owner to be the abettor. The learned counsel for the appellants submitted that if the bullion companies were to be taken as beneficial owners, they were required to be served notice under section 24 (1) of the Act of 1988 at the initial stage. The Initiating Officer was then required to pass an order under section 24(4) of the Act of 1988 after giving ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... enterprises (sole proprietorship firm of one Yogesh baburao more) and requested M/s Shreeji Enterprises to enter into transaction with M/s Raj enterprises. On 25.11.2016, Mr. Sanjay Soni placed an order of 5 kgs of gold with the appellant bullion firm and on 28.11.2016, he again placed an order of 15 kgs of gold. The amount towards alleged sale of gold was transferred in the account of M/s Shreeji enterprises though actual sale of gold did not take place. The facts and allegations are similar to the case of M/s Parker Bullion Pvt. Ltd. In the other appeal Mr. Sanjay Soni, proprietor of Gold House Jewellers Pvt. Ltd. introduced his sister concern in the name of Shiv Traders (a sole proprietorship firm of one Prakashkumar Govindbhai Kashyap) to M/s Shreeji enterprises with a request to enter into business transaction with M/s Shiv Traders. The appellant firm entered into business transaction with M/s Shiv Traders and the modus operandi of the appellant M/s Shreeji Enterprises is identical to the one undertaken by M/s Parker Bullion Pvt. Ltd. M/s Gayatri Jewellers M/s Gayatri Jewellers has filed two appeals one involving M/s Raj enterprises and the facts are similar to the case of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... td. and thus, are not being repeated for the sake of brevity. Kundan Trading Company The appellant Kundan Trading Company is a proprietorship concern of Amit Ashokbhai Patel and is engaged in the business of sale of gold and silver bullion since 01.12.2009. on 29.11.2016, the appellant received a telephonic message from one Suresh Soni who is a known person to the appellant and engaged in jewellery business for purchase of 10 kgs of gold for one Jolly Trading Company who made an RTGS into the account of appellant for Rs. 2,92,11,000/-. After receipt of the RTGS, the appellant placed an order for purchase of standard gold bullion for 12 kgs to Shreeji trading company and another 10 kgs gold from Kay Ess enterprises. Thus, an order of total 22 kgs gold was placed, out of which 10 kgs was sold to Jolly trading company. The appellant firm placed the invoices raised against jolly trading company and also paid income tax against the said transactions. M/s Shital Jewellers M/s Shital jewellers is a sole proprietorship firm of Shital Soni engaged in the business of gold bullion. The appeals filed by Shital Soni involve different amounts of benami transaction however, the modus operandi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the arguments raised by the respondent while recording our finding to each factual and legal issues raised by the appellants. It is to avoid repetition of the same facts and otherwise the arguments of the respondent would be referred vis-à-vis the issues raised by the appellants to make the order crisp and appropriate. Finding of the Tribunal We have considered the rival submission raised by the parties and scanned the matter carefully. The facts pertaining to each case has been narrated. The allegation against the appellants is for common modus operandi to circulate demonetize money to convert it to legal tender. Initially, notice was issued under Section 24(1) of the Act of 1988 to the benamidars and copy marked it to the bullion firms as beneficial owner. Statements were recorded and replies were filed by the noticees. On the basis of it, the Initiating Officer passed provisional attachment orders under Section 24(4)(b)(i) of the Act of 1988 and send the references treating Sanjay Soni, Shrenik Shah and Paresh M. Joshi as the beneficial owners, the bullion firms as abettors thereby changing their status and the benamidars remain the same as given in the initial notice ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , namely:- (a) the person specified as a benamidar therein; (b) any person referred to as the beneficial owner therein or identified as such; (c) any interested party, including a banking company; (d) any person who has made a claim in respect of the property: Provided that the Adjudicating Authority shall issue notice within a period of thirty days from the date on which a reference has been received: Provided further that the notice shall provide a period of not less than thirty days to the person to whom the notice is issued to furnish the information sought. (2) Where the property is held jointly by more than one person, the Adjudicating Authority shall make all endeavours to serve notice to all persons holding the property: Provided that where the notice is served on anyone of the persons, the service of notice shall not be invalid on the ground that the said notice was not served to all the persons holding the property. (3) The Adjudicating Authority shall, after- (a) considering the reply, if any, to the notice issued under sub-section (1); (b) making or causing to be made such inquiries and calling for such reports or evidence as it deems fit; and (c) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urt in India; or (iv) any person who has passed any accountancy examination recognised in this behalf by the Board; or (v) any person who has acquired such educational qualifications as the Board may prescribe for this purpose." Sub-section 5 of section 26 provides that in the course of the proceeding before Adjudicating Authority, if it finds reasons to believe that property, other than the property referred to it by the Initiating Officer is benami property, it shall provisionally attach the property and property shall be deemed to be a property referred to it on the date of receipt of the reference under section 24(5). Sub section 6 of section 26 gives jurisdiction to the Adjudicating Authority to strike out the name of any party improperly joined or add the name of any person whose presence before the Adjudicating Authority may be necessary to enable him to adjudicate upon and settle all the issues involved in the reference. The initiation of proceeding can be at any stage. It can be on an application of any party or can be suo-moto by the Adjudicating Authority. According to learned counsel for the appellants, sub section 6 of section 26 allows to strike out the name of a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... necessary for proper adjudication with their addition as abettors and beneficial owners. No prejudice was caused to the appellant in doing so because initially copy of the notice under Section 24(1) of the Act of 1988 was given to bullion companies. They were given opportunity to file reply and contest to add them with change in status. The reference of the judgement in the case of Distributors (Baroda) Pvt. Ltd. vs. Union of India & Ors. reported in 1985 AIR 1585, 1985 SCR Supl. (1) 778 is given where the Court has allowed to correct the mistake. Relevant paragraph of the judgment (supra) is quoted hereunder: "The view taken in that case in regard to the construction of Section 80M must be held to be erroneous and it must be corrected. To perpetuate an error is no heroism. To rectify it is the compulsion of judicial conscience. In this we derive comfort and strength from the wise and inspiring words of Justice Bronson in Pierce v. Delameter A.M.Y. at page 18: "a Judge ought to be wise enough to know that he is fallible therefore everyday to learn: great and honest enough to discard all mere pride of opinion and follow truth wherever it may lead: and courageous enough to acknow ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tiating Officer. The argument by the appellant has been made in ignorance to the relevant provisions but considering only sub section 3 of section 26. The reference of the judgement of the Delhi High Court in the case of Smt. Sunita Gupta (supra) has been given where the interpretation of section 26(3) has been given. The judgement aforesaid is to apply when a matter is required to be decided restricting it within the four corners of section 26(3). It cannot be that other provision like sub section 4 to 6 of Section 26 have been nullified by Delhi High Court, rather interpretation to Section 26(3) has been given as was raised by the parties. Thus, even the third argument raised by the appellant has no merit and is rejected. The learned counsel for the appellant further submitted that while subsequent show cause notice was caused to the appellant, they were not provided relied upon document and more specifically, the FSL report of digital devices. The argument was seriously contested by the counsel for the respondent. The application filed by the Initiating Officer under section 26(5) and 26(6) of the Act of 1988 was served upon the appellants which contained all the relied upon d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se to the question, Shri Jagdishbhai Acharya has stated that he did not know the above persons and whatever statement Afzal and Tejas Desai have given is wrong. However, he stated that there is credit of Rs. 1.21 crores from M/s Raj Enterprise. He has expressed his ignorance regarding the rest of the amount. Further in response to question no. 48 of his statement dated 26/1/2017, Shri Jagdish Acharya has stated that there has been physical delivery of gold to M/s Raj Enterprise. The employee named Shri Yogeshbhai who used to take delivery of gold for Shri Sanjay Manubhai Soni had also taken the delivery of gold of M/s Raj Enterprises from their office in National plaza. He also mentioned about one of the invoice of M/s Raj Enterprises that there has been signature of Shri Sanjay Manubhai Soni as well. (iv) During proceedings before the Initiating Officer under the PBPT ACT 1988. M/s Parker Bullion Pvt. Ltd filed reply on 11.07.2017 and attached with the reply the Delivery Challan for gold to M/s Raj Enterprise. It was also stated by M/s Parker Bullion Pvt. Ltd that all the transactions carried out by them with M/s Raj Enterprise were carried out through RTGS in Bank and no cash t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llan where his or not. He categorically stated that except the signature on KYC documents (PAN, Light bill) all other signatures on delivery challans were not done by him. Shri Yogesh Baburao More also filed an affidavit on 21.08.2017 wherein he confirmed that the signature on Delivery challan produced before him of M/s Parker Bullion Pvt. Ltd. were not his signature. Thus, the account holder himself from whose a/c no. 916020056388231 Rs. 11,61,95,535/- were transferred to M/s Parker Bullion Pvt Ltd, has denied the receipt of gold jewellery/bullion and has not signed the proof of receipt on delivery challans. (vii) In reply dated 14.08.2017, M/s Parker Bullion Pvt. Ltd also submitted the CD of the Audio recordings (of calls) with Shri Sanjay M Soni to justify his point. In the CD various calls between various persons of M/s Parker Bullion Pvt. Ltd and Shri Sanjay Manubhai Soni has been provided in which various interactions for booking the gold (which was booked by Sh. Sanjay Soni) and enquiries of gold rate has been done. Further the details of transactions of RTGS payment and Bank account confirmations have also been forwarded to M/s Parker Bullion Pvt Ltd by Shri Sanjay M Soni ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stigation wing post passage of order by ACIT (BPU): However, post search and post passage of order u/s 24(4) of the PBPT ACT in the case, the result of enquiries conducted by the Investigation Wing from the Central Forensic Laboratories and through own investigation, the following facts have emerged. The same is discussed below pointwise: A. Search and Seizure operations had been under taken at various premises of M/s Parker Bullion Pvt. Ltd and its sister concerns. The Statement u/s 132 of the Income Tax Act had been recorded of the key persons namely directors, SVs Jagdish Kumar Acharya, Haresh Kumar Acharya, Mukesh Acharya, Natwarbhai Acharya and employee Bharatbhai K Shah. B. The directors gave conflicting replies to the question of the delivery of bullion of the transaction under consideration. C. Further Shri Haresh Kumar Acharya in his reply to the question no. 26 in the statement recorded under oath u/s 132 of Income tax Act, has explained the process of sale of gold/bullion as under: Q.26 Please explain the process of sales in detail. Please explain whether any angadia/courier service is involved in making sales. Please provide name, addresses and phone numbers of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s also taken and on delivery, the name, seal and signature of the person taking delivery is obtained on one copy of the bill. D. The regular system followed by the M/s Parker Bulion in its business: From the statements recorded in the cases of the directors of M/s Parker Bullion Pvt. Ltd. viz. Jagdish R. Acharya, Mukesh J. Acharya, Hareshkumar J. Acharya and Natwarbhai J. Acharya as well as the employees at the business premises, the regular system followed by the assessee for induction of a new client and the process of carrying out subsequent business transactions can be summarized as under: (i) Inquiry is received from a new party for purchase of gold/bullion. (ii) KYC documents of the party such as bank details, Sales Tax Number, PAN Number, Shop establishment details, TIN Number, cancelled cheque etc. are obtained invariably. (iii) After negotiation, the details are entered in 'Sauda Book‟ in computer by Shri Natvarbhai Panchai (employee of M/s Parker Bullion Pvt. Ltd). (iv) Payment is received from the party. (v) After making payment, client informs Bharatbhai Shah (employee of M/s Parker Bullion Pvt. Ltd) about the payment. Bharatbhai looks after the pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... who got the delivery of bullion has signed it and the signature is that of Sanjay Soni. Therefore, Sanjay Soni was categorically asked to explain as to why the bullion was delivered to him though the invoice was made in name of M/s Raj Enterprise. In reply, Sanjay Soni has replied that delivery or gold bullion was taken by him and that he had signed on the invoice. The 130 gold bars of 100 gms weighing 13 kgs was given to Mohmad alias (C A Mohmad Re Nikunj) the very next day. F. As per the statement recorded of Sanjay Manubhai Soni, it can seen that he has booked bullion with M/s Parker Bullion Pvt Ltd, though the remittances were made from benami account of M/s Raj Enterprise. Further, Sanjay Soni has also admitted taking delivery of bullion in lieu of remittances made by M/s Raj Enterprise to M/s Parker Bullion Pvt. Ltd and has handed over the same to Mohammad. But Sanjay Soni has neither been able to produce Mohammad or provide any details regarding him during the course of search action or post-search investigation or even during the proceedings of the PBPT Act inspite of various opportunities provided to him. Shri Mohammad has during the proceedings under the PBPT Act, in c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... GS has been received, is also Yogeshkumar Baburao More and Yogesh Baburao More has categorically denied having carried out any business transactions with M/s Parker Bullion Pvt. Ltd. in his statement recorded u/s.131 of the IT Act. Further, Yogesh Baburao More has categorically stated that his account was used for cheque discounting and providing accommodation entries. It is observed that delivery of bullion was handed over to a person who himself hasstated that his account was utilized by entry operators and has denied carrying out any business transactions. * Shri Yogesh More in his statement recorded u/s 19(1) of the PBPT Act on 09.08.2017 has also denied of having signed any delivery challans for the delivery of gold. Hence the delivery challans submitted before the DCIT(BPU) by M/s Parker Bullion Pvt Ltd have been proved to be false. * Though M/s Raj Enterprises had been newly introduced to the company, M/s Parker Bullion Pvt Ltd by Shri Sanjay Soni, yet, the total KYC documents like PAN, TAN, sales tax Number, TIN number, Cancelled Cheque etc needed for the business were not in the possession of the company. * M/s Parker Bullion Pvt Ltd could not give any documentary ev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sh to deposit in bank on respective days) have been found to have been made on later dates. Actually, at the front end of the software i.e the user interface which is seen by a user, the dates of these entries in cash book match those of the bank book. However, when the actual dates on which entries were made was examined from the back end i.e. from the database, it was revealed that these cashbook entries were actually made in much later months but were backdated by the assessee. L. However, it was found from database that in some entries a previous invoice date was entered even though the actual time stamping is of a later date. These therefore appear at trailing record numbers / position in database. M. It can be noticed that there is a mismatch in both the sequences. For Example, looking at the entries in CASH File, it appears that first few entries, from 30/04/16 to 15/11/16, seems to be entered in timely order and this could be the regular course of business entries. Now, after this record, the next entry carries the date of 29/10/16. This continues till the very last record which is dated 7/11/16.These entries are highlighted. N. The total backdated cash receipts amoun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed in the relevant post search investigation folder along with forensics report. S. For genuine sales to have occurred, it is necessary that the bullion which is alleged to have been sold must have been in stock with the M/s Parker Bullion Pvt. Ltd. The backdating of stock clearly proves that the M/s Parker Bullion Pvt. Ltd did not have sufficient stock in books to have made the sales to the parties from whom RTGS has been received owing to which the it had to resort to fudging of books. In the absence of stock, no sales could have been made. It is for this reason that the backdating of purchases was carried out so as to manipulate the figure of available stock and present a false picture (which has been proved by the findings of digital forensic as discussed above) T. It is therefore very clear that the theory of alleged sale of bullion being the reason for receipt of RTGS is false. The sales which have been claimed are therefore entirely bogus and the RTGS which has been received by the assessee, is in lieu of the demonetized OHD notes which were given by the assessee to the cash handlers. U. Similarly, for another premises, i.e. Party AS-5 'M/s Parker Bullion Pvt Ltd a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... elevant post search investigation folder along with forensic report. AA. For genuine sales to have occurred, it is necessary that the bullion which is alleged to have been sold must have been in stock with M/s Parker Bullion Pvt. Ltd. The backdating stock clearly proves that the assessee did not have sufficient stock of books to have made the sales to the parties from whom RTGS has been received owing to which the assessee had to resort to fudging of books. In the absence of stock, no sales could have been made. It is for this reason that the backdating of purchases was carried out so as to manipulate the figure of available stock and present a false picture (which has been proved by the findings of digital forensic as discussed above) BB. It is therefore very clear that the theory of alleged sale of bullion being the reason for receipt of RTGS is false. The sales which have been claimed are therefore entirely bogus and the RTGS which has been received by the M/s Parker Bullion Pvt Ltd, is in lieu of the demonetised OHD notes which were given by the it to the cash handlers. CC. It is thus clear that backdating has been established in the data found in both the premises. xii ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... given to a person named Yogeshbhai. Incidentally, the proprietor of M/s Raj Enterprise, from whom RTGS has been received, is also Yogesh Baburao More. Sri Yogesh Baburao More has categorically denied having carried out any business transactions with M/s Parker Bullion Pvt. Ltd. in his statement recorded u/s.131 of the IT Act. Further, Yogesh More has categorically stated that his account was used for cheque discounting and providing accommodation entries. It is unbelievable that delivery of bullion was handed over to a person who himself has stated that his account was utilized by entry operators and has denied carrying out any business transactions. * Shri Yogesh More in his statement recorded u/s19(1) of the PBPT Act on 09.08.2017 has also denied of having signed any delivery challans for the delivery of gold. Hence the delivery challans submitted before the DCIT(BPU) by M/s Parker Bullion Pvt Ltd have been proved to be false. * M/s Raj Enterprises had been newly introduced to the Company M/s Parker Bullion Pvt Ltd by Shri Sanjay Soni, yet the total KYC documents like PAN, TAN, sales tax Number, TIN number, Cancelled Cheque etc needed for the business were not in the possess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has rather reached M/s Parker Bullion Pvt Ltd through a chain of transactions and sale of non-existent gold/bullion. The gold has been claimed to be sold to M/s Raj Enterprise and delivered to Shri Sanjay Soni but its final destination is ephemeral. * Thus, a crooked modus operandi was devised to bring in unaccounted money through a fabricated chain, fruits of which were enjoyed by M/s Parker Bullion Pvt Ltd. Books were fudged to give an appearance of stock availability and neither the owner of account was aware about the sale nor the seller party could prove the delivery of bullion to the holder of the account. Contradictions in the statement of persons in the chain, forensic analysis done by the investigation wing and other evidences unearth the real motive of transaction process, as discussed in pre pages. Hence in view of the above discussion and the evidence obtained after the passing of order u/s 24(4) of the PBPT Act, it is appraised to your good self that the facts and evidence of the present case warrants that M/s Packer Bullion Pvt. Ltd be impleaded as Beneficial Owner in the pending reference and the stocks of M/s Parker Bullion Pvt. Ltd. to the extent of Rs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... efore the DCIT(BPU), Ahmedabad. (iv) Shri Afzal Bhai (entry provider) in reply to question no. 16 of his statement recorded during survey operation at Axis Bank, Memnagar Branch, Ahmedabad on 27/12/2016 (Refer Annexure-A3 of the Reference u/s 24(5) of the Act dated 04.10.2017), stated that he and Tejas Desai had received a sum of Rs 48 Crore from Shri Sanjay Manubhai Soni and had deposited the sum into various accounts (accounts were of poor persons who had lent out their accounts to them for sum of Rs. 7000-8000 per month who have been named as benamidar here). Thereafter on instructions of Shri Sanjay Manubhai Soni the sums were transferred through RTGS into the account of various jewellers. Shri Afzal had also stated that the accounts into which several crores of OHD notes were deposited were the dummy concerns of the benamidars and no business activity was being done from these concerns (reply to question no. 14 of the statement dated 2712/2016). Shri Tejas Desai in reply to question no. 17 of his statement recorded on 27/12/216 (Refer Annexure-A5 of the Reference u/s 24(5) of the Act dated 04.10.2017),during survey operation at Axis Bank, Memnagar Branch, Ahmedabad had also ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ri Mohammed from the Mobile Number Provided by Shri Sanjay Soni and Shri Mohammed has in response to the Summons issued u/s 19(1) of the PBPT ACT had stated that he did not receive delivery of the Gold/ Bullion and he is into the business of scrap and not gold. He also submitted an Affidavit confirming the facts narrated by him in the statements recorded u/s 19(1) of the PBPT Act. (vi) The above stated series of events give a picture that the cash has been received from Shri Sanjay Soni, which is deposited in Bank account of M/s Raj Enterprise, from there it is transferred to account of M/s Shreeji Enterprise and thereafter Shri Sanjay Soni receives gold in lieu of money. Thus the proceeds of the benami property in form of bullion rest with Shri Sanjay Soni. (vii) In the light of above and on the basis of various statements recorded of the jewellers and the intermediaries it had been concluded by the Initiating Officer that Shri Sanjay Soni was the beneficiary owner of the sum of Rs. 5,83,98,850/- deposited in cash into the bank account of Shri Yogesh Baburao More Prop. Of M/s Raj Enterprise thereafter transferred into the bank account of M/s Shreeji Enterprise. (viii) Emerge ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orically asked vide question no.20 to explain the transactions carried out by Sanjay Manubhai Soni, Afzal Savjani and Tejas Desai through M/s Raj Enterprise and the remittances of approx. Rs. 5.83 crores received in the account of M/s Shreeji Enterprise from account of M/s Raj Enterprise. In response to the question, Bhaveshbhai Patel has stated that booking of gold bullion was done by Shri Sanjay Manubhai Soni. Later on Shi Sanjay Soni informed him on WhatsApp that money has been transferred by way of RTGS to their bank account maintained at Axis Bank from account of M/s Raj Enterprises. After the transfer of funds from M/s Raj Enterprise, Sh. Bhavesh Patel further said that his manager Shri Mahendra Patel would call Sanjay Soni and confirm about the person who had to come to collect bullion and later on bullion along with the bill was delivered to this person after taking his signature. Bhavesh Patel has clarified that neither has he known Shri Sanjay Soni before nor has he met him. The transactions were discussed on phone. Further, he has stated that no delivery challan was prepared by them for sales or purchases of bullion. He has also stated that transactions were done with Sh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Further, he has stated that Suresh Soni‟s son had come to deliver bullion at the office of M/s. Shreeji Bullion at Ahmedabad. It is observed that in both case of sale of bullion to Sanjay Soni and purchase of bullion from Suresh Bhai Soni, Bhavesh Patel could not produce any documentary evidences to show that physical exchange of bullion was done. In other words, there is no evidence to show that bullion was actually delivered or purchased Shri Bhaveshbhai B. Patel was requested to provide proof of physical exchange of bullion made by him. In reply, Bhavesh Patel has stated that purchase of bullion was made from Aurous Enterprises Pvt. Ltd. through Sureshbhai of Ratanpol and the sale of bullion was made to M/s Raj Enterprise by him through Sanjay Bhai Manubhai Soni. Thus Shri Bhavesh could not give any documentary evidence for the actual delivery of bullion either at time of sale to M/s Raj Enterprise nor for the purchase from M/s Aurous Enterprise. Mr. Bhavesh B Patel in his statement recorded u/s 132 of the Income Tax Act1961on 26/1/2017 has further stated that they do not maintain any register for stock accounting. On being asked that whether they maintain name, addre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... into the bullion trade. He has also submitted an affidavit before the Initiating Office in this regard. E. The facts and circumstances as discussed below leads to the conclusion that the M/s Shreeji Enterprises has not entered into transaction with M/s Raj enterprises in a regular course of business. * * Shri Yogesh Baburao More, Prop, of M/s Raj Enterprises has denied of having done any business activity in his firm. As per his statement dated 28/12/2016, Shri Yogesh Baburao More had in his reply to question no. 6 of his statement clearly stated that he is a labourer working in diamond industry and there is no business activity in M/s Raj Enterprises. It is just a paper concern. In the same statement in reply to question no. 13 he has clearly stated that he has not purchased anything from anyone by utilizing the fund in his bank account no. 916020056388231. The same facts have been reiterated by Shri Yogesh Baburao More in his statement recorded u/s 19(1) of the PBPT Act on 9/8/2017 before the DCIT(BPU), Ahmedabad. * Shri Afzal Bhai and Tejas Desai (entry providers) had stated that they had received a sum of Rs 48 Crore from Shri Sanjay Manubhai Soni and had deposited the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ission agent. Shri Bhavesh could not give evidence for the delivery of bullion in both the cases of transaction with Shri Sanjay Soni i.e. while making sale to M/s Raj Enterprises and second time while making purchase from M/s Aurious Enterprise a concern of Shri Sanjay Soni. It is further pointed out that the investigations revealed that there did not exist any firm in the name of M/s Aurious Enterprise at the address given in the bill of M/s Aurious Enterprise and the bill (dated 25/1/2017) had been issued just a day before the statement of Shri Bhavesh were recorded. * Though M/s Raj Enterprises had been newly introduced to M/s Shreeji Enterprise by Shri Sanjay Soni, yet, the total KYC documents like PAN, TAN, sales tax Number, TIN number, Cancelled Cheque etc. needed for the business were not in the possession of the M/s Shreeji Enterprise. * M/s Shreeji Enterprise could not give any documentary evidence for stock availability with it for giving delivery to M/s Raj enterprises. * The delivery of bullion, as claimed by Shri Bhavesh Patel, had been made to Shri Sanjay Soni or his person but there is no authorization letter from M/s Raj Enterprise. * Shri Sanjay Soni has s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ok (entries which have resulted in cash book having sufficient cash to deposit in bank on respective days) have been found to have been made on later dates. Actually, at the front end of the software i.e. the user interface which is seen by a user, the dates of these entries in cash book match those of the bank book. However, when the actual dates on which entries were made was examined from the back end i.e. from the database, it was revealed that these cashbook entries were actually made in much later months but were backdated by the assessee. I. The relevant portions of the cash entries are given, and backdating of CASH entries is explained, below: 1. In the following tabular data, record numbers in first column reflects actual sequence of entry with Invoice/voucher numbers and invoice/voucher dates at later columns. a) Column labeled as "SR" is the Record Number which can also be understood as Sequence Number or Order Number Automatically created by system depicting the order if which the data was entered. b) Columns labeled as "Voucher No." and "Document No." are the transaction number entered at the time of entry. These are User generated field and not Automatically g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t entries in Bank in the month of April continued till the month of November, a total of Rs. 32 Crore amount deposit entries in this period. However, the entries for the same were, in cash collection were made during the month of November‟s entry, i.e. after 22th of November‟s entry, which is abnormal. The following table shows the sequencing of group of entries which are more or less in sequence with few minor variations. It can be seen that there is an overlap in the recording of entries, which is not in possible if the entries are recorded properly. This is another evidence of backdating of entries. N. Above table explains the order in which the entries were made in the CASH file. The forensics report says that after 22-11-2016 the entries started for cash deposit in various bank accounts for the entire period of April to November 16. And then started the entries of Cash receipt i.e. credit. O. The following table shows few sample entries of first deposit entries and then cash receipt entries. There are about 2000 cash receipt entries of the value of Rs. 32 Crore after the deposit of same amount. P. Furthermore, forensic analysis of the bank entries in the data ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ji Enterprise (The seller and recipient of the RTGS) has thus failed to give evidence of the sale, the buyer (Through Shri Yogesh More benami prop of M/s Raj Enterprise) denies of having entered into any transaction with M/s Shreeji Enterprise. It is also inferred that there did not exist the complete chain of supporting evidences to prove the alleged gold deal to be true. Coupled with the fact that the forensic reports have proved that the assessee did not have enough stock as on the date of sale of the gold to M/s Raj enterprise The facts have been distorted and presented before the Income tax authorities to give a colour of genuine business transaction and to fix a person of no means to be responsible for the introduction of the undisclosed income. Here in this case OHD notes had been deposited into account of M/s Raj Enterprise (Prop. Shri Yogesh Baburao More) thereafter all the movement of money is claimed to have been genuine transaction of business so when any stringent measures are taken by the authorities then a poor ignorant man comes into picture, here Shri Yogesh Baburao More is one such person in whose account several crores of rupees have been deposited without his ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ullion from M/s Aurious Enterprise through a person named Shri Sureshbhai Soni, a commission agent. Shri Bhavesh could not give evidence for the delivery of bullion in both the cases of transaction with Shri Sanjay Soni i.e. while making sale to M/s Raj Enterprises and second time while making purchase from M/s Aurious Enterprise a concern of Shri Sanjay Soni. It is further pointed out that the investigations revealed that there did not exist any firm in the name of M/s Aurious Enterprise at the address given in the bill of M/s Aurious Enterprise and the bill (dated 25/1/2017) had been issued just a day before the statement of Shri Bhavesh were recorded. * * Though M/s Raj Enterprises had been newly introduced to M/s Shreeji Enterprise by Shri Sanjay Soni, yet, the total KYC documents like PAN, TAN, sales tax Number, TIN number, Cancelled Cheque etc. needed for the business were not in the possession of the M/s Shreeji Enterprise. * * M/s Shreeji Enterprise could not give any documentary evidence for stock availability with it for giving delivery to M/s Raj enterprises. * The delivery of bullion as claimed by Shri Bhavesh Patel, had been made to Shri Sanjay Soni or his ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Soni but its final destination is ephemeral. * Thus a crooked modus operandi was devised to bring in unaccounted money through a fabricated chain, fruits of which were enjoyed by M/s Shreeji Enterprise. Books were fudged to give an appearance of stock availability and neither the owner of account was aware about the sale nor the seller party could prove the delivery of bullion to the holder of the account. Contradictions in the statement of persons in the chain, forensic analysis done by the investigation wing and other evidences unearth the real motive of transaction process, as discussed in pre- pages. Therefore, the connivance of Bhavesh Patel, Sanjay Manubhai Soni and the entry operators is established and this can be seen as an effort to bring the unaccounted money into the books of accounts through banking channels. In view of above discussion, it is deduced that M/s Shreeji Enterprise is the beneficial owner of the transaction of Rs 5.83 crores made with M/s Raj Enterprise. Hence, in view of the above discussion and the evidence obtained after the passing of order u/s 24(4) of the PBPT Act, it is appraised to your goodself that the facts and evidences of the present c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... njay Manubhai Soni. He further stated that he has sold 10 kg. of gold bullion to M/s Raj Enterprise. The sale proceeds were received through RTGS. (Refer Annexure-A31 of the Reference u/s 24(5) of the Act dated 04.10.2017). In the statement recorded at the business premises, in response to Q.No.15, in his statement dated 25/1/2017 Shri Diptesh Soni has stated that he had directions from Sanjay Soni to receive RTGS payment from Shri Afzal Sadikali and Tejas Desai and deliver the goods. In the same statement, Shri Dipteshbhai has stated that Shri Sanjay Soni has introduced M/s Raj Enterprise to him as Sanjaybhai's own concern and has received RTGS from M/s Raj Enterprise. M/s Gayatri Jewellers alleged to have handed over bullion to Sanjay Soni. However, no evidence regarding delivery was produced. (Refer Annexure-A32 of the Reference u/s 24(5) of the Act dated 04.10.2017 (iii) During the course of proceedings under the PBPT Act, Shri Dipteshbhai Soni, Prop, of M/s Gayatri Jewellers claimed that the transaction with M/s Raj Enterprise were business transaction and no cash transaction were carried out. In the statement recorded u/s. 19(1) of the PBPT Act on 30.08.2017, it was sta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed the Rupees to the account of various jewelers on direction of Shri Sanjay Soni. (vii) Shri Sanjay Soni also accepted in his statement recorded that he had received the gold/bullion and he further made the delivery to a person named Shri Mohammed. However, in spite of various opportunities being provided to Shri Sanjay Soni to produce Shri Mohammed for cross verification by the Investigation wing and the Initiating Officer Shri Mohammed was not produced for verification of the delivery of the bullion by Shri Sanjay Soni to him. The Initiating Officer traced out Shri Mohammed from the Mobile Number provided by Shri Sanjay Soni and Shri Mohammed has in response to the Summons issued u/s 19(1) of the PBPT ACT had stated that he did not receive delivery of the Gold/ Bullion and he is into the business of scrap and not gold. He also submitted an Affidavit conforming the facts narrated by him in the statements recorded u/s 19(1) of the PBPT Act (Annexure P-3& P-4of this application) (viii) In the light of above and on the basis of various statements recorded of the jewelers and the intermediaries it had been concluded by the Initiating officer that Shri Sanjay Soni was the benefici ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d has stated that he does not remember the details presently and could provide the details only after going through books of account at his business premise. He further alleged that RTGS and remittances received from the three persons referred were in lieu of sale of bullion to such concerns. In this connection, he was asked to explain the mode and nature of these credits. In response, he has stated that he has sold gold bars to these three parties for which the payments have been received as mentioned above mode through RTGS. He stated that the books of account are maintained in computer in tally software in which purchase register, sale register, stock register etc. has been maintained. The books of accounts have been maintained by the Accountant, Bharatbhai Joshi, in his shop. He will give the details of above payment received after going through the computer which is in the office. On being confronted as to whether Shri Diptesh Soni knows "M/s Raj Enterprises", he stated that he does not know Yogesh Kumar More, proprietor of M/s Raj Enterprises, directly; but knows him through Sanjaybhai Manubhai Soni. He also stated that Sanjay Soni introduced him to M/s Raj Enterprises in N ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1/4/2016 to date of search. Perusal of the above account reveals that there had been no transaction with M/s Raj Enterprise, prior to the period of demonetization and even thereafter. It is important to note here that M/s Raj Enterprise had been into operation since September 2016. G. The two Bills raised in the name of M/s Raj Enterprise were found by the investigation team during the course of search proceedings. H. From the above bills and ledger of M/s Raj Enterprise it is seen that 1. No transactions before 8/11/2016 with M/s Raj Enterprises though the concerns had been created and registered in the month of September. The bank account was also operative since the month of September. If Shri Yogesh Baburao More has really wanted to enter into the bullion trade he would have done so right from the inception of the firm M/s Raj enterprise. Further, it is to be noted that the festival of deepawali had passed in between when there is maximum consumption of gold in Gujarat and no business has been done during this peak period. 2. No signature of the alleged delivery on the bills is seen 3. No mention of Shri Sanjay Soni has been made on bill just to indicate that the all ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ar here). Thereafter, on instructions of Shri Sanjay Manubhai Soni the sums were transferred through RTGS into the account of various jewellers. Hence the sum had been transferred from M/s Raj Enterprise to M/s Gayatri Jewellers on instruction of Shri Sanjay Soni. * M/s Raj Enterprises had been newly introduced to the M/s Gayatri Jewellers by Shri Sanjay Soni, yet the total KYC documents like PAN, TAN, sales tax Number, TIN number, Cancelled Cheque etc. needed for the business were not in the possession of the firm. * M/s Gayatri Jewellers could not give any documentary evidence for availability of stock for giving delivery to M/s Raj enterprise. * The delivery of bullion as claimed by Shri Diptesh Soni, Prop of M/s Gayatri Jewellers, had been made to Shri Sanjay Soni or his person but there is no authorization letter from M/s Raj Enterprises, nor there is any evidence of delivery. * Shri Sanjay Soni has stated in his statement dated 26/1/2017 that he had received the gold on behalf of M/s Raj Enterprise and then further handed over to Shri Mohammed. However, Shri Mohammed was never produced by shri Sanjay Soni for verification. In the PBPT proceedings Shri Mohammed had den ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gold of more than 55 crores from various firms and in none of the cases there is proof of delivery of bullion to M/s Raj Enterprises. Further M/s Raj Enterprises is seen to be dealing with big merchants Like M/s Parker Bullion Pvt. Ltd (who directly imports gold) to small dealers like M/s Gayatri Jewellers who themselves buy bullion from the big merchants. If in true sense M/s Raj Enterprises would have been into bullion trade that it could have bought the bullion from one big concern itself, at a competitive rate, rather than dealing with many concerns. Hence in view of the above discussion and the evidence obtained after the passing of order u/s 24(4) of the PBPT Act, it is appraised to your goodself that that the facts and evidence of the present case warrants that M/s Gayatri Jewellers be impleaded as Beneficial Owner in the pending reference and the stocks of M/s Gayatri Jewellers to the extent of Rs. 2,95,87,500/ may kindly be provisionally as well as permanently attached by declaring the same as benami property. SCHEDULE-IV M/s M.S. Jewellers, Prop: Shri Suresh Kumar Soni (R- 134/2017) (i) In this case it had been seen that Shri Yogeshkumar Baburao More, Prop. M/s Ra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e details of M/s Raj Enterprises and invoices were prepared in the name of M/s Raj Enterprises. According to him, the delivery of gold was done at jewellery shop of Sanjay Manu Bhai Soni located at "Gold House", Khetar Pal ni Pol, Manekchowk, Ahmedabad. He further clarified that Shri Sanjay Son gave the confirmation to the delivery boy after making them wait for few hours. (iii) also filed by M/s. M.S. Jewellers on 05.08.2017 in response to the notice u/s. 24(1) of the PBPT Act and in the reply the delivery challans were submitted. It was also stated by M.S. Jewellers that all the transactions carried out by them with M/s Raj Enterprise were carried out through RTGS in Bank and no cash transactions were involved. In view to enquire in detail, summons was issued u/s.19(l)(b) to the M/s M.S. Jewellers on 31.07.2017. In response to the same, Shri Suresh Kumar Soni Prop. Of (M/s M S. Jewellers) appeared on 09.08.2017 and his statement was recorded. In the statement recorded, Shri Suresh Kumar Soni said that all the delivery of gold has been made to Sanjay Manu Bhai Soni (Refer Annexure A-26 of Reference U/s 24(5) dated 04.10.2017). He also said the he did not know Shri Yogesh Baburao ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing you their KYC. Hence, we took KYC & legal documents i.e. PAN, TIN of M/s. Raj Enterprise. When we online checked the validity of the company, the company (firm) was active. After that, our office staff Bhavesh Sitaram Patel and part time Accountant Vishal Hashmukhbhai Panchai delivered 10 kg on 22.11.2016, 14 kg on 24.11.2016 and 1 kg gold 24.11.2016 to Sanjay Manubhai Soni‟s office. I give you the copy of Affidavit. Q.7 In answer to Q.6, you said you delivered gold to Sanjay Manubhai Soni‟s office but the delivery challan is signed by Yogesh Kumar. Can you state where is thesign and whether thesign was made in your presence? Ans. As I said that delivery of gold is made in Sanjay Manubhai Soni‟s office and our office staff Bhavesh Sitaram Patel and part time Accountant Vishal Hashmukhbhai Panchai used to give delivery. While giving delivery they cariy 02 copies of Tan invoices (Original and duplicate). Theygave Original to Sanjaybhai and asked to make sign on the duplicate. Then Sanjaybhai tells them to come after half an hour so that he will get the sign on the duplicate. When after half an hour, when they go to Sanjaybhai to collect the duplicate Tan invoi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... count of various jewellers. Shri Afzal had also stated that the accounts into which several crores of OHD notes were deposited were the dummy concerns of the benamidars and no business activity was being done from these concerns (reply to question no. 14 of the statement dated 27/12/2016). (vi) Shri Tejas Desai in reply to question no. 17 of his statement recorded on 27/12/216 during survey operation at Axis Bank, Memnagar Branch, Ahmedabad had also stated that he and Afzal Bhai received RS 48 Crore from Shri Sanjay Soni (Refer Annexure A5 of Reference u/s 24(5) dated 04.10.2017). They then deposited the sum of Rs. 48 crores into the various dummy accounts and thereafter transferred the Rupees to the account of various jewelers on direction of Shri SanjaySoni. (vii) Shri Sanjay Soni also accepted in his statement recorded that he had received the gold/bullion and he further made the delivery to a person named Shri Mohammed. However, in spite of various opportunities being provided to Shri Sanjay Soni to produce Shri Mohammed for cross verification by the Investigation Wing and the Initiating Officer. Shri Mohammed was not produced for verification of the delivery of the bullion ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y, Gala Gymkhana Road, South Bopal, Ahmedabad. He has stated in his statement dated 24/01/2017 that he is handling all affairs of M. S. Jewellers. He is responsible for sales, purchase of Gold, Silver bullions, job work, sales of ornaments (retail &wholesale), manufacturing and selling. Shri Bhavesh Soni has further stated that Books of Accounts are maintained at his office at 19, Golden Market, Pankornaka, Shethni Pol, Ahmedabad and updated monthly. On being asked about the process of business he has stated that once the enquiry from customer is received about the requirement on phone, they quote rates and once confirmed, gold is booked with the gold importer. After receipt of payment from the client, the gold is delivered. He has further stated that they earn commission ranging from Rs. 1000 to Rs. 5000/- per Kilogram and sometimes incur loss also and they do not maintain any register for order received and actual delivery. Such transactions are recorded in rough paper. Once such transactions are completed, it is entered in Books of Accounts after generating invoice. The same procedure is followed in sale also. B. On being asked about business transactions with M/s Raj Enterpri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the IT Act on 24/01/2017 at his residence is as under: At question No. 26, Bhavesh Soni was asked about business transaction with the concern M/s Raj Enterprise. In reply, he neither knows the proprietor of M/s Raj Enterprise nor has he talked with him. On 13/11/2016, he received a call from Sanjay Manubhai Soni for booking of gold bullion and payment for which was made from Aurous Enterprises Pvt. Ltd. Sanjay Soni had also made another deal for booking gold bullion, but payment of the same was made through the concern M/s Raj Enterprise. Sanjay Soni had later on provided PAN, TIN, address proof of M/s Raj Enterprise. Further, Bhavesh Soni confirmed that the actual delivery of gold bullion was made to Sanjay Manubhai Soni as per the directions of the latter. At question No. 28, Bhavesh Soni was asked to produce evidences regarding delivery of gold to Sanjay Soni though RTGS was made from the bank account of M/s Raj Enterprise. In reply, he stated that he did not have any such evidence and the transaction was made through phone and the delivery was made to Sanjay Soni though funds have been remitted from the bank account of M/s Rai Enterprise. At question No. 32, Bhavesh S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fidavit before the Initiating Officer narrating the above acts. F. The claim of Sanjay Soni is not acceptable for the reason that the proprietor of M/s Raj Enterprise, Shri Yogesh Kumar in his statement recorded on 28/12/2016 u/s 131 of the Income Tax Act 1961 and on 9/8/2017 u/s section 19(1) of the PBPT Act has stated that he has never been into a business relation either with SanjayBhai or with M/s M.S. Jewellers. He has denied of any order for gold/bullion, placed before M/s M. S. Jewellers, through Sanjaybhai. Hence the whole story of the business transaction is built up on flimsy grounds where neither the buyer knows that he is buying gold nor the seller knows who is buying the gold worth several crores of rupees. G. Digital Forensic Evidences pertaining to M/s M.S.Jewellers. During the course of survey carried out at M/s M.S. Jewellers (Prop. Suresh Soni) located at 19, Golden Market (Inside Seth Ni Pole), Ratan Pole, Ahmedabad imaging of the digital devices was carried out and subsequently the data was extracted. H. Further analysis of data revealed difference and variations in both the above-mentioned versions of Tally databases. The comparison of Sales and Purchase, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ar at higher Alter ID in database. L. The backdating of entries is very clear from the above table. It can be seen that from the columns highlighted, the backdated entries begin. For the entire year, the total value for sales with such non-sequential entries is Rs. 3,70,14,803 where retail sales are of the value of Rs. 2,04,69,126/- and taxable sales is of the value of Rs. 1,65,45,677. Besides, in addition to this group of entries, there are also some other similar entries which do not appear in sequence. This is not a case of bona fide mistake. This is proven from the fact that entries in the book continued to be made sequentially during the period to which the back dated entries pertain. M. Accordingly, it is evident that these backdated sales represent unaccounted sales, which have been recorded to introduce cash in the books which was deposited on subsequent dates. The backdated sales of Rs. 3,70,14,803/- and the backdated purchases would be claimed as the source of stock sold in these sales. This examination is likely to lead to finding that the purchases which are shown by the assessee to have provided the stock which was sold by the backdated sales has not been paid for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ries for purchases, showing the sequence of entries can be seen in the analysis data given by forensics expert and placed in the relevant post search investigation folder along with forensics report. Q. The last column gives the invoice numbers, some of the screenshots are reproduced below from Tally, showing the matching entries from the front end, which corroborates the findings given above. R. For genuine sales to have occurred, it is necessary that the bullion which is alleged to have been sold must have been in stock with the assessee. The backdating of stock clearly proves that the assessee did not have sufficient stock in books to have made the sales to the parties from whom RTGS has been received owing to which the assessee had to resort to fudging of books. In the absence of stock, no sales could have been made. It is for this reason that the backdating of purchases was carried out so as to manipulate the figure of available stock and present a false picture (which has been proved by the findings of digital forensic as discussed above). It is, therefore, very clear that the theory of alleged sale of bullion being the reason for receipt of RTGS is false. The sales which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oney entered into the name lending benami accounts had been immediately remitted in the bank accounts of M/s. M.S. Jewellers, and the same has not been satisfactory explained, M/s M.S. Jewellers is the beneficiary owner of such cash received in its account from the benami accounts, as the creditworthiness of the name lending concerns to whom bullion sales have been done and genuineness of transactions could not be established. Further, no evidence of effective actual delivery of bullion by M/s M.S. Jewellers was furnished. Another noteworthy fact is delivery of bullion was not given to concerns from whom the money was received and in whose names the bills have been drawn. That these concerns are dummy concerns has already been established as discussed above. (xii) Conclusion: As discussed in prepages, it is strongly pointed that M/s M.S. Jewellers (the seller and recipient of the RTGS) has failed to give evidence of the sale and the buyer (through Shri Yogesh More benami prop of M/s Raj Enterprise) denies of having entered into any transaction with M/s M.S.Jewellers. It is also inferred that there did not exist the complete chain of supporting evidences to prove the alleged gol ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aj Enterprises has denied of having done any business transaction and also of having received any gold. The seller could not give foolproof evidence for the availability of gold with it for delivery. The seller further could not give concrete evidence of delivery as no authorization was available on record. Lastly the gold alleged to have been received by Shri Sanjay Soni and then given to Shri Mohammed has also proved to be false, thereby, veiling the real motive of transaction. Last but more importantly, the forensic reports have proved that there had been back dating of the books of accounts to make availability of the stock and requisite funds during the demonetization period in order to divert the unaccounted money so accumulated over the years, into the main stream. * Shri Sanjay Manubhai Soni is a link in the whole transaction cycle- from Shri Afzal Savjani to Shri Yogesh Baburao More (Prop. M/s Raj Enterprises) to M/s M.S. Jewellers. Shri Sanjay Manubhai Soni in his statement dated 9/8/17 u/s 19(1) of the PBPT Act has also stated that the money did not belong to him. Further when the amount was deposited into various bank accounts by Afzal Savjani and Tejas Desai, Shri Sa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Tax Act1961 (Refer Annexure-A12 & A13 of the Reference u/s 24(5) of the Act dated 04.10.2017), wherein he has categorically stated that the bank account No. 916020056388231 in the name of M/s Raj Enterprise was opened in month of September 2016 as per the instructions of Tejas C. Desai and Afzal Savjani, entry operators. It has been stated by Shri Afzal Savjani and Tejas Desai in their statement recorded u/s. 131 of the Income Tax Act dated 27.12.2016 that they used to operate the account no. 916020056388231 of M/s Raj Enterprise. (iii) Statement of Shri Ajesh Patel Prop. M/s Patidar Bullion were recorded u/s 132(4) dated 24/1/2017 (Refer Annexure A-20 of Reference u/s 24(5) dated 04.10.2017)) at his residence at 21 Vrundavan Villa 5, Opp: Divine Hi Land, Behind: JBR Arcade, Science City Road, Sola, Ahmedabad wherein he has stated as under * * At question No. 13, Ajesh A Patel was asked as to state whether he knew Sanjay Manubhai Soni, Afzalbhai Savjani Sadikali, Tejas C. Desai, Yogeshkumar More (Proprietor of Raj Enterprise). He replied that he knew Sanjay Manubhai Soni who runs a concern by name of Soni Sanjay Manubhai. Further, hestated that he had done trading of gold ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m his staff used to come to collect the bullion. The name of the person to whom delivery was to be done was told by Yogeshkumar Baburao More through phone and the delivery of bullion was done to that person accordingly. * At question No. 17, Shri Ajesh Patel was asked as to how Yogeshkumar Baburao More resembled. In reply, he stated that he did not know how Yogeshkumar resembled as they used to talk over phone. * As in reply to question No. 17, Shri Ajesh Patel had stated that he did not know how Yogeshkumar resembled, he was further asked at question No. 18 as to whether he had ever met Yogeshkumar Baburao More. In reply, he admitted that he had never met Yogeshkumar Baburao More (Prop. Raj Enterprise). * Then at question No. 19, he was asked to verify the contact number of Yogeshkumar from both his mobiles (ie. Iphone & Intex) but he stated that he was unable to find the phone number of Yogeshkumar from his mobile. * At question No. 20, since Ajeshbhai Amrutlal Patel had never met Yogeshkumar Baburao More, he was asked to explain as to how sale was done with him. In reply, he stated that the rate of bullion was discussed over phone and delivery was done to the person ment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lmost 7 months and stated that against the remittances received from the benami account of M/s Raj Enterprise, the delivery gold was made to Shri Sanjay M Soni. (v) Shri Yogesh Baburao More (Prop. Of M/s Raj Enterprise) in his reply to question no. 6 of his statement recorded on 28/12/2016 by the Investigation wing had clearly stated that he is a labour working in diamond industry and there is no business activity in M/s Raj Enterprises. It is just a paper concern. In the same statement, in reply to question no. 13 he has clearly stated that he has not purchased anything from anyone by utilizing the fund in his bank account no. 916020056388231. The same facts have been reiterated by Shri Yogesh Baburao More in his statement recorded u/s 19(1) of the PBPT Act on 9/8/2017 before the DCIT(BPU), Ahmedabad. (vi) Shri Afzalbhai (entry provider) in reply to question no. 16 of his statement recorded during survey operation conducted by the investigation wing of the department at Axis Bank, Memnagar Branch, Ahmedabad on 27/12/2016 (Refer Annexure-A3 of the Reference u/s 24(5) of the Act dated 04.10.2017), stated that he and Tejas Desai had received a sum of Rs. 48 Crore from Shri Sanjay ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... business of scrap and not gold. He also submitted an Affidavit confirming the facts narrated by him in the statements recorded u/s19(1) of the PBPT Act. (x) In the light of above and on the basis of various statements recorded of the jewelers and the intermediaries it had been concluded by the Initiating officer that Shri Sanjay Soni was the beneficiary owner of the sum of Rs. 7,10,56,625 /- deposited in cash into the bank account of Shri Yogesh Baburao More, Prop, of M/s Raj Enterprises and thereafter transferred into the bank account of M/s Patidar Bullion. (xi) Emergence of new facts as per Forensic and other queries done by Investigation wing post passage of order by ACIT (BPU): A. High Cash deposits in bank accounts of Patidar Bullion: During the period post 8/11/2016, Ajesh A Patel has made cash deposits in OHD notes of Rs. 500 and Rs1000 in his bank accounts. When asked about cash deposits of old high denomination notes of his concern post demonetization, he replied that around Rs. 15 to 16 crores were deposited in three different accounts. 1. 2. 3. Axis Bank, Relief Road, Ahmedabad State Bank of India, Main Branch, Laldarwaja Punjab National Bank, Kalupur Further, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eighing machine and confirm it from the customer. After final weighing, quantity and rate will be communicated and cash memo of retail sale will be generated from computer and print out of the same shall be taken. Then after print of cash memo one copy will be handed over to customer and in one copy the customer signs acknowledging the delivery. Thereafter customer shall make the payment which shall be verified and counted by the seller. The entire process shall take about 15 to 20 minutes. It is impossible to serve 690 customers in a single day as alleged by Ajesh A Patel. Moreover, the entire process as narrated supra is stated to have taken less than one minute for each transaction which is impossible beyond all imaginations. J. Accordingly it can be concluded that the ill-gotten and illicit funds of Shri Ajesh Patel has been introduced by him in his books by disguising the same as cash sales which could not be substantiated. Thus, it is clear that Shri Ajesh Patel is in the habit of generating unaccounted cash, which has been introduced in the books through his own bank accounts and through the bank accounts of benami entities under the garb of bullion sales. K. Transaction ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... j Enterprise (Prop. Shri Yogesh Baburao More) thereafter all the movement of money is claimed to have been genuine transaction of business so when any stringent measures are taken by the authorities then a poor ignorant man comes into picture, here Shri Yogesh Baburao More is one such person in whose account several crores of rupees have been deposited without his knowledge. At the cost of repetition, the following points are again put up for candid observation: * * Shri Yogesh Baburao More, Prop of M/s Raj Enterprises has denied of having done any business activity in his firm and of having entered into any transaction with M/s Patidar Bullion or of having received any gold as a result of the alleged sale of gold * Shri Afzal Bhai and Tejas Desai (entry providers) had stated that they had received a sum of Rs 48 Crore from Shri Sanjay Manubhai Soni and had deposited the sum into various accounts (accounts were of poor persons who had lent out their accounts to them for sum of Rs. 7000- 8000 per month who have been named as benamidar here). Thereafter, on instructions of Shri Sanjay Manubhai Soni the sums were transferred through RTGS into the account of various jewellers. H ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the PBPT act has also stated that the money did not belong to him. Further when the amount was deposited into various bank accounts by Afzal Savjani and Tejas Desai, Shri Sanjay Soni directed them to transfer the fund to various parties implying that as per the scheme the money would land into the hands of the owners travelling through banking channels, thus regularizing the unaccounted money. In this case the money has rather reached M/s Patidar Bullion through a chain of transactions and sale of nonexistent gold/bullion. The gold has been claimed to be sold to M/s Raj Enterprise and delivered to Shri Sanjay Soni but its final destination is ephemeral. * M/s Patidar Bullion had entered into such fictitious transaction with other dummy firms as well namely Sai Bullion, Tirupati Jewellers and in these cases also M/s Patidar Bullion has been held to be the beneficiary owner. Please refer Reference no. 141 and 142 respectively. * Apart from rotation of black money through dummy concerns, M/s Patidar Bullion has also deposited huge cash into its various bank accounts post demonetization and the source of which had not been explained byShri Ajesh Patel, Prop, of M/s Patidar Bullion ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... served to the appellants along with application filed by the Initiating Officer under Section 26(5) and 26(6) of the Act of 1988. It has been conveniently ignored by the appellants. It may be for the reason that the FSL report of digital devices and other evidences made it clear that the bullion companies namely M/s Parker Bullion Pvt. Ltd, M/s Gayatri Jewellers, M/s Shreeji enterprises, M/s Patidar Bullion Pvt. Ltd., M/s M.S. Jewellers, Kundan Trading Company, M/s Shital Jewellers and M/s Shivam Jewellers were involved in benami transaction. They were not having stock of gold to match the amount received by them through RTGS. In fact, back dated entries were made in the record and could be visualized from complete chain of evidence. The FSL report has been detailed out to the appellant by serving the relied upon documents and otherwise detail discussion in Schedule I to V is based on other evidences as well. The detail discussion therein make it clear as to how bullion companies circulated demonetized money to convert it to legal tender. Therefore, excuse has been taken by the appellant for non- supply of the FSL report which is in fact detailed out and was given to them. Thus, we ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... through the abettors was said to have been delivered further to one 'Mohammad' who has refused about delivery of gold. The respondent thus tried to reach to the complete chain to find out actual happening. It is further necessary to clarify that if the gold was purchased, the appellant bullion Company should have produced the payment towards the alleged gold but no such material was produced in a specific. The critical analysis of all the issues has been made in the order passed by the Adjudicating Authority and we don't find any error therein to cause interference in the finding and accordingly the appeal fails and dismissed. The case of the abettors The argument against the attachment has been raised by the abettor. It is submitted that their property has been attached while they were not the beneficial owner or the benamidars. A reference of section 53 of the Act of 1988 has been given to show that abettors can be subjected to prosecution but there is no provision for attachment of their property. The counsel for the respondents made a contest to it. However, we find substance in the argument of the counsel for the abettors. As per the framework of the Act of 1988, what c ..... 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