9911796707
TMI Blog2024 (6) TMI 1045X X X X Extracts X X X X X X X X Extracts X X X X ..... he premium of Rs. 990/- by a Company having no business at all, rather it was existing on papers to provide accommodation entries. The fact aforesaid was conveniently ignored by the Adjudicating Authority and tried to focus only on the period subsequent to the benami transaction by which money was injected in the accounts of M/s Danodia Investments Finance Ltd. We find that the subsequent transaction was out of the benami property defined under section 2 (8) of the Act of 1988, and was otherwise out of the benami transaction of M/s Danodia Investments Finance Ltd. Adjudicating Authority conveniently ignored the fact regarding non-existence of 79 entities or it was on papers and pumped in the money in the accounts of M/s Danodia Investments Finance Ltd. The funds came even subsequently in the year 2014-15 also by way of benami transactions and therefore only despite the notice, 79 entities did not respond to the notice. We find that the impugned order is based on surmises and conjectures. And thereby the Adjudicating Authority had ignored all the relevant facts available on record and even referred in the impugned order. Affidavit filed by the non-appellant which is common for major ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 3. The learned counsel for the appellant submitted that M/s Danodia Investments and Finance Limited was a Company incorporated on 26.09.1994, having its registered office at Shahadra, New Delhi. The Company was subsequently transferred to Kolkata with registered office at Chowringhee Road, Kolkata. 4. The appellant received reference letter dated 07.08.2017 from the Deputy Director, Income Tax (Investigation), Kolkata along with the details of the properties of Square Four Group and the source of the investment. The reference letter was sent after a search and seizure operation conducted on 03.02.2017 under section 132 of Income Tax Act, 1961. It was noted that M/s Danodia Investments and Finance Limited has raised capital through certain companies which were only on papers. The money received by M/s Danodia Investments and Finance Limited from shell companies was used to advance loan and investment to various other respondent entities. 5. At the time of search and seizure, the amount of loan to the tune of Rs. 27,81,47,180/- as on 31.10.2017 was found due against 20 entities of which details have been given in the impugned order. 6. In the enquiry, it was found that the money wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... also found that though M/s Danodia Investment Finance Limited is having its Directors but is being managed by the Square Four Group Companies. The Record of M/s Danodia Investments Finance Ltd. was recovered from the office of Square Four Group Companies. The benami properties in the hands of M/s Danodia Investment was used by 20 entities and individuals to their benefit and finding a case, the accounts were attached. However, the Adjudicating Authority has refused to confirm the attachment on the ground that M/s Danodia Investment Finance Ltd has advanced the loan to the Square Four Group Companies in the course of business and the record shows repayments of the loan amount by the Square Four Group Companies and in any case, the loan advanced to those companies was not by way of benami transaction because its source was known. The advances were made by the M/s Danodia Investment to Square Four Group Companies largely through bank transaction. Hence, not only the sources were known, but even the transfer of money was by the proper channel, thus, it could not have been taken to be the case of benami transaction. 11. The learned counsel for the appellant has submitted that the Adjudi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been issued showing it to be benami transaction defined under section 2 (9) (D) of the Act of 1988 as amended w.e.f. 1st November, 2016. The case in hand does not fall under section 2 (9) (D) because loan advanced to the 20 entities by M/s Danodia Investment Finance Ltd. was by disclosed sources and thereby the transaction was not falling in the definition of benami transaction as defined by the Amendment in the Act of 1988. 14. The appellant even failed to place on record any material to show that M/s Danodia Investment Finance Ltd. was owned and run by Square Four Group Companies, rather the material on record would prove that M/s Danodia Investment Finance Ltd. is a separate entity and having their own Director. If investment was made by M/s Danodia Investment Finance Ltd in favour of 20 entities by way of loan, it could not have been reckoned to be the case of benami transaction. 15. Thus, for all the reasons given above and supporting the impugned order, the learned counsel for the respondents prayed for dismissal of the appeal. 16. We have considered the rival submission and perused the records carefully. The facts on record shows that M/s Danodia Investments Finance Limited ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... search operation on 03.02.2017 in the office of Square Four Group, account of M/s Danodia Investments Finance Ltd was found. It was stated by him that in the year of 2014-15, around Rs. 16 crore were transferred to 26 Companies of Nature Group from the bank account of ICICI bank. Later on, those funds came back to M/s Danodia Investments Finance Ltd in Andhra bank. The Funds were then transferred to various Square Four Group Companies who are the beneficial owners of the benami transaction. It was also stated that Ganesh Kumar Singhania is a key person of Square Four Group. The statement further revealed that in the financial year 2008-09, bogus share capital was generated in M/s Danodia Investments Finance Ltd when shares were allotted at the premium of Rs. 990/- per share, however the allocation was only on paper. The Company was not as such doing any business and the money was pumped in by issuing shares on papers on a premium of Rs. 990/-. In the year 2013, he took the Company and in the year 2014-15, sold it to the Square Four Group. It was admitted that source of fund was un-accounted cash of Square Four Group which was pumped in through layering by various companies. 22. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... year 2009 through various companies and transferred to different companies thereupon in the year 2010. 28. The aforesaid is relevant and the statement of the aforesaid is reproduced hereunder for ready reference: - Date of Allottment Name of Share Allottee No. of Shares {A} Face Value {B} Premium Per Share {C} Total Amount {A*(B+C)} 29.01.2009 H B RETAILS PVT LTD 40,000.00 10.00 990.00 40,000,000.00 29.01.2009 HIMANI DEVELOPERS PVT LTD 40,000.00 10.00 990.00 40,000,000.00 29.01.2009 P R VYAPAAR PVT LTD 30,000.00 10.00 990.00 30,000,000.00 29.01.2009 SHUBH INDUSTRIES PVT LTD 35,000.00 10.00 990.00 35,000,000.00 29.01.2009 VIRGIN CAPITAL SERVICES PVT LTD 20,000.00 10.00 990.00 20,000,000.00 29.01.2009 ZENITH AUTOMOTIVE PVT LTD 25,000.00 `10.00 990.00 25,000,000.00 31.03.2009 MAHAK INFRASTRUCTURE PVT LTD 16,800.00 10.00 990.00 16,800,000.00 31.03.2009 SHUBH INDUSTRIES PVT LTD 33,300.00 10.00 990.00 33,300,000.00 The shares so issued were partly transferred to different Companies, the details of which are given below: Date of Transfer Name of Transferor No. of Shares Name of Transferee 29.03.2010 KRITI CREARING AGENCY PVT LTD 350000 NILE VANIJYA PVT LTD 29.03.2010 AAROHI INFOCOM PVT L ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... JRANG TRADERS DCB BANK 08922700001526 Cash Deposit Account 5 RAJEEV KUMAR DCB BANK 08922700001939 Cash Deposit Account 6 YADUKA AGROTECH PRIVATE LIMITED DENA BANK 005813023763 Cash Deposit Account 7 YADUKA AGROTECH PVT LTD DENA BANK 005813023763 Cash Deposit Account 8 SANWARI CREATION DCB BANK 08922700001519 Cash Deposit Account 9 MANORAMA FASHION DCB BANK 08922700001465 Cash Deposit Account 10 ROSEMARY VINCOM PVT LTD DCB BANK 08940200001571 Cash Deposit Account 11 WESTERN TRADING CO. BANK OF INDIA 407720110000057 Cash Deposit Account 12 VANDANA ENTERPRISES BANK OF INDIA 407720110000059 Cash Deposit Account 13 UNIQUE TRADERS BANK OF INDIA 407720110000058 Cash Deposit Account 14 SUREKA TADERS BANK OF INDIA 407720110000060 Cash Deposit Account 15 SHINE TRADING CO BANK OF INDIA 407720110000061 Cash Deposit Account 16 NAMRATA ENTERPRISES BANK OF INDIA 407720110000056 Cash Deposit Account 17 KHEMKA TRADING CO BANK OF INDIA 407720110000053 Cash Deposit Account 18 GOOD LUCK ENTERPRISE BANK OF INDIA 407720110000054 Cash Deposit Account 19 MAYUR TRADING CO (SUMON GHOSH) BANK OF INDIA 401020110000536 Cash Deposit Account 20 UNIQUE CREATION (SUMON GHOSH) BANK OF INDIA 401020110000540 Cash Dep ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncern 26 ROSEMARY VINCOM PVT LTD DCB BANK 08921900028486 Layering Paper concern 27 SWAPANIL TRADE AND COMMERCE PVT LTD ICICI BANK 605026099 Layering Paper concern 28 BEMISHAL INFRAPROJECTS PVT LTD DCB BANK 08921900027618 Layering Paper concern 29 ETERNITY DEALMARK PVT LTD IDBI Bank 0060102000132862 Layering Paper concern 30 PRINTER DEALCOM PVT LTD DCB BANK 08921900028477 Layering Paper concern 31 ENHANCE DEALMARK PVT LTD DCB BANK 08721900002134 Layering Paper concern 32 HIBISCUS TRADELINKS PVT LTD IDBI Bank 0060102000130936 Layering Paper concern 33 BUTTERCUP DEALCOM PVT LTD IDBI Bank 0060102000130967 Layering Paper concern 34 `ROSEMARY VINCOM PVT LTD IDBI Bank 0060102000130790 Layering Paper concern 35 BLUEBELL TRADECOM PVT LTD IDBI BANK 60102000130042 Layering Paper concern 36 HOOGHLY TRADELINKS PVT LTD IDBI Bank 0060102000130929 Layering Paper concern 37 TRIDENT DISTRIBUTORS PVT LTD IDBI Bank 0060102000131063 Layering Paper concern 38 LAUREL TRADECOM PVT LTD DCB BANK 8921900028495 Layering Paper concern 39 LIBERAL DEALMARK PVT LTD IDBI BANK 0060102000129824 Layering Paper concern 40 HEPTA DEVELOPERS PVT LTD HDFC BANK 30340057534 Layering Paper concern 41 H B RETAILS PVT LTD HDFC ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... yering Paper concern 72 SANDARBH DEALERS PVT LTD IDBI BANK 0359102000022303 Layering Paper concern 73 FRESHLIGHT APPARELS PVT LTD IDBI BANK 0060102000137058 Layering Paper concern 74 GREEN FORCE PVT LTD IDBI Bank 0060102000137515 Layering Paper concern 75 FLY VISION DESIGN PVT LTD IDBI Bank 0060102000137065 Layering Paper concern 76 BHAIRONATH TRADERS PVT LTD IDBI Bank 0060102000135276 Layering Paper concern 77 EARTH VINCOM P LTD IDBI Bank 0060102000132138 Layering Paper concern 78 ALLMOST TRADELINK PVT LTD CANARA BANK 0397201001994 Layering Paper concern 79 ANANDDHARA COMMOTRADE PVT LTD SBI 34439407459 Layering Paper concern 30. Based on the fund trail and the bank statement, it could be established that money came by layering or cash deposit. To find out the truthfulness of the transaction, the summons were issued to 79 entities who had pumped the funds in M/s Danodia Investments Finance Ltd. It was even to give them a proper opportunity. The enquiries were conducted even through the Inspectors. It was found that most of the Companies are non existent at their registered address and none of the entities have appeared to confront the facts regarding the transfer of the funds in M/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 49580 168575 174845 A company managed operator through income The genuineness carry out 11 BLUEMOON COMTRADE PVT LTD AADCB6733D 35, Ganesh Chandra Avenue 3rd Floor Kolkata Kolkata WB 700013 IN NOT FILED 0 0 0 0 0 6154 A company managed operator through income and not The genuineness carry out 12 NESTER TRADING PRIVATE LIMITED ( Formaly known as DISHAYEN LEASING PRIVATE LIMITED) AAACD0194R H-96-KH NO- 21/6 ADYAPAK NAGAR NANGLOI North West DELHI North West DL 110041 IN 0 0 0 5940 65830 309542 297692 A company managed operator through income and not The genuineness carry out 13 PEARL VINTRADE PVT LTD AAECP9437D 35, Ganesh Chandra Avenue 3rd Floor Kolkata Kolkata WB 700013 IN 0 0 0 0 0 0 5667 A company managed operator through income and not The genuineness carry out 14 STARLIGHT DEVCON PVT LTD AAMCS7290P 70/B, 2nd Floor,Lenin Sarani Kolkata Kolkata WB 700013 IN 99990 95760 377460 325460 191700 24445 0 A company concern and creditworthiness above transactions 15 PEARL VINTRADE PVT LTD AAECP9437D 35, Ganesh Chandra Avenue 3rd Floor Kolkata Kolkata WB 700013 IN 0 0 0 0 0 0 5667 A company managed operator through income and not The genuineness carry out 16 SUNFLOWER MERCHANTS PVT LTD AALC ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd not returned concern and creditworthiness above transactions 26 SWETAMBARI TRADECOM PVT LTD AAOCS3107R VILLAGE, POST- BAMUNARA, PS-BIDHAN NAGAR DURGAPUR- 713212 DURGAPUR Bardhaman WB 713212 IN NOT FILED 0 0 1150 0 0 NOT FILED A company managed operator through income and not returned concern and creditworthiness above transactions 27 MERCURY DEALMARK PVT LTD AAGCM9943H 44. S.N BANERJEE ROAD BARRACKPO RE KOLKATA Kolkata WB 700120 IN 0 1270 6150 0 0 0 NOT FILED A company managed operator through income and not returned concern and creditworthiness above transactions 28 ROSEMARY VINCOM PVT LTD AAFCR1320Q 29A, WESTON STREET 3RD FLOOR KOLKATA Kolkata WB 700012 IN NOT FILED 0 2320 0 0 0 NOT FILED A company managed operator through income and not The genuineness carry out 29 SWAPANLI TRADE COMMERCE PVT LTD AAECS0181P 29A WESTON STREET 3RD FLOOR, ROOM NO. C5 KOLKATA Kolkata WB 700012 IN 0 2580 0 0 0 0 0 A company income The genuineness carry out 30 BEMISHAL INFRAPROJECTS PVT LTD AAFCB2115B 9/12 LAL BAZAR STREET, 3RD FLOOR KOLKATA Kolkata WB 700001 IN NOT FILED NOT FILED NOT FILED NOT FILED NOT FILED NOT FILED NOT FILED An entity Company traceable filer. The genuineness carry out 31 ETER ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntal identity, creditworthiness transactions 41 HEPTA DEVELOPERS PVT LTD AALCS6206Q 109, VIKAS DEEP BUILDING, DISTRICT CENTER, LAXMI NAGAR DELHI East Delhi DL 110092 IN 0 0 29570 0 0 0 0 A company income not traceable concern and creditworthiness above transactions 42 H B RETAILS PVT LTD AACCH0306F H-96-KH NO- 21/6 ADYAPAK NAGAR NANGLOI North West DL 110041 IN 0 0 0 0 0 101952 57467 A company managed operator through income The genuineness carry out 43 BLUEBELL TRADECOM PVT LTD AAECB4184F 44, S.N.BANERJE E ROAD BARRACKPO RE KOLKATA Kolkata WB 700020 IN NOT FILED 0 3580 5530 0 0 NOT FILED A company managed operator through income and not address post. The genuineness carry out 44 ROSEBUD DEALMARK PRIVATE LIMITED AAFCR1321R 112,JAIGIRGH AT ROAD,POST, THAKURPUK UR NEAR- KAILASHPA L VIDYALAY/ DARGAHA CLUB KOLKATA Kolkata WB 700063 IN NOT FILED 0 3260 0 0 0 NOT FILED A company managed operator through income and departmental identity, creditworthiness transactions 45 AGON REAL ESTATES PVT 9/12 LAL BAZAR NOT FILED NOT FILED NOT FILED NOT FILED NOT FILED NOT FILED NOT FILED An entity off company LTD AALCA0060A STREET, 3RD FLOOR KOLKATA Kolkata WB 700001 IN 46 WESTPORT EXPORT PVT LTD AAACW ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 831K 29A, WESTON STREET, 3RD FLOOR, KOLKATA Kolkata WB 700012 IN NOT FILED 0 700 0 0 0 NOT FILED A company managed operator through income The genuineness carry out 57 BUTTERCUP DEALCOM PVT LTD AAECB4185E 29A, WESTON STREET 3RD FLOOR, ROOM NO. C5 KOLKATA Kolkata WB 700012 IN NOT FILED 0 3240 0 0 0 NOT FILED A company managed operator through income The genuineness carry out 58 SHAKTIMATA DEALCOM PRIVATE LTD AARCS3395J 29A, Weston Street 3rd Floor Kolkata Kolkata WB 700012 IN 0 0 0 0 NOT FILED NOT FILED NOT FILED A company managed operator through income The genuineness carry out carry 59 DHARAPATI COMMERCIAL PRIVATE LIMITED AADCD5668H 71, METCALF STREET 1ST FLOOR KOLKATA Kolkata WB 700013 IN 0 0 0 0 0 0 NOT FILED A company income off and address. genuineness carry out 60 KALPSTHAYI TRADERS PRIVATE LIMITED AAECK0803G 71, METCALF STREET 1ST FLOOR KOLKATA Kolkata WB 700013 IN 0 0 0 0 0 0 NOT FILED A company income off and address. genuineness carry out 61 SWAPANLI TRADE COMMERCE PVT LTD 29A WESTON STREET 3RD FLOOR, ROOM NO. 0 2580 0 0 0 0 0 A company managed operator through AAECS0181P C5 KOLKATA Kolkata WB 700012 IN income The genuineness carry out 62 GIRIBABA TRADING PRIVATE LIMITED ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 32. The fact remains that inducement of funds in M/s Danodia Investments Finance Ltd. was through the unknown sources or by cash deposit or layering of money by 79 entities. The details has been given of 72 Companies out of 79 Companies. It was found that the benami funds was then used to advance the loan and advances to 20 beneficiaries whose detail has also been given by the Department. 33. It was found that total outstanding amount of M/s Danodia Investments Finance Ltd is of Rs. 27,81,47,180/-. The advances or the loan was out of the benami property got in the account of of M/s Danodia Investments Finance Ltd. by way of benami transaction. 34. It was however found that at times the loan was repaid or in part and thereupon advances were given again to Square Four Group Companies or their entities apart from Anita Singhania and other respondents. Thus, the funds in the hands of 20 beneficiaries was out of the benami property in the account of M/s Danodia Investments Finance Ltd. 35. The reference of section 2 (8) defining the benami property would be relevant in this case which includes a property which is subject matter of Benami Transaction and even the proceeds from such prop ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r majority of the non-appellant Companies which includes M/s Danodia Investments Finance Ltd and even for few Square Four Group Companies and other entities. The exception may be for M/s Mahi Trading Private Limited and Micro Network Private Ltd. etc. For Square Four Assets Management, no separate contest has been made, rather the arguments and the representation is common. The affidavits otherwise reverberates the same and it would be relevant that said Mr. Somnath Samanta had filed the affidavit even for Square Four Housing Infrastructure and at the same time for M/s Danodia Investments Finance Ltd. His affidavit is seen even for Square Four Residency Private Limited. 43. The only argument made now be in reference to section 2 (9) (D) defining the benami transaction as amended by the notification of 2016 with effect from 01.11.2016. 44. We find no illegality for invoking section 2 (9) (D) of the provision. It is quoted hereunder :- 2. Definitions. In this Act, unless the context otherwise requires, (9) benami transaction means, (D) a transaction or an arrangement in respect of a property where the person providing the consideration is not traceable or is fictitious; Explanation. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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