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TMI Blog2024 (9) TMI 717X X X X Extracts X X X X X X X X Extracts X X X X ..... would be necessity to apply the process given under CrPC and even under Evidence Act which is not mandated for the proceedings by the Revenue for attachment or for imposition of penalty. In the light of the aforesaid, we are unable to accept first argument raised by the appellant. Since we have decided the first issue against the appellant and thereby sworn statement u/s 132(4) of Income Tax Act can be relied even in the proceedings under the Act of 1988. The respondents were not under obligation to record separate statement by holding enquiry. In fact, the Initiating Officer had taken up issues while passing the order and appeal before the Adjudicating Authority, all the issues raised by the Appellants were threshold decided. The argument of the Counsel for the Appellant is that even the chits in the name of the Appellant was out of the sources disclosed by him while it is a fact that in the statement recorded u/s 132(4) of the Income Tax Act it was admitted that chit fund was operated at the instance of Rajesh of M.R. Traders. The arguments have been raised against the sworn statement of the Appellant and others to prove the case. It is apart from the fact that the appellant fail ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... investment made by M/s M.R. Traders in the name of Appellant. 3. In the statement, the appellant gave details of the vehicle and the properties in his name. It was Tata 407 Vehicle apart from one Bolero Pickup Vehicle. He was also having a motorcycle in his name. Apart from that, two chit funds and the land. 4. On the basis of the sworn statement given by the appellant u/s 132(4) of the Income Tax Act, the respondent initiated proceedings under the Act of 1988 by issuing notice dated 18.09.2018 u/s 24(1) of the Act of 1988. The Appellant was asked to give the source of funds for purchase of assets in his name. In response to the show cause notice, the appellant had submitted documents to show the source of income out of agricultural activities and the poultry farm. The certificate issued by the Village Extension Officer (VEO) on 10.10.2018 was sufficient to fortify the agricultural land in the name of the appellant and his poultry business. All the properties in the name of the appellant were out of the savings, loan and the income from agricultural apart from poultry farm. However, ignoring the aforesaid, all the properties in the hands of the appellant were taken to be Benami af ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... submitted apart from the registration certificate, tax invoice and Sundaram Finance Loan Account Statement for purchase of vehicle but has been ignored by the respondent and, accordingly, the impugned order deserves to be set aside. 11. The appeal has been contested by the respondent. It is submitted that all the issues raised by the appellant have been dealt with by the Adjudicating Authority for confirmation of the order dated 14.12.2018 passed by the Initiating Officer. Ld. Counsel for the respondent has referred to the documents on record apart from the pleadings. We would be referring to those documents while dealing with the issues raised by the appellant for challenge of the impugned order. 12. Facts available on record shows following properties in the name of the appellant which are said to be out of benami transaction. It is reflected with reference number pursuant to which proceedings were initiated:- In Reference No.1117/2018 TATA 407 Vehicle [2016] [Reg. No.KL 50 E 3977] purchased on 23.01.2016 in the name of Sri. K. R. Radhakrishnan by Sri. Melapurakkal Rajesh through the funds of M/s. M R Traders [As deposed by Sri K. R. Radhakrishnan in his sworn statement dated 26. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re we refer to the statements recorded u/s 132(4) of the Income Tax Act, it would be necessary to deal with the legal issue raised by the appellant. 15. It is submitted that sworn statement u/s 132(4) could not have been relied in the proceedings under the Act of 1988. It is also that no independent enquiry was conducted by the respondents to hold it to be a case of Benami transaction. Ld. Counsel for the Appellant has contested the legal issue and referred to a judgement of Andhra Pradesh High Court in the case of Gajam China Yallappa Vs. Income Tax Officer in ITTA No.268 of 2003 passed on 06.11.2014. The following para of the judgment is quoted for ready reference: The Act empowers the Assessing Officers or other authorities to record the statements of the assesses, whenever a survey or search is conducted under the relevant provisions of law. The statements so recorded are referable to Section 132 of the Act. Sub-section 4 thereof enables the authorities not only to reply upon the statement in the concerned proceedings but also in other proceedings that are pending, by the time the statement was recorded. If the statement is not retracted, the same can constitute the sole basis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . The relevant para of the judgment is quoted as under: The statements made to DRI can be used in the present proceeding as they pertain to the same transaction. It must be borne in mind 8 (Paragraph 20 page 269 of the Appeal Memo) 9 (See para 16 at page 240 of the Appeal Memo) 10 (Page 208 of the Appeal Memo) 11 (at para 21 at page 270 of the Appeal Memo) that under Section 108 of the Customs Act, 1962 the statements recorded before the DRI are deemed to be in a judicial proceeding within the meaning of Section 193 and 228 of the Indian Penal Code, 1860. The solemnity and sanctity attached to the statement made in a judicial proceeding therefore attaches to the statement made under the Customs Act to the DRI. Therefore, there is no prohibition in relying upon statements made under the Customs Act 1962 for the purposes of the adjudication proceeding under the FEMA, more so when reliance is placed upon documents to the complaint made to the Adjudicating Authority. 17. At this stage, it is necessary to clarify that the finding recorded by us may not apply in trial of the criminal case or a prosecution case where the prosecution agency need to prove its case by leading evidence in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on. 20. It is also that the statement of Rajesh and other were relevant to substantiate the fact that chits were out of benami transaction. The appellant, however, referred to the Bank Account in South Indian Bank to fortify his income and source for putting money in chits. The aforesaid was also analyzed and found that it was out of cheque and were from Fortune Wheat Products, which is a business concern of Mr. Rajesh. It is necessary to indicate that other than the certificate and few documents, the appellants failed to produce any material to substantiate his plea of earning of money out of poultry or agriculture. At this stage, it would further be necessary to indicate that the maturity amount out of the chit has also been taken note of by the Adjudicating Authority. It was found that the maturity amount of 1,25,000/- per annum for the chit of 25,00,000/- an amount of 23,65,625/- was credited to benamidars Account No.167443 with Federal Bank. Out of the aforesaid amount of Rs. 23,64,000/- were transferred to business concern of Mr. Rajesh, which are as under :- Sl. No. Name of Concern Date of Transfer Amount (Rs.) 1 Mithra Enterprises 17.05.2017 5,00,000 2 M R Agencies 17.05.20 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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