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TMI Blog2024 (10) TMI 298X X X X Extracts X X X X X X X X Extracts X X X X ..... t up by the Appellant is that he was engaged in agricultural activities and running the business of poultry farm. He was working as part time employee also with one M.R. Traders in April 2017. A search was conducted in the business premises of M/s M.R. Traders by Income Tax Department. During the search, the statement of the appellant was recorded. He was asked about the 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.Based on 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 ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... try business of the appellant. A certificate dated 28.06.2007 was further submitted to indicate allowable capacity of 2,000 boiler chicken in the poultry farm. The certificate aforesaid was given by the veterinary surgeon. 10.The appellant had even produced a sale deed dated 10.10.2013 for purchase of land for sum of Rs.3,50,000/-. The Bank Statements were also 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 transac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 14.It is a fact that a search was conducted by the Income Tax Dept. on M/s M.R. Traders u/s 132(1) of the Income Tax Act. The statements were recorded u/s 132(4) of the Income Tax Act during search. In the statement, the appellant had accepted purchase of the assets which includes the chit funds by Rajesh in his name. Though, subsequently it was stated that statement was wrongly recorded. Before 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 Yelapa 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 s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as been settled by Bombay High Court where a similar argument was made that the sworn statement u/s 108 of the Custom Act cannot be relied for any proceedings under different statute. The Bombay High Court in the case of Vinod M. Chitalia Vs. Union of India in Fera Appeal No.8 of 2012 held that the statement recorded u/s 108 of Custom Act can be relied in other adjudicating proceedings. 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ubmitted. It is said to be based on the enquiry and not in reference to revenue record. VEO is custodian of revenue record and could have certified the agricultural activities on the land, but the certificate issued by him was based on the information and not the revenue record. Thus, the Adjudicating Authority rightly clarified the position aforesaid to hold it to be case of benami transaction. 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 analysed 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 m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to "Federal Bank OD Replayed" account. But, on perusal of the bank account copy in respect of the benamidar OD account number 1399 with federal Bank, Karinkalathanni branch, it was found that an amount of Rs.4,44,216/- was deposited in that account as repayment during the FY 2017-18. (e)As the amounts deposited in the bank accounts are not reflected in the CFS, the same is liable to be rejected. (f)Benamidar is an employee of the beneficial owner and has deposed in his own sworn statement dated 26.09.2017 that he is receiving a monthly salary income of Rs.15,000/- per month from the Beneficial Owner. His salary income has not been shown in the CFS filed by him." The appellant has taken a plea that income from the agriculture and poultry was not such which required Income Tax Return. Argument aforesaid was also analysed by the Adjudicating Authority and found that as per the deposed statement on 26.09.2017 the appellant has shown his income of Rs.15,000/- per month from salary and Rs.2,00,000/- per annum from poultry business. Putting together these amounts, his income other than agriculture activity was well above taxable limits, yet no income tax return was submitted. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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