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TMI Blog2025 (3) TMI 281X X X X Extracts X X X X X X X X Extracts X X X X ..... properties comprising of total cash of Rs. 98,93,34,581/- and total gold bullion weighing 166.27 kg are the Benami Property under Section 2(8) of the PBPTA. 3. Ld. Counsel for the Appellant pleaded that Ld. Adjudicating Authority erred in not taking into consideration that post the demonetization of currency notes of denomination of Rs. 500 & Rs. 1000 on 08.11.2016, aforementioned amount of cash comprising of both new and old denominations along with gold bullions were recovered from the Respondent Firm on 08.12.2016. 4. Ld. Counsel pleaded that the Respondent has failed to demonstrate the source of recovered cash and gold bullion. Ld. Counsel argued that the Respondent did not bring on record any evidence, documentary or otherwise, which could explain the large amount of cash and gold bullion recovered. 5. Ld. Counsel argued that Ld. Adjudicating Authority did not take into consideration that the Respondent Firm had failed to maintain regular books of accounts and engage a regular accountant. Ld. Adjudicating Authority further failed to take into consideration the detailed parallel cash books which recorded the unaccounted cash generated out of the business of the Respondent F ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l for the Appellant argued that the partners initially stated that the entire seized cash and gold bullion belonged to the Respondent Firm although without having given any basis to establish its source that the same were generated out of sand sales. The Initiating Officer observed that the unaccounted cash sales of the Respondent Firm were recorded in detail in the parallel cash book maintained by Shri S Nagarathinan. Ld. Counsel contended that the retractions of the statements made earlier by the partners and the non-reporting of the seized cash and gold bullion in the parallel set of accounts provide the basis for holding that the excess cash and gold bullion seized to the tune of Rs. 98,93,34,581/- and 166.27 kg respectively was beneficially owned by a third party/parties who remain unknown to the Appellant. The Respondent Firm, M/s SRS Mining was holding the same in the capacity of a benamidar. 9. Ld. Counsel pleaded that the observations and findings of Ld. Adjudicating Authority, are dehors of Section 2(9)(D) of the PBPTA. The reasoning of Ld. Adjudicating Authority is perverse to the provisions of Section 2(9)(D) of the PBPTA since the Appellant had failed to prove that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssued by the Income Tax Department for the payment of the tax u/s 140 of the Income Tax Act, 1961. Every assessee is bound to pay the self- assessment tax as declared by him at the time of filing of the ITR. The Assessing Officer, Income Tax Department has not assessed the ITR of the respondent and the demand raised is not the demand after assessment but of the self-assessment as declared by the Respondent itself. The demand letter issued by the Assessing Officer to the Respondent would not tantamount to making the seized cash and gold bullion to be of the Respondent. The benami property would still remain to be a benami property. 13. Ld. Counsel pleaded that the relied upon documents had been furnished to the noticees of the Show Cause Notice, including the relevant extracts of the parallel accounts as maintained in the Diary. Ld. Counsel for the Appellant pleaded to allow the appeal and set aside the Order of Ld. Adjudicating Authority whereby, the Provisional Attachment Order dated 27.09.2017 was not confirmed. 14. The Respondent did not make an appearance for the final hearings. We are constrained to limit the arguments to the Written Reply dated 14.08.2019 filed by the Respo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icial Owner, who is not traceable or fictitious? (b) Whether disclosure and assessment of benami property under the Income Tax Act, 1961, in the hands of the Benamidar in whose possession it is found, would remove the taint of it being Benami? (c) Under what circumstances will the statements initially made and subsequently retracted will be admitted or rejected as evidence for holding the property as Benami? 19. The very purpose of inserting the Sub-Section 2(9)(D) of PBPTA is to comprehensively cover within the meaning of Benami Transaction, a transaction or an arrangement in respect of a property where the person providing the consideration is not traceable or is fictitious. In contrast the provisions of Sub-Section 2(9)(A) is as follows: "2 (9) "benami transaction" means,- (A) a transaction or an arrangement- (a) where a property is transferred to, or is held by, a person, and the consideration for such property has been provided, or paid by, another person; and (b) the property is held for the immediate or future benefit, direct or indirect, of the person who has provided the consideration, except when the property is held by- (i) a Karta, or a member of a Hindu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bullion, such cash and gold bullion being in excess of what had been „entered‟ into the parallel set of accounts a day before the recovery and the seizure having been made in a month's time of demonetization reflect the attempt of the Respondent to protect the interest of unknown parties. Even the meaning of Beneficial Owner under Sub-Section 2(12) of the PBPTA does not impose the additional burden to show with proofs that such properties were held for the benefit of untraceable Beneficial Owner(s). The circumstantial evidences as emanating from the sequence of events are sufficient to hold that the impugned movable properties were not held for the benefit of Benamidar. 22. Based on the perusal of the documents, we observe that the ITRs for AYs 2016-17 & 2017-18 were filed on 04.08.2017, that is subsequently to the search and seizure dated 08.12.2016 and the issuance of Show Cause Notice under Section 24(1) of the PBPTA dated 29.06.2017.It is obvious that the Respondent Firm opted for filing returns for two Assessment Years on the same date so as to report the recoveries of huge amount of cash and gold bullion as its income, so as to escape the rigours of the PBPTA. I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the self-assessment as declared by the Respondent itself. We therefore observe from the Judgment (supra) and the facts of the case that the reliance placed by Ld. Adjudicating Authority on the demand notice raised under the Income Tax Act, 1961 would make the provisions of the PBPTA otiose and redundant, since, every detection under the PBPTA can be nullified by opting for the assessments under the Income Tax Act, 1961. 24. The circumstances under which the statement or its retraction is to be accepted or rejected need to be evaluated by the Tribunal/ Court. The Hon'ble Supreme Court in a FERA, 1973matter of Vinod Solanki Vs Union of India the judgment dated 18.12.2008 [(2008) 16 Supreme Court Cases 537]has given useful pointers. The Hon'ble Court has examined in paragraph 15 of the judgment; "15. The questions which would arise for our consideration are: (1) whether the appellant had made bald statement at the time of retraction alleging threat and coercion so as to shift the burden of proof from him to the Enforcement Directorate; and (2) whether consolidated penalty could have been imposed only on the basis of such retracted confession". 25. The Hon'ble Court has gone on to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... overlooked. The seizure was made by the Appellant only of that amount of cash and the quantum of gold which was not even explained in the parallel books of account, besides, no mention thereof in the regular books of account. The reason stated by the Respondent that Shri S Nagarathinam could not have kept record of these recoveries because the Respondent undertook sand sale at many places cannot cut much ice in view of the Firm having established businesses which how could not even keep regular accounts. It is not convincing that the Firm was clueless of its business activities so as to maintain its record even in informal accounting. It cannot also be ignored that the detection and the recovery of unaccounted cash and gold bullion happened within a months‟ time of the demonetization. The rush by the Respondent as reflected in the filing of the ITRs for the seizures effected under the PBPTA on the same date for the AYs 2016-17 & 2017-18 cannot but show their attempt to bypass the provisions of the PBPTA. It, therefore, appears to us that the seized cash and gold bullion are Benami Properties for which the Respondent lent its name rather disclose the name of the Beneficial Own ..... X X X X Extracts X X X X X X X X Extracts X X X X
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