Shree Nakoda Gold Vs Initiating Officer (Appellate Tribunal Under SAFEMA Delhi)
SAFEMA Tribunal Upholds Benami Attachment in Demonetisation Gold Trade Case; Mere Invoices Cannot Rebut Evidence of Accommodation Entries
The Appellate Tribunal under SAFEMA dismissed the appeal filed by M/s Shree Nakoda Gold, upholding the provisional attachment of ₹39.50 lakh under the Prohibition of Benami Property Transactions Act, 1988 (PBPT Act). The case arose from the deposit of demonetised currency into bank accounts controlled by Asit B. Doshi, who admitted in his statement that he received cash through an intermediary, retained a 5% commission, and routed the balance to the appellant through RTGS. The appellant claimed the RTGS receipts represented genuine sale proceeds of gold bullion supported by invoices, stock records, VAT returns and bank statements.
The Tribunal held that the surrounding circumstances strongly supported the allegation of a benami accommodation entry. It noted that the RTGS transfers from entities controlled by Asit Doshi immediately followed the deposit of demonetised cash, the appellant had no prior business relationship with those entities, and the explanation based on sale invoices was unsupported by any independent evidence. The Tribunal also observed that the sale invoices reflected gold rates lower than prevailing market rates and involved unusual quantities, lending support to the Revenue’s case that the documentation had been created to give an appearance of genuine commercial transactions.
Rejecting the plea of violation of natural justice, the Tribunal held that denial of cross-examination did not vitiate the proceedings. It noted that Mangilal’s statement had never been recorded, while Asit Doshi had been summoned for cross-examination but failed to appear. Relying on decisions of the Supreme Court in Kanungo & Co., Dharampal Satyapal Ltd., Telestar Travels Pvt. Ltd., and State of U.P. v. Sudhir Kumar Singh, the Tribunal reiterated that cross-examination is not an inflexible requirement, and an order cannot be set aside merely for its denial unless actual prejudice is demonstrated. Finding no such prejudice and concluding that the attachment was supported by the evidence on record, the Tribunal dismissed the appeal and upheld the benami attachment.
Cases Discussed
- State of U.P. v. Sudhir Kumar Singh (SC), (2021) 19 SCC 706
- Dharampal Satyapal Ltd. v. CCE (SC), (2015) 8 SCC 519 : (2015) 33 GSTR 1 : 2015 SCC OnLine SC 489
- M/s Telestar Travels Pvt. Ltd. vs. Special Director of Enforcement (SC), 2013 AIR SCW 1304
- Kanungo & Company vs. Collector of Customs & Ors. (SC), AIR 1972 SC 2136
FULL TEXT OF THE JUDGMENT APPELLATE TRIBUNAL UNDER SAFEMA AT NEW DELHI
This Order disposes of the Appeal No. FPA-PBPT-170/MUM/ 2018 filed by M/s Shree Nakoda Gold, against the Order dated 27.09.2018 (Impugned Order) passed by the Ld. Adjudicating Authority under Section 26 (3) of the Prohibition of Benami Property Transaction Act, 1988 (PBPTA), New Delhi in Reference Nos. R-149/2017 whereby the Ld. Adjudicating Authority (AA) confirmed the Provisional Attachment Order dated 19.06.2017 (PAO) passed by the Initiating Officer, BPU, Mumbai under Section 24 (3) of PBPTA. Rs. 39,50,000/- in the accounts in the Axis Bank Fort Branch, Mumbai and Bank of Maharashtra, Parel Branch, Mumbai, in the name of M/s Shree Nakoda Gold were provisionally attached.
