Sh. Deepak Vohra vs DCIT/ACIT

“10.

Ground Nos.9 & 10: In these grounds, the appellant has challenged the addition made by the Assessing Officer amounting to Rs.94,93,17,942/-on merits. The appellant has submitted that most of the material used by the Assessing Officer has not been confronted to it and the Show Cause Notice proposing the addition was very cryptic. The appellant further submitted that the statement of the appellant was recorded under duress and the same was retracted after survey proceedings. The appellant further submitted that the Section 69A can be applied only in the case when assessee was found owner of money, bullions and jewellery etc., however, in this case the appellant was not found in the possession of such money or valuables, therefore, essential conditions for making addition u/s. 69A was not available.

10.1

The Assessing Officer has noted in the Assessment Order that the appellant in his statement on oath u/s. 131(1A) recorded on 01.02.2019 had categorically explained his modus operandi to facilitate unaccounted remittances to his supplier based in China and Hongkong for the import of Appeal No. 10006/2013-14 goods in India. It was also recorded by the Assessing Officer that no books of accounts are maintained by the entities controlled by Shri Deepak Vohra. On physical enquiries, the entities were not found to be available at the addresses mentioned in their bank documents. The appellant did not provide name of any ultimate beneficiary of illegal foreign remittances made by him to the supplier in China and Hongkong, nor the source of cash deposits and credit entries made in the accounts of entities controlled by him was explained at the time of recording of his statements or during the assessment proceedings. Accordingly, the amounts found to be credited in the bank accounts of fictitious entities controlled by the appellant were added u/s. 69A of the Act, treating the amounts deposited therein as money in the possession of the appellant.

10.2

I have carefully perused the submission of the appellant, observations of the Assessing Officer and the statement of the appellant recorded on oath on 1st/2nd February, 2019. The relevant part of the statement of the appellant is reproduced as under:-

(iii)

I am also an employee of Tushar Leasing & Investments Pvt. Ltd. Although I don't work for this company, I receive salary of Rs. 1 lakh per month from Tushar Leasing & Investments Pvt. Ltd from the last two years. I receive this salary of Rs. 1 lakh in my saving bank account of HDFC bank. Apart from this, I do not have any other source of income at present. Q6Please provide the details of all the companies/ partnership firm/ proprietorship concern in which you are director/ partner/ proprietor. Ans.I am director in Vohra Imports Pvt. Ltd. and proprietor in M/s Krishna Traders. Apart from these two company/firm, I am not a director/partner/proprietor in any firm. Q7Please provide the detail of all the companies in which you are shareholder. Also explain you current shareholding. Ans.I am a shareholder of only Vohra Imports Pvt. Ltd. My shareholding percentage in Vohra Imports Pvt. Ltd is approx 30%. Q8Please provide the details of all business premise of M/s Vohra Imports Pvt. Ltd. Ans.There is only one premise i.e. some portion of font side of first floor of 4A/36, Tilak Nagar, New Delhi. I pay Rs. 35,000/- per month for the use of this month from the bank account of M/s Vohra Imports Pvt. Ltd. Q9Please provide the details of all business premise of M/s Krishna Enterprises. Ans.M/s Krishna Traders has only one premise i.e. Second Floor, Plot no. K-132, Sector-5, Bhawana, Delhi. No person belonging to M/s Krishna traders work in this premise. I use this premise only when somehow the delivery couldn't be made direct to customer for whom I have imported the goods. Then I store the goods at Plot no. K-132, Sector-5, Bhawana, Delhi till the delivery is made to the customer. I don't pay any rent for the use of this premise. Q. 10Please explain who owns the premise Plot no. K-132, Sector-5, Bhawana, Delhi and why don't you pay rent for the use of this premise? Ans.The premise Plot no. K-132, Sector-5, Bhawana, Delhi is owned by mother Ms. Krishna Kumari. I, on behalf of my mother, always give this premise on rent to some tenant and keep only Second floor of Plot no. K-132, Sector-5, Bhawana, Delhi for my personal use in case of emergency. I don't pay the rent for this premise because this premise belongs to my mother. Q.11Please explain in details the business activity carried out by M/s Vohra Imports Pvt. Ltd. Ans.M/s Vohra Imports Pvt. Ltd. is in the business of import of goods from China and Hongkong for subsequent sale in domestic market. There are 7-8 customer of this company. The main customers are G W Telecom, Smart World Telecom, Global World Telecom and some other entities whose name I can't recall right now. Q. 12Please explain in details about the address, proprietor/partners, nature of business activity etc. of M/s S S International. Also explain in details about your personal relation and relation as an employee/director/shareholder etc. of M/s Vohra Imports Pvt. Ltd. Ans.I had opened bank account in the name of M/s S S International for the purpose of under-invoiced amount remittance to import in M/s Vohra Imports Pvt. Ltd as we import goods in M/s Vohra Import Pvt. Ltd by way of under-invoicing to evade custom duty.. It was a paper firm whose partners were Mr. Charan Singh and Ms. Sagira Parveen. There was no real operative address of M/s S S International as bank account of this paper firm was used for the purpose of remittance only Q. 13As per Bank Account Opening Form of S S International with IndusInd bank, your mobile numbers 8587049937 is registered with bank account. Please explain how and why is your mobile number registered with the bank account of M/s S S International ? Ans.I have given this mobile no. 8587049937 for registration with M/s SS International in IndusInd Bank. This firm was formed by me for the purpose of import in M/s Vohra Imports Pvt. Ltd as we used to import goods from China by way of under invoicing to save custom duty. I had used the bank account of M/s SS International to remit the balance amount (i.e. actual purchase value minus under invoiced amount) to its Chinies seller party. Q.14As per bank account opening form of M/s SS International there were two partners in this firm- Charan Singh And Sagira Parvin. Please give the detail alongwith relation with these two persons. Ans.I had delegated this work to Mr. Neeraj who was earlier working in IndusInd Bank/Axis bank. I never met these two persons as all the paper work for opening the bank account was done by Mr. Neeraj. I had provided mobile 8587049937 for the purpose of control on transactions in the bank account of M/s S S International. Q.15Please give the detail of the premise where books of account of M/s SS International were maintained and being kept. Ans.We had not ever maintained any books of account of M/s SS International as it was only a paper firm for the purpose of remittance of balance amount to our exporters/sellers. The bank account of M/s S S International was used for remittance without any real business in M/s S S International. Q. 16Please explain in details about the address, proprietor/partners, nature of business activity etc. of M/s Sunlight Overseas. Also explain in details about your personal relation and relation as an employee/director/shareholder etc. of M/s Vohra Imports Pvt. Ltd. Ans.I had opened bank account in the name of M/s Sunlight Overseas for the purpose of under-invoiced amount remittance to import in M/s Vohra Imports Pvt. Ltd as we import goods in M/s Vohra Import Pvt. Ltd by way of under-invoicing to evade custom duty.. It was a paper firm whose Proprietor was Ms. Sagira Parveen. There was no real operative address of M/s Sunlight Overseas as bank account of this paper firm was used for the purpose of remittance only. Q. 17As per Bank Account Opening Form of M/s Sunlight Overseas with IndusInd bank, your mobile number 8860254168 is registered with bank account. Please explain how and why is your mobile number registered with the bank account of M/s Sunlight Overseas. Ans.I have given this mobile no. 8860254168 for registration with M/s Sunlight Overseas in IndusInd Bank. This firm was formed by me for the purpose of import in M/s Vohra Imports Pvt. Ltd as we used to import goods from China by way of under invoicing to save custom duty. I had used the bank account of M/s Sunlight Overseas to remit the balance amount (i.e. actual purchase value minus under invoiced amount) to its Clinics seller party. Q.18As per bank account opening form of M/s Moon Light Overseas there were two partners in this firm- Charan Singh And Sagira Parveen. Please give the detail alongwith relation with Shri Charan Singh and Ms. Sagira Parveen. Ans.I had delegated this work to Mr. Neeraj who was earlier working in IndusInd Bank/Axis bank. I never met Ms. Sagira Parveen as all the paper work for opening the bank account was done by Mr. Neeraj. I had provided mobile 8860254168 for the purpose of control on transactions in the bank account of M/s Sunlight Overseas. Q.19Please give the detail of the premise where books of account of M/s Sunlight Overseas were maintained and being kept. Ans.We had not ever maintained any books of account of M/s Sunlight Overseas as it was only a paper firm for the purpose of remittance of balance amount to our exporters/sellers. The bank account of M/s Sunlight Overseas was used for remittance without any real business in M/s Sunlight Overseas. Q. 20Please explain in details about the address, proprietor/partners, nature of business activity etc. of M/s Moon Light Overseas. Also explain in details about your personal relation and relation as an employee/director/shareholder etc. of M/s Vohra Imports Pvt. Ltd. Ans.I had opened bank account in the name of M/s Moon Light Overseas for the purpose of under-invoiced amount remittance to import in M/s Vohra Imports Pvt. Ltd as we import goods in M/s Vohra Import Pvt. Ltd by way of under-invoicing to evade custom duty. It was a paper firm whose Partners were Shri Charan Singh and Sagira Parveen. There was no real operative address of M/s Moon Light Overseas as bank account of this paper firm was used for the purpose of remittance only. Q. 21As per Bank Account Opening Form of M/s Moon Light overseas with HDFC Bank, your mobile number 8376882579 is registered with bank account. Please explain how and why is your mobile number registered with the bank account of M/s Moon Light Overseas. Ans.I have given this mobile no. 8376882579 for registration with M/s Moon Light Overseas in HDFC Bank. This firm was formed by me for the purpose of import in M/s Vohra Imports Pvt. Ltd as we used to import goods from China by way of under invoicing to save custom duty. I had used the bank account of M/s Moon Light Overseas to remit the balance amount (i.e. actual purchase value minus under invoiced amount) to its Chinios seller party. Q.22As per bank account opening form of M/s Moon Light Overseas, Ms. Sagira Parveen was the proprietor of this firm. Please give the detail alongwith relation with Ms. Sagira Parveen. Ans.I had delegated this work to Mr. Neeraj who was earlier working in Indusind Bank/Axis bank. I never met these two persons as all the paper work for opening the bank account was done by Mr. Neeraj. I had provided mobile 8860254168 for the purpose of control on transactions in the bank account of M/s Sunlight Overseas. Q.23Please give the detail of the premise where books of account of M/s Moon Light Overseas were maintained and being kept. Ans.We had not ever maintained any books of account of M/s Moon Light Overseas as it was only a paper firm for the purpose of remittance of balance amount to our exporters/ sellers. The bank account of M/s Moon Light Overseas was used for remittance without any real business in M/s Moon Light Overseas. Q. 24Please explain in details about the address, proprietor/partners, nature of business activity etc. of M/s Jhalak International. Also explain in details about your personal relation and relation as an employee/director/shareholder etc. of M/s Vohra Imports Pvt. Ltd. Ans.I had opened bank account in the name of M/s Jhalak International for the purpose of under-invoiced amount remittance to import in M/s Vohra Imports Pvt. Ltd as we import goods in M/s Vohra Import Pvt. Ltd by way of under-invoicing to evade custom duty. It was a paper firm whose Partners were Shri Charan Singh and Sagira Parveen. There was no real operative address of M/s Jhalak International as bank account of this paper firm was used for the purpose of remittance only. Q.25As per bank account opening form of M/ Jhalak International, Mr. Charan Singh used to operate this bank account. Please give the detail alongwith relation with Mr. Charan Singh. Ans.I had delegated this work to Mr. Neeraj who was earlier working in Indusind Bank/Axis bank. I never met these two persons as all the paper work for opening the bank account was done by Mr. Neeraj. I don't know Mr. Charan Singh. The address of Mr. Charan Singh was bogus and it was just used for the fraudulent purposes. Q.26Please give the detail of the premise where books of account of M/s Jhalak International were maintained and being kept. Ans.We had not ever maintained any books of account of M/s Jhalak International as it was only a paper firm for the purpose of remittance of balance amount to our exporters/ sellers. The bank account of M/s Moon Light Overseas was used for remittance without any real business in M/s Jhalak International. Q. 27Please explain why the ITRs of M/s Jhalak International, M/s S S International, M/s Moon Light Overseas, M/s Sunlight Overseas were not filed. Ans.Sir, these firms were opened only to remit under-invoiced amount to China and Hongkong. So, neither the books of account were maintained nor the Income Tax Return was filed.

The statement is temporarily suspended for rest to the assessee on 01-02-2019 at 05:49 PM.

The statement is resumed on 02-02-2019 at 01:00 PM.

Q. 28 Please give the detail of parties to whom you have sold imported items along with modus operandi of whole transaction i.e. for which you made remittance through bogus entities?

Ans. All the vendors were the same as reflected in my books of account for the relevant year. I am not able to recall the name of any vendor to whom I sold imported item in Financial Year 2012-13, 2013-14 and 2014-15. I will submit the complete detail on 04-02-2019. The modus operandi of whole transaction is as under:

1.

I used to take Potential buyers for a visit to Hongkong/China for selection of items as per their need.

2.

After selection, these potential buyers used to give me order along with advance in the form of cash.

3.

This advance cash was remitted through these dummy/bogus entities to China/Hongkong.

4.

The balance amount was then remitted through bank account of M/s Vohra Imports Pvt. Ltd. This was also the invoiced price for the purpose of imposing custom duty. Hence, we pay custom duty only on the invoiced price of imported goods i.e not on the purchase amount remitted through dummy/bogus entities.

5.

The respective consignment when received from Clearing House Agent (CHA) was handed over to the respective buyer.

6.

From this whole Import process, the total saving/ commission income for me / Ms. Vohra Imports Pvt. Ltd. was Rs. 75,000/- per container and Rs. 50,000/- per consignment. I receive this saving/ commission income in cash through respective vendors/ purchase parties of M/s Vohra Imports Pvt. Ltd/ M/s Krishna Traders. Q 29Please give the detail of entities through which you are sending under-invoiced amount to China/ Hongkong for import these days. Also give the detail of persons with complete address who are maintaining the record of such unaccounted remittances. Ans.Now a days, I remit unaccounted purchase value through different Hawala operators of Chandani Chowk, Delhi at the rate of 1-1.5%. I don't know the name and address of these hawala operators as they operate very discreetly. I have only one contact number of such hawala operator and everytime he sends different person/agent for collection of cash. However, after implementation of GST, the difference of actual purchase minus invoice value has reduced significantly. I do keep the detail of such kuchcha/ unaccounted cash in kachchi parchies or in pdf/excel in our office computer till the date of delivery of the respective consignment. After the receiving the consignment, we destroy these kachchi parchies or pdf/ excel sheets. Q30Please provide the contact number of the hawala operator through which you send the unaccounted cash to China/Hongkong. Ans.I don't have his contact number now, because I have lost my mobile in which the the contact number of the hawala operator was saved. Q31Please provide the name and designation of all the employees of M/s Vohra Imports Pvt. Ltd. Ans.There are only two employees working in M/s Vohra Imports Pvt. Ltd. Mr. Veer Abhimanyu works as accountant for M/s Vohra Imports Pvt. Ltd, as well as for M/s Tushar Leasing and Investment Pvt. Ltd. There is one more employee of M/s Vohra Imports Pvt. Ltd, Mr. Dileep Kumar, who works as driver of director Shri Deepak Vohra and as field agent & loader. Q32Please provide the detail of all premises/ godown where the imported items are being kept. Ans.We don't have any need for godown to store imported items as we work as commission agent for import. The imported goods are directly sent to the respective buyers who have already placed the order for the same imported goods. Q33Please provide the complete detail of your work profile in M/s Vohra Imports Pvt.

10.3

On perusal of the statement of Shri Deepak Vohra, it is very clear that the entities M/s. S.S. International, M/s. Sunlight Overseas, M/s. Moonlight Overseas and M/s. Jhalak International were managed and controlled by him, therefore, he was liable to explain all the credit entries including the cash deposits made in the bank accounts of these entities directly or through other fictitious companies. The illustrations made by the Assessing Officer in the Assessment Order in which the cash trails were also mentioned by her further establishes that the appellant was routing unaccounted cash in these 4 companies through various other paper companies as well. It is also a matter of record that these entities were not filing any return of income and were also not maintaining any books of account. They were simply being used for the rotation of cash and ultimate remittances to the foreign countries for import of goods at under invoiced value. The appellant has though claimed in his statement that he used to get commission in the range to Rs.50,000/- to Rs.75,000/- per container in cash but he had failed to identify any importer who was being facilitated by him by depositing cash in the accounts of his fictitious entities and subsequent remittance to the Chinese / Hongkong suppliers. Further, no trail of cash has been established with ultimate beneficiaries (importers). Accordingly, I agree that the finding of the Assessing Officer that Shri Deepak Vohra being the ultimate beneficiary of the credit entries in the account of the entities controlled by him shall be assessed for such cash/money found to be credited in the bank account of these entities. The contention of the appellant that section 69A is not applicable in his case has also been carefully perused and found to be not tenable. The appellant himself had admitted that he had opened bank accounts in the name of above-mentioned paper entities for the purpose of remittances of under invoiced amount of imported goods to the suppliers and that bank accounts were solely and exclusively managed and controlled by him. The cash was being deposited in these accounts or the money was brought in these accounts by depositing cash in other paper companies. Accordingly, I find the appellant was the owner of all monies credited in the accounts of the four paper entities and the source of amounts were not explained by him to the satisfaction of AO. Therefore, all the essential requirements of section 69A is met in this case.

10.4

Further, contention of the appellant that his statement recorded on 01/02.02.2019 u/s 131(1A), relied upon by the AO, was not provided to it, therefore the principles of natural justice were not followed in his case, has no merit. Firstly, because the statement was given by appellant himself on oath in great details and he was in the knowledge of all the facts and impounded evidences confronted to him and the statements / explanations made/furnished by him before the DDIT. Secondly AO offered to provide the copy of statement as per official procedure vide her letter dated 28.03.2022. Accordingly, I find that the appellant was not serious to obtain his statement or other impounded material from Wing after survey and has willfully not collected the statement after it was recorded on 01.02.2019 either from the DDIT or AO, and made this point- a matter of contention for the sake of it.

10.5

The appellant submitted that statement dated 01.02.2019 was retracted. However, no evidence in this regard was submitted by the appellant during the appellate proceeding. The appellant has not submitted any retraction letter and has also not submitted any evidence to substantiate his contention that the statement was recorded under any pressure or duress. It is noted that the statement was recorded in the office of the DDIT after the survey operation was over. The appellant had access to superior authorities sitting in the same office premise in case of any force or pressure was applied on him to extract the statement. He was confronted with various incriminating materials impounded during the survey and the appellant made statements after due appreciation of materials gathered by the Department. The appellant in his own handwriting has recorded at the end of the statement that the statement was given without any fear, force, threat, inducement or coercion. The appellant has neither made any complaint for any mental duress and neither provided any material evidence to show that facts recorded in his statements were not true. Accordingly, I find that the statement of the appellant is a credible evidence against the appellant which is also supported by other evidences brought on record by the AO. Reliance is placed on the judgements of Hon'ble Delhi High Court in the case of CIT Vs S M Agarwal, 93 Taxmann.com 247 and Hon'ble Supreme Court in Pullan-gode Rubber Produce Co. Ltd. v. State of Kerala, (1973) 91 ITR 18.

10.6

In view of the facts stated above, I find that the statement of the appellant and other evidences relied upon by the AO are adequate to prove that the entities namely M/s. S.S. International, M/s. Sunlight Overseas, M/s. Moonlight Overseas and M/s. Jhalak International were managed and controlled by him and money found to be deposited in the accounts of these entities has not been explained. Therefore, the addition made by the Assessing Officer u/s 69A of the Act is sustained.”