2025 (8) TMI 272 - AT - Benami Property

Revenue proves benami property transfer under SAFEMA, rejecting no-consideration claim by appellant

The AT under SAFEMA held that the revenue successfully proved the benami nature of the property transaction, rejecting the appellant's contention that no ... Benami Property Transactions - onus to prove - what evidence to demonstrate that the amount involved in the benami transaction was out of known sources of income - The Counsel for the appellant made a specific reference to Section 2(9)(A)(a)and (c) of the PBPT Act as amended by the Amending Act of 2016. It is to emphasize that there is no element of transfer of consideration to benamidar for future benefit of the beneficial owner. In fact, respondent failed to prove the case despite the burden of proof on them to show a case of benami transaction. HELD THAT:- We find that the respondent (revenue) could produce the material to prove the case of benami transaction and thus the judgment referred by the appellant in the case of G. Bahadur [2018 (12) TMI 905 - APPELLATE TRIBUNAL FOR PROHIBITION OF BENAMI PROPERTY TRANSACTIONS ACT, NEW DELHI] would have no application in the present appeals. We, rather, find it is a case where beneficial owner passed on the money to benamidar for future benefit which in fact has taken place in the case with the receipt of the money by the appellants from the two companies named above with whom the money was deposited by the benamidar after its receipt from the appellant. Decided against the assessee. ISSUES: Whether the transaction involving transfer of money to a benamidar constitutes a benami transaction under the Prohibition of Benami Property Transactions Act, 1988 (PBPT Act), as amended.Whether the burden of proof to establish a benami transaction was discharged by the respondent authorities.Whether the amount involved, claimed to be out of disclosed income, can be subjected to attachment as benami property.Whether the element of 'transfer of consideration to benamidar for future benefit of the beneficial owner' as defined under Section 2(9)(A)(a) and (c) of the PBPT Act is satisfied. RULINGS / HOLDINGS: The Tribunal held that the transfer of Rs. 25,00,000/- each to the benamidar, who subsequently deposited the money into bank accounts of two companies which then transferred the amounts back to the appellants, 'is taken to satisfy the condition of future benefit,' thereby constituting a benami transaction.The respondent successfully discharged the burden of proof by producing material evidence demonstrating the existence of a benami transaction, rendering the appellant's reliance on precedent inapplicable.The claim that the amount was out of disclosed income from tuition was unsupported by evidence such as bank statements or income tax returns, and thus cannot exempt the amount from being treated as benami property.The element of 'transfer of consideration to benamidar for future benefit of the beneficial owner' under Section 2(9)(A)(a) and (c) of the PBPT Act is satisfied as the money was passed on to the benamidar with the understanding and actual result of future benefit to the appellants. RATIONALE: The Tribunal applied the legal framework under the Prohibition of Benami Property Transactions Act, 1988, particularly the definitions and conditions introduced by the 2016 Amendment Act, focusing on Section 2(9)(A)(a) and (c) concerning 'benami transaction' and 'future benefit.'The Tribunal emphasized the necessity for the party alleging a benami transaction to prove it, and found that the respondent met this burden by establishing a chain of transactions evidencing transfer for future benefit.The Tribunal rejected unsupported assertions of income source, requiring objective evidence such as bank statements or income tax returns to substantiate claims of disclosed income.No dissent or doctrinal shift was noted; the decision reaffirmed established principles regarding the burden of proof and the interpretation of benami transactions under the PBPT Act.