Provisional attachment of unaccounted cash upheld as benami property under Section 2(9)(D) of the PBPT Act

The AT upheld the provisional attachment of cash seized from the appellant, ruling that unaccounted cash qualifies as movable property under the PBPT Act and constitutes benami property when the source is unexplained. The tribunal rejected the appellant's claim that three parties are required for a benami transaction, affirming that only a benamidar and beneficial owner are necessary. The appellant's failure to provide credible evidence explaining the source of the cash and reliance on inconsistent statements led to the conclusion that Section 2(9)(D) of the Act applies. Filing ITRs did not exempt the appellant from PBPT proceedings, as the source of the money remained undisclosed. The attachment and confiscation under the PBPT Act were therefore upheld against the appellant.

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ISSUES:

Whether cash constitutes "property" under the Prohibition of Benami Property Transactions Act, 1988 (PBPT Act)?Whether a benami transaction requires three parties or only two parties (benamidar and beneficial owner)?Whether Section 2(9)(D) of the PBPT Act can be invoked in the absence of any investigation regarding the ownership of cash'Whether the provisions of the PBPT Act are attracted when the person in possession of cash has filed Income Tax Returns (ITR) declaring the amount?

RULINGS / HOLDINGS:

Cash is covered within the definition of tangible movable property under Section 2(26) of the PBPT Act, and unaccounted cash with unexplained source falls within the definition of "benami property" as per Section 2(8).A benami transaction requires only two parties: the "benamidar" and the "beneficial owner," as defined under Sections 2(10) and 2(12) respectively; the contention that three parties are required is without merit.Section 2(9)(D) can be invoked even in absence of a full investigation into ownership when a person is found in possession of cash without valid documents or evidence of source, especially where the person's own statement indicates the source is untraceable or fictitious.Filing of Income Tax Returns after seizure does not preclude the application of the PBPT Act; the Act operates independently and additionally to the Income Tax Act, and unexplained cash remains liable under the PBPT Act despite tax declarations.

RATIONALE:

The Court applied the definitions in the PBPT Act, particularly Sections 2(8), 2(9)(D), 2(10), 2(12), and 2(26), interpreting "property" broadly to include tangible movable assets such as cash, and recognizing that "benami property" includes proceeds from such property.The Court rejected the argument that a benami transaction requires three parties, relying on statutory definitions which only require a benamidar and a beneficial owner.The Court relied on the recorded statement under Section 131 of the Income Tax Act where the person in possession of cash admitted inability to explain the source, implicating Section 2(9)(D) which covers transactions where the consideration provider is "not traceable" or "fictitious."The Court emphasized that the PBPT Act is an anti-black money measure distinct from the Income Tax Act, as reflected in legislative intent and Section 60 of the PBPT Act, which states it is in addition to other laws and not in derogation of them.The Court noted that filing ITRs post-seizure is an afterthought and does not negate the applicability of the PBPT Act, especially where the source of the cash remains unexplained and uncorroborated.

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