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of <h1>Property purchases in another person's name with buyer funding: treated as benami u/s2(9)(A), attachment upheld</h1> Whether the provisional attachment was sustainable by treating the properties as 'benami property' under s.2(9)(A) of the 1988 Act (as amended in 2016) ... Benami transaction - Provisional attachment - search and seizure u/s 132 - acquire the land - satisfaction of the ingredients of section 2(9)(A) - want of proper notice under section 24(1) and section 24(3) - All the landed properties were acquired much prior to the amendment in the Act of 1988 in 2016 - HELD THAT:- The fact on record rather shows the admission of the appellants for purchase of landed properties in the name of Gagan Bihari Malik for which consideration was passed on by the beneficial owner Soumendra Kumar Mohanty, the proprietor of M/s SM Consultants The appellants however failed to produce document for transfer of the landed properties in favour of M/s Posco India Limited and therefore argument in regard to the agreement between M/s S.M. Consultants and M/s Posco India also remained for the sake of it. We find satisfaction of the ingredients of section 2(9)(A) of the Act of 1988 as amended by the Amending Act 2016. The amendment should operate prospectively and therefore the respondents wrongly invoked section 2(9)(A) for causing provisional attachment. It was further submitted that even if section 2(9)(A) is made applicable retrospectively, then also its need satisfaction to the condition of transfer or/and “held”. The condition of transfer got satisfied prior to the amendment. Thus, it cannot be invoked and if it is, governed by applying word “held”, it could not have been applied in a case of transfer earlier. Both the words “transfer” and “held” can not apply together. It is in a given circumstances, when the amendment is not given retrospective effect, however the position of law is yet to be settled by the Apex Court after recall of the judgement in the case of Union of India & Anr. v/s M/s. Ganpati Dealcom Pvt. Ltd. [2022 (8) TMI 1047 - SUPREME COURT] The appellants have otherwise failed to show that on purchase of property in the name of benamidar, it was to be transferred to the State of Orissa and even if that is so, the appellants could not explain why the property was purchased in the name of Gagan Bihari Mallik having no means to pay the consideration. Thus, we don't find any reason to cause interference in the impugned order. Appeals accordingly fail and are dismissed. Issues: (i) Whether the landed properties in the name of Gagan Bihari Mallik constitute benami transactions and whether the appellants have disproved the same; (ii) Whether the amended definition of 'benami transaction' under section 2(9A) of the Prohibition of Benami Property Transactions Act, 1988 (as amended by the Benami Transactions (Prohibition) Amendment Act, 2016) applies to properties transferred before the amendment but held by the benamidar after the amendment.Issue (i): Whether the properties acquired in the name of Gagan Bihari Mallik are benami properties.Analysis: The record shows documents of 61 landed properties found during search at the residence of the alleged beneficial owner; the benamidar lacked means to acquire properties worth Rs. 66,57,140 and first filed ITR only for AY 2019-20; consideration for purchases traced to the beneficial owner. The Tribunal evaluated appellants' oral claim of intended transfer to the State of Orissa and absence of documentary proof establishing independent source of funds for the benamidar.Conclusion: The Tribunal concluded that ingredients of a benami transaction are satisfied and the properties are benami in favour of the respondent (beneficial owner).Issue (ii): Whether the Amending Act, 2016 (section 2(9A)) applies to properties transferred before the amendment but held by the benamidar after the amendment.Analysis: The Tribunal relied on its interpretation that the amended definition covers not only transfers but also holding of properties; where a transfer occurred prior to the amendment but the benamidar continues to hold the property after the amendment, the amended definition applies. The Tribunal referenced earlier Tribunal decisions and noted the law on retrospective effect and related Apex Court proceedings, concluding the amended provision governs holdings continuing after amendment.Conclusion: The Tribunal held that section 2(9A) as amended applies where the benamidar continues to hold the property after the amendment, and therefore the amended definition was properly invoked in this case.Final Conclusion: The Tribunal found no merit in the appellants' challenges and dismissed the appeals, thereby upholding the adjudicating authority's confirmation of provisional attachment on the ground of benami transaction.Ratio Decidendi: Where a property transfer predates the 2016 amendment but the benamidar continues to hold the property after the amendment, the amended definition of 'benami transaction' applies and supports provisional attachment if other ingredients of benami are satisfied.
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