2026 (2) TMI 57 - AT - Benami Property

Benami property transaction involving disputed land: tribunal confirms money-trail based attachment and dismisses appeal against appellant

Benami transaction found where the money trail established that the beneficial owner, not the named buyer, paid the purchase consideration; consequence: ... Benami transaction - Provisional Attachment Order confirmation - Fiduciary capacity - Money trail and proof of consideration - Reconstitution of partnership and benamidar allegation - Section 165(6) of Madhya Pradesh Land Revenue Code, 1959 - Section 2(9)(A) of the Prohibition of Benami Property Transactions Act, 1988 - HELD THAT:- The case involves property at Khasra No. 63/2 admeasuring 1.35 Hec. situated at Village- Avargani Raiyat, Tehsil Kurai, Distt. Seoni. The land was registered in the name of the appellant vide Registered Deed dated 14.01.2022 for consideration value of Rs. 80 Lakhs and with the inclusion of stamp duty and other charges, an amount of Rs. 95,33,110/-. The impugned order contains the payment details and the money trail to show that consideration was directly made by the beneficial owner to the seller of the land. The consideration was not paid by the benamidar appellant. The detailed facts of the transaction have been given in the impugned order which shows that the consideration for purchase of property was made by the beneficial owner. It cannot be considered to be in fiduciary capacity because ultimately the land was registered in the name of the benamidar appellant, thus, it was not a time being arrangement. It was found that the consideration towards purchase of land was paid by Mohd Afzal Abubaker Ahmed Mitha through his partnership firm, M/s Hotel Orient Star and now the property is enjoyed by the beneficial owner because other than 1% share in the partnership firm, 99% share remains with the beneficial owner and others. The appellant, further, stated that he is not a partner in partnership firm and he, in fact, never signed the documents related to the Partnership Deed. The fact aforesaid became relevant to find out involvement of benami transaction and otherwise we find that deed of partnership does not contain signature of the appellant at the place where party no. 12 has been mentioned, rather, it is lying blank. It could not have been clarified by the Ld. Counsel for the appellant as to on what basis a challenge to the order has been made alleging that the reconstitution of partnership deed was containing the signature of the appellant. The perusal of the deed further revealed that the appellant was not having authority of working for the resort, rather, it is to be monitored and looked after by the parties other than the appellant. Thus, the name of the appellant shown in the partnership deed was only to justify purchase of the land in the name of the benamidar due to the bar in the Madhya Pradesh Revenue Code for transfer of land belonging to the tribal to other community. The Adjudicating Authority, further, found that even as per the statement of the appellant, he had denied his partnership and otherwise denied his signature on the documents related to the Partnership Deed. It is coupled with the fact that he had no knowledge about the firm and the interest in that firm and accordingly no capital was introduced by the appellant. Thus, he was made partner for the namesake and accordingly entire transaction was taken to be benami transaction. The financial profile of the appellant was also analyzed to find out whether he was having source and capacity to purchase the land. It was found that the appellant was not filer of the income-tax returns and was not having substantial income and even on the date of recording of his statement he stated about his income to be between Rs. 10,000 to Rs. 12,000 per month and was spending around Rs. 7000 per month on himself. The saving was hardly of few thousand. Thus, we find that ingredients of Section 2(9)(A) of the Prohibition of Benami Property Transactions Act, 1988 have been satisfied and thereby no reason to cause interference in the impugned order. Appeal fails and is dismissed. Issues: (i) Whether the property registered in the name of the appellant is a benami property and whether the Adjudicating Authority correctly confirmed the Provisional Attachment Order by applying the Prohibition of Benami Property Transactions Act, 1988.Analysis: The Tribunal examined documentary and material evidence including the registered sale deed, bank payment records showing consideration paid by the alleged beneficial owner through his firm, the appellant's recorded statement admitting non-payment and limited knowledge of the transaction, the absence of capital contribution by the appellant, and the partnership documents and their signatures. The Tribunal applied the definition of benami transaction under Section 2(9)(A) of the Prohibition of Benami Property Transactions Act, 1988 and considered the context of transfer restrictions under Section 165(6) of the Madhya Pradesh Land Revenue Code, 1959. The Tribunal found that consideration for the purchase was paid by the beneficial owner and that the appellant lacked means to have financed the acquisition, that the appellant's involvement in the partnership was nominal, and that the factual matrix and money trail supported treatment of the transaction as benami.Conclusion: The Tribunal concluded that the ingredients of Section 2(9)(A) of the Prohibition of Benami Property Transactions Act, 1988 are satisfied and that there is no reason to interfere with the Adjudicating Authority's confirmation of the Provisional Attachment Order; the appeal is dismissed.