Fiduciary exception rejected; provisional attachment under benami law affirmed where transfers were one way unaccounted accommodation entries.

Tribunal reviewed whether transfers qualified as benami and whether the fiduciary exception under Section 2(9)(A) applied; it found the intermediary received unexplained large cash deposits, inconsistent business records and unreliable documentary evidence, and that transfers were one way without demonstrated repayment obligations, resembling accommodation entries and monetisation of demonetised currency, therefore the fiduciary exception was not established and the provisional attachment under Section 24(1) of the Prohibition of Benami Property Transactions Act, 1988 was confirmed-the appeal was dismissed.

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Issues: (i) Whether the Adjudicating Authority was justified in confirming the provisional attachment under Section 24(1) of the Prohibition of Benami Property Transactions Act, 1988 by treating the impugned transfers as benami transactions and rejecting the claim of fiduciary capacity under Section 2(9)(A) of the Act.

Analysis: The factual matrix shows large cash deposits in the bank account of an intermediary followed by a transfer of Rs. 67,50,000 to the appellant. The source of the deposited cash was not disclosed. The intermediary's business turnover and income-tax returns were not consistent with the capacity to deposit the said cash. Documentary evidence relied on by the appellant (invoices, TIN) was disowned by the intermediary and signatures and documents were found to be not reliable. The statements of the two proprietors were materially inconsistent. The Tribunal evaluated whether the transactions fell within the fiduciary exception under Section 2(9)(A) and concluded that no material established a two-way fiduciary arrangement or repayment obligation; the transfers were one-way and unaccounted for, matching the modus operandi of accommodation entries and monetisation of demonetised currency.

Conclusion: The Adjudicating Authority's confirmation of the provisional attachment under Section 24(1) of the Prohibition of Benami Property Transactions Act, 1988 is affirmed and the appeal is dismissed.

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