Benami transaction proved where money trail showed beneficial owner control and ostensible purchasers lacked independent funds.

A benami arrangement is established where the beneficial owner supplies the real consideration through a structured financing device, the ostensible purchaser lacks independent means to buy, and the money trail shows title being placed in a benamidar to bypass the legal position. Unsupported allegations that statements were recorded under threat or coercion do not invalidate inquiry material where no evidence of compulsion or enmity is shown. Separate FIR or money-lending allegations do not displace an independent benami inquiry. On these facts, the Tribunal upheld the benami finding and sustained the provisional attachment.

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Issues: (i) Whether the material on record established a benami transaction, including the role of the beneficial owner, the benamidar, and the source of consideration for the properties attached. (ii) Whether the statements and other evidence relied upon by the respondent were vitiated because they were allegedly recorded under threat or coercion, and whether the connection with the FIR or money-lending allegations displaced the benami finding.

Issue (i): Whether the material on record established a benami transaction, including the role of the beneficial owner, the benamidar, and the source of consideration for the properties attached.

Analysis: The evidence showed a structured arrangement in which loans were advanced to landholders, sale deeds were to be taken in the name of third parties, and on default the properties were to stand in the names of persons who had no independent means to purchase them. The bank accounts and transactions were shown to be controlled by the beneficial owners, while the ostensible purchasers failed to disclose a credible source of funds or supporting documents for purchase consideration. The sequence of transactions and the money trail supported the conclusion that consideration moved from the beneficial owner and that the properties were acquired in the names of benamidars to bypass the legal position.

Conclusion: The benami transaction was proved, and the attachment order was justified.

Issue (ii): Whether the statements and other evidence relied upon by the respondent were vitiated because they were allegedly recorded under threat or coercion, and whether the connection with the FIR or money-lending allegations displaced the benami finding.

Analysis: The allegation of coercion was not supported by material. The statements were recorded during inquiry and by the Initiating Officer, and there was nothing to show enmity, compulsion, or any other circumstance that would invalidate them. The FIR and money-lending allegations were only background facts and did not bar an independent inquiry into benami dealings. The existence or fate of the FIR did not negate the separate material collected in the benami proceedings.

Conclusion: The evidence was admissible and reliable, and the challenge on this ground failed.

Final Conclusion: The Tribunal upheld the finding of benami transactions and sustained the provisional attachment, with all appeals being disposed of against the appellants.

Ratio Decidendi: A benami arrangement is established where the beneficial owner provides the real consideration through a structured financing device, the ostensible purchaser lacks independent financial capacity, and the money trail and surrounding circumstances show that title was placed in a benamidar to evade the legal position; unsupported allegations of coercion do not displace such evidence.

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