Benami evidence can rely on income-tax search material when corroborated by documents, electronics, and supporting statements.

Evidence collected in an income-tax search may be relied on in benami proceedings, and a separate independent enquiry is not required where the same material is used to test whether a benami arrangement exists. Retracted statements do not by themselves lose evidentiary value if supported by documentary and electronic records. Here, the Tribunal treated the search material, cash-routing statements, and electronic sheets as mutually corroborative, and found that unexplained fund movement, absence of genuine business activity, and routing of unaccounted cash through accommodation entries supported the benami finding. The provisional attachment was therefore confirmed.

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Issues: (i) Whether the respondent could rely on material collected during the income-tax search without conducting an independent enquiry under the benami law; (ii) Whether the material on record, including retracted statements and electronic records, was sufficient to sustain the finding of benami transaction and the confirmation of provisional attachment.

Issue (i): Whether the respondent could rely on material collected during the income-tax search without conducting an independent enquiry under the benami law.

Analysis: The Tribunal held that there was no legal bar against relying on evidence collected by the income-tax authorities, including statements recorded during search and documentary or electronic material, for proceedings under the benami law. The two proceedings serve different purposes, and the respondent was entitled to use the same material for determining whether a benami transaction existed. The absence of a separate independent enquiry, by itself, did not vitiate the proceedings.

Conclusion: The issue was decided against the appellants and in favour of the respondent.

Issue (ii): Whether the material on record, including retracted statements and electronic records, was sufficient to sustain the finding of benami transaction and the confirmation of provisional attachment.

Analysis: The Tribunal relied on the search material, the statements of persons involved in the cash routing arrangement, and the electronic records such as the "Hisab" and "Octonward Final" sheets, which were found to be mutually corroborative. It was found that unaccounted cash generated from the alleged online betting and gambling activity was routed through accommodation entries and ultimately channelised into the entities treated as benamidars. The Tribunal further held that retracted statements could still be relied upon when supported by corroborative material, and that the absence of genuine business activity, together with the unexplained movement of funds, supported the inference of benami arrangement.

Conclusion: The issue was decided against the appellants and in favour of the respondent.

Final Conclusion: The appeals failed on merits, and the confirmation of the provisional attachment was upheld.

Ratio Decidendi: In benami proceedings, evidence collected in income-tax search can be relied upon if independently corroborated, and retracted statements do not lose probative value where electronic and documentary material supports the same benami pattern.

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