Benami property inference sustained where unexplained cash routing and insufficient income failed to rebut the source of consideration

A prima facie benami inference may arise where immovable property is purchased in the appellants' names despite negligible disclosed income, and the consideration is traced through cash deposits and layered banking transfers that remain unexplained. The Tribunal relied on statements recorded under section 50 of the Prevention of Money Laundering Act, 2002, together with the absence of any genuine lending or contractual explanation, to treat the transactions as benami in nature. On that material, the appellants failed to rebut the source of consideration or displace the inference, and the provisional attachment of the properties was upheld.

---

---

Issues: Whether the provisional attachment of the immovable properties was valid on the footing that the transactions were benami transactions and the appellants failed to disprove the source of consideration and the routing of funds.

Analysis: The properties were purchased in the names of the appellants, whose disclosed income was negligible or insufficient to match the consideration paid. The material on record showed that the consideration reached the sellers through a chain of banking transactions preceded by cash deposits in the accounts of intermediaries, and the persons/entities who routed the funds were unable to explain the source of the cash or establish any genuine lending or contractual arrangement. The statements recorded under section 50 of the Prevention of Money Laundering Act, 2002 from the sellers and intermediaries were relied upon to show payment over and above the registered sale consideration. The Tribunal treated these circumstances as sufficient to establish a prima facie benami arrangement within the meaning of the Prohibition of Benami Property Transactions Act, 1988, and held that the appellants failed to rebut the inference or explain their own source of funds.

Conclusion: The provisional attachment was upheld and the benami findings were sustained against the appellants.

Final Conclusion: The appeals were not found fit for interference, and the attachments confirmed by the Adjudicating Authority stood affirmed.

Ratio Decidendi: A benami transaction may be established on a prima facie basis by a chain of unexplained cash routing, insufficient disclosed income, and unrefuted circumstantial evidence, and once such material is shown, the burden shifts to the appellant to prove the real source of consideration and displace the benami inference.

---