Benami RTGS credits sustained where banking evidence outweighed unsubstantiated gold-sale records and denied cross-examination caused no prejudice.

RTGS credits purportedly received from gold sales were treated as a benami transaction where demonetised cash was deposited with the alleged benamidar, followed by transfers from entities under his control, supported by his sworn statement regarding RTGS-entry arrangements. Invoices, ledgers and stock records did not independently substantiate genuine sales, and the absence of prior business dealings, timing, rates and unusual weights weakened the explanation. Cross-examination was not required where no intermediary statement existed, the benamidar was summoned but did not appear, and no actual prejudice was shown. The provisional attachment was therefore sustained.

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Issues: (i) Whether the RTGS credits received by the appellant, purportedly against sale of gold, constituted a benami transaction; (ii) Whether non-grant of cross-examination of the alleged benamidar and intermediary violated principles of natural justice.

Issue (i): Whether the RTGS credits received by the appellant, purportedly against sale of gold, constituted a benami transaction.

Analysis: The undisputed cash deposit in demonetised notes with the alleged benamidar, the subsequent RTGS transfers from entities controlled by him, and his sworn statement identifying the cash as having been received for providing RTGS entries supported the allegation. The invoices, ledger and stock records did not furnish independent substantiation of a genuine gold sale; the appellant established no prior business relationship with the transferee entities, while the timing, invoiced rates and unusual weights further undermined the asserted sale explanation.

Conclusion: The RTGS credits constituted a benami transaction and the appellant was the beneficial owner; the finding is against the assessee.

Issue (ii): Whether non-grant of cross-examination of the alleged benamidar and intermediary violated principles of natural justice.

Analysis: No statement of the intermediary was on record, making his cross-examination inapplicable. The appellant had been supplied the alleged benamidar's statement, and he was summoned for cross-examination but did not appear. Cross-examination is not an inflexible requirement in quasi-judicial proceedings; procedural denial warrants relief only upon actual prejudice. No prejudice was established on the facts.

Conclusion: There was no violation of principles of natural justice; the finding is against the assessee.

Final Conclusion: The confirmation of provisional attachment remains legally sustainable because the appellant failed to rebut the benami nature of the credited funds and established no prejudicial denial of procedural fairness.

Ratio Decidendi: In benami proceedings, an unrefuted sworn statement and corroborative banking circumstances may establish a benami transaction, and denial of cross-examination does not invalidate the proceeding absent demonstrated prejudice.

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