AI Drafter 
TaxTMI 
TaxTMI 
2024 (4) TMI 1049
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....in two different connected appeals were declared to be the beneficial owner of those properties. 3. The list of the properties have been described in three different tables of the impugned order. The learned counsel for the appellants submitted that perusal of the three tables would reveal that all those properties were purchased prior to the amendment in the Act, 1988 by the notification dated 01.11.2016 to amend various provisions of the Act of 1988. 4. In the light of the aforesaid and being a case of benami transaction prior to the amendment in the Act of 1988 by the notification dated 01.11.2016 and in pursuance of the Judgement of the Apex court in the case of "Union of India & Anr. Versus M/s. Ganpati Dealcom Pvt. Ltd." dated 23.08.2022 reported in 2022 SCC Online SC 1064, the impugned order deserves to be set aside. 5. The amendment of 2016 were held to have prospective application in the judgement (supra). Thus any benami transaction prior to the amendment could not have been subjected to proceeding under the Act of 1988 as amended vide the notification dated 01.11. 2016. 6. In the light of the aforesaid, the impugned order deserves to be set aside. Referring t....
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.... „benami transaction‟ given under section 2 (1) (9) of the amended provision, it was held that if the benami property is held by the benamidar even subsequent to the amendment in the year 2016, then it would be considered to be out of benami transaction and in that eventuality, the amended provision by the notification of 2016 would apply. 13. The issue aforesaid has been decided by this Tribunal in the case of Suresh Bhageria Versus the Initiating Officer, DCIT (BPU- 2), Mumbai appeal number FPA-PBPT-1085/MUM/2020 vide Judgement dated 15/12/2023 14. In the instant case, though all the properties were purchased/ transferred prior to the amendment of 2016 in the Act of 1988 but properties were held by the benamidar even subsequent to the amendment and thereby Judgement of the Apex Court in the case (Supra) would be of no assistance. The judgement aforesaid would be applicable if benami transaction defined under the amended provision by the notification of 2016 was prior to the amendment and the benami transaction did not continue thereupon by holding the properties. The case in hand is covered by the Judgement of this Tribunal in the case of Suresh Bhageria (Supra)....
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....Tribunal would make a reference of those statements while dealing with the rival arguments. 23. The learned counsel for the appellant has given rejoinder to the argument limited to the statement of the seller referred by the Adjudicating Authority. It was alleged to be without reference of those statements in the show cause notice to initiate the proceedings and an opportunity of cross examination. The valuable right to cross examine of the witness was denied to the appellant. Thus, the Tribunal should not make a reference of the statement of the seller and even of Sukh Lal Baiga as were recorded in the camera and in a close room. It was written in the manner desired by the respondent and thereupon took sign of Sukh Lal Baiga and different persons. 24. The learned counsel for the appellant even made a reference of the argument specifically raised regarding denial of opportunity of cross examination of witness. The prayer is accordingly to allow the appeal and set aside the impugned order. 25. We have considered the rival submission and scanned the record carefully. The properties declared to be out of the benami transaction have been given in three different tables and are....
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....01 Shri Sukhlal S/o Shri Ram Kirpal Baiga, Village - Burhar, Thana and Post- Burhar, Teshil- Shohagpur, District-Shahdol (M.P.) 8. 2880/3 0.337 Khasra No. 2880/3, Village-Lalpur, Patwari Halka No. 90, Tehsil- Shohagpur, District- Shahdol (M.P.) Date of Registry:- 15.02.2001 Shri Sukhlal S/o Shri Ram Kirpal Baiga, Village - Burhar, Thana and Post- Burhar, Teshil- Shohagpur, District-Shahdol (M.P.) 9. 2082/5 0.040 Khasra No. 2082/5 Village- Lalpur, Patwari Halka No. 64, Tehsil- Sohagpur, District Shahdol Shri Sukhlal Baiga S/o Shri Kripal Baiga, VillageNaogwa, Post- Karkati, Teshil- Burhar, DistrictShahdol (M.P.) 10. 2081/5 0.095 Khasra No. 2081/5 Village- Lalpur, Patwari Halka No. 64, Tehsil- Sohagpur, District Shahdol Shri Sukhlal Baiga S/o Shri Kripal Baiga, VillageNaogwa, Post- Karkati, Teshil- Burhar, DistrictShahdol (M.P.) 11. 2066/5 0.027 Khasra No. 2066/5 Village- Lalpur, Patwari Hal....
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....as Khand-karkeli, Tehsil- Bandhavgarh District-Umariya (M.P.) Date of Registry:- 25.09.2007 Shri Sukhlal, S/o Shri Ramkripal Singh, R/o Naugawa, Tehsil- Budhar, District- Shahdol 03 377 0.607 hec of 1.420 hec Khasra No. 377 , Village- Banka, Patwari Halka No. 04,Vikas Khand-karkeli,Tehsil- Chandiya District-Umariya (M.P.) Date of Registry:- 04.01.2013 Shri Sukhlal Baiga, S/o Shri Ramkripal Singh, R/o Naugawa, Tehsil- Chandia (Budhar), District- Shahdol 04 375/1 kha 0.809 Khasra No. 375/1 kha, Village- Banka, Patwari Halka No. 03,Vikas Khand-karkeli, Tehsil- Chandiya (bandhavgarh), DistrictUmariya (M.P.) Date of Registry:- 31.03.2008 Shri Sukhlal Baiga, S/o Shri Ramkripal Singh, R/o Naugawa, Tehsil- Budhar, District- Shahdol 05 379 0.462 Khasra No. 379, Village- Banka, Patwari Halka No. 03,Vikas Khand-Karkeli, Tehsil- Chandiya (Bandhavgarh), District-Umariya (M.P.) Date of ....
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....iven under the amended provision of section 2 (9) by this Tribunal in the case of Suresh Bhageria Versus the Initiating Officer, DCIT (BPU-2), Mumbai (Supra). It was held that if the benami transaction defined under section 2 (9) is to be applied, then it would be not only for transfer of the property but even its holding. The definition of benami transaction under the amended provisions was different than the un-amended provision. 29. Para 16 to 51 of the judgement of Suresh Bhageria Versus the Initiating Officer, DCIT (BPU-2), Mumbai (Supra) are quoted here under for ready reference:- 16. Elaborating the arguments, it was submitted that transfer of shares may be prior to the amendment by the Amending Act 2016, but they were held by the two companies M/s Prism Scan Express Pvt. Ltd. and M/s Futurage Corporate Care Private Limited even subsequent to the amendment. 17. In the light of the aforesaid, they were involved in the benami transactions even subsequent to the amendment. A reference of the definition of "Benami Transaction" under section 2 (9) of the Act of Amending Act of 2016 was given and is quoted hereunder:- Section 2. Definitions.- In this ....
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....tion 53A of the Transfer of Property Act, 1882 (4 of 1882), if, under any law for the time being in force,- (i) consideration for such property has been provided by the person to whom possession of property has been allowed but the person who has granted possession thereof continues to hold ownership of such property; (ii) stamp duty on such transaction or arrangement has been paid; and (iii) the contract has been registered. 18. As per the definition quoted above, the benami transaction means a transaction or an arrangement where a property is transferred to or is held by a person and the consideration of such property has been provided or pa id by another person. The aforesaid definition is applicable to this case. According to the definition, "benami transaction" does not mean only transfer of property, but include even its holding by a person without payment of consideration rather it was paid or provided by another person. Since it has come on record that on the date of survey, subsequent to amendment by the Amending Act 2016 and even show cause notice, the shares were held by the appellant Companies, it would fall in the definition of "Bena....
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.... (1) No person shall be convicted of any offence except for violation of the law in force at the time of the commission of the act charged as an offence, nor be subjected to a penalty greater than that which might have been inflicted under the law in force at the time of the commission of the offence. 93. In the case at hand, the 2016 Act containing the criminal provisions is applicable only prospectively, as the relevant Sections of the preamendment 1988 Act containing the penal provision, have been declared as unconstitutional. Therefore, the question of construction of the 2016 Act as retroactive qua the penal provisions under Sections 3 or 53, does not arise. 96. This brings us to the last aspect as to the retroactive operation of confiscation (forfeiture) under Section 5 read with Chapter IV of the 2016 Act. It is the argument of the Union of India that civil forfeiture being in the domain of civil law is not punitive in nature. Therefore, it does not attract the prohibition contained under Article 20(1) of the Constitution. Meaning thereby, that if this Court holds that the civil forfeiture prescribed under the 2016 Act is punitive, only then will the....
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....tandards cannot be merely termed as procedural. 127 In view of the fact that this Court has already held that the criminal provisions under the 1988 Act were arbitrary and incapable of application, the law through the 2016 amendment could not retroactively apply for confiscation of those transactions entered into between 05.09.1988 to 31.10.2016 as the same would tantamount to punitive punishment, in the absence of any other form of punishment. It is in this unique circumstance that confiscation contemplated under the period between 05.09.1988 and 31.10.2016 would characterise itself as punitive, if such confiscation is allowed retroactively. Usually, when confiscation is enforced retroactively, the logical reason for accepting such an action would be that the continuation of such a property or instrument, would be dangerous for the community to be left free in circulation. InR (on the appln of the Director of the Assets Recovery Agency) v Jia Jin He and Dan Dan Chen, [2004] EWHC Admin 3021, where Collins, J. had stated thus: "52. In Mudie, at page 1254, in the judgment of Laws LJ, who gave the only reasoned judgment, there is set out the citation from Butler whic....
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....the provisions of the Act of 1988 and the Amending Act of 2016. The conclusions thereupon were drawn by the Apex court in para 130 quoted above. The benami transaction prior to the Amending Act 2016 were not to be touched in reference to the amended provisions. 23. It is not in doubt that benami transaction prior to the amendment is to be governed by Judgement of the Apex Court and for it, certain provisions of the Amending Act, which includes even provision of forfeiture would not apply. It would, however, be relevant to find out whether benami transaction is of a period prior to the amendment or even subsequent to it also. 24. For the aforesaid, we need to reiterate the definition of "Benami Transaction." It not only refers in the transfer of property but also its holding and thereby, if somebody is holding the benami properties subsequent to the amendment, it would come in the sweep of "benami transaction". 25. If it is a case of transfer of property prior to the amendment in the definition of "Benami Transaction" and such property is not held by the benamidar as on the date of the amendment or subsequent to it, then the Amending Act of 2016 would not ....
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.....1, 70, 71, 73 and 93 of the said judgement was given. It was submitted that the controversy before the Division Bench of the High Court was similar to what is involved in this case. The High Court examined the issue minutely and held that any transfer of share prior to the amendment by the Amending Act of 2016 would not be governed by the amended provision. A transaction was not an offence in the year prior to the amendment by the Act of 2016 would not be an offence as per section 2 (9) (A) and (C ) of the Amending Act. 34. We have considered the submissions made aforesaid. To analyse the issue, we have gone through the judgements referred to above. 35. If the facts of this case are taken into consideration, the transfer of shares of B.I.L in favour of Companies, M/s Prism Scan Express Pvt. Ltd. and M/s Futurage Corporate Care Private Limited started after the year 2013. The fact, however, remains that those shares are still held by the appellant Companies and it was not only on the date of amendment by the Amending Act of 2016 but even at the time of survey by the Income Tax Department for the year 2018.-19. 36. The appellants were holding the shares on....
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....der the Amendment Act of 2016, the definition of benami transaction has been expanded which we have already dealt with in paragraphs 49 and 50 of this judgment. Since the specific allegation and finding of the respondents against the petitioners is that the transaction entered into by the petitioner with the third respondent on 14.12.2011 is a benami transaction within the meaning of Section 2 (9) (A) read with Section 2 (9) (C) of the 1988 Act as amended by the Amendment Act of 2016, we may once again analyze the said provisions. 69.1 Admittedly, these two provisions were not in the statute either on the date when the 1988 Act was enacted or when the transaction took place on 14.12.2011. It has been brought into the statute book vide the Amendment Act of 2016. Question for consideration is whether the aforesaid definitions can be applied to the above transaction which took place on 14.12.2011? 70. As per Section 2 (9) (A), a benami transaction would mean a transaction or an arrangement - (a) where a property is transferred to or is held by a person and the consideration for such property has been provided or paid by another person; and (b) the property is held fo....
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....tion (3), the penalty for the offence of benami transaction is imprisonment which may extend to three years or with fine or with both. However, Sub-Section (3) of Section (3) clarifies that whoever enters into any benami transaction after coming into force of the Amendment Act of 2016 i.e., after 01.11.2016, shall be punished in accordance with Section 53 notwithstanding anything contained in Sub-Section (2) which provides for a stiffer penalty of rigorous imprisonment for a term which shall not be less than one year but which may extend to seven years and shall also be liable to fine which may extend to twenty five percent of the fair market value of the property. We may, even at the cost of repetition, mention that it is not the case of the respondents that the transaction in question is a benami transaction within the meaning of Section 2 (a) of the unamended 1988 Act. If it is a benami transaction under Section 2 (a) of the unamended 1988 Act, then it would attract the lesser penalty under Section 3(2). But if it is a benami transaction under Sections 2 (9) (A) and 2 (9) (C) of the 1988 Act as amended by the Amendment Act of 2016, then it will attract the stiffer penalty under ....
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....for that to miss any word used in the statute. The word "held" has to be given true meaning and that too after proper reading of the definition, otherwise we would be giving interpretation to the provision going contrary to the definition of "Benami Transaction". It can be explained by an illustration for clarity of the issue. 43. If a property is transferred to a person whose consideration was paid or provided by a person prior to 01.11.2016 and such a property is not held by the person on date or subsequent to the amendment then such a Benami Transaction would not be affected by the Amending Act 2016. 44. However, if transfer of property took place prior to 01.10.2016 and property is "held" by the person even subsequent to the date aforesaid who has not paid the consideration, rather it was paid or provided by another person, then irrespective of the date of transfer of the property, its holding would be a "Benami Transaction". 45. We cannot ignore the word, "held" for giving proper interpretation of the definition of "Benami Transaction". Accordingly, while we rely upon the Judgement of Hon'ble Apex Court in the case of Ganpati Dealcom Private Limited ....
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.... "held" under section 2 (9) (A) (a) is of significance and would make a transaction to be a Benami Transaction, if a person holds a property even on the date of amendment or subsequent to it of which consideration has been provided or paid by another person prior to the amendment. We have given illustration for the aforesaid to hold that if a property was transferred prior to the amendment by the Amending Act, 2016 and is not held by the transferee as on the date of the amendment, then the amended provision would not apply but after transfer of the property prior to the amendment if it is held by the Benamidar as on the date of the amendment or subsequent thereto, it would fall within the definition of "Benami Transaction" and registration of case for that would not be considered to be a continuous offence but becoming an offence in reference to the amended definition of "Benami Transaction". Accordingly, the judgement in the case of Suresh Seth (Supra) would not apply to the case. 51. The first issue is accordingly decided against the appellant and in the favour of the respondents because property was "held" even after the amendment by the Amending Act of 2016. 30. The....
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....ed and referred by the Adjudicating Authority. They have stated about payment of consideration by Padam Kumar Singhania for all the properties. Those statement has been referred in the impugned order and quoted here under for reference:- B.6.1. Statement on oath of Shri Bharat Kol S/o Shri Baldev R/o Village - Lalpur, Tehsil-Sohagpur, Shahdol (one of the sellers of the property mentioned at Sr. No. 3 in above Table-A):- During his statement dated 19/11/2020 recorded on oath u/s 19(1) of the PBPT Act, Shri Bharat Kol has revealed that the he has sold his subject property to Shri Padam Kumar Singhania R/o Behind Budhar Railway Station, Budhar, Shahdol and received that sale consideration from him only. Further, during his statement he also denied of having any familiarity with Shri Sukhlal Baiga S/o Shri Kirpal Baiga R/o Village-Nawgawan, Tehshil-Budhar, Shahdol. (Copy of the statement is enclosed as annexure- L-3) B.6.2. Statement on oath of Shri Bisahu Kol S/o Shri Narbad Kol R/o Village-Lalpur, Tehsil-Sohagpur, Shahdol (one of the sellers of the property mentioned at Sr. No. 3 in above Table-A):- During his statement dated 20/11/2020 re....
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....a of Budhar and Shri Padam Kumar Singhania has only the possession of these lands and Shri Padam Kumar Singhania has planted trees and plants on the subject land. (Copies of the statements are enclosed as annexure- L-6 & L-7 respectively.) B.6.5. Statement on oath of Shri Ramnath S/o Shri Tangu R/o Village - Lalpur, Tehsil-Sohagpur, Shahdol, the seller of the property mentioned at Sr. No. 7 in above Table-A:- During the field enquiry, it was found that Shri Tangu, the seller of the property as mentioned in Sr. No. 7 of above Table-A, has been passed away, hence, in order to find out the real facts in respect of the said land that to whom it has been sold, the statement of Shri Ramnath the son of late Shri Tangu was recorded on oath on 20/11/2020 u/s 19(1) of the PBPT Act 1988. During his statement, Shri Ramnath also stated that the subject land was sold by his deceased father Late Shri Tangu to Shri Padam Kumar Singhania and the sale consideration was received from him only. B.6.10. Statement on oath of Shri Jagpratap Singh S/o Shri Sukhdev Singh R/o Village-Banka, Tehsil-Chandia, Distt. Umaria, the seller of the property mentioned at Sr....
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....es were recorded by the Adjudicating Authority so as to allow cross examination of those witnesses as a course. The statement of witnesses were recorded during the course of investigation and there is no provision to provide cross examination by the Investigating Officer. 40. Hence, the allegation that Investigating Officer did not provide an opportunity of cross examination cannot be accepted. No one prevented the appellant to make an application to seek cross examination of the witnesses before the Adjudicating Authority. The appellant having failed to make an application to seek cross examination cannot now raise issue if the statement of witnesses have been relied after supplying a copy of those statement to the appellant. 41. In the light of the aforesaid, even the legal issue in reference to cross examination cannot be accepted and accordingly we do not find any force even in the third issue raised by the appellant. 42. However, we find a case for interference in the impugned order in reference to Aaditya Vikram Singhania holding him to be the beneficial owner only for the reason that he subsequently purchased benami properties in the year 2019. There is nothing on r....
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