TaxTMI 
TaxTMI 
2024 (9) TMI 720
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.... (2022) 447 ITR 108/289 Taxman 177 (SC) though it is pending on the Review Application. 3. The learned counsel giving brief facts of the case submitted that M/s Seasons Warehousing Pvt. Ltd. - Respondent No. 1 to the appeal was incorporated on 19.07.1996 and was "struck off" from the ROC rolls at the time of filing of reference. The Company, however, purchased the property in the Central, near Railway Level Crossing, Chembur, Mumbai for a sum of Rs. 01 Crore through a Registered Deed dated 28.12.2015. The purchase was made from M/s Shree Krishna Homes Pvt. Ltd. 4. It was revealed that the Company M/s Seasons Warehousing Pvt. Ltd. filed only one Annual Return under Section 159 of the Companies Act and only one Balance Sheet for the financial year 1998-99 showing the size of balance sheet reporting to Rs. 7,52,937/. Other than the documents referred above, no other document was filed with ROC. 5. On a further inquiry, it emanated that the said property has been occupied and enjoyed by M/s Voltamp Controls (I) Pvt. Ltd. - Respondent No. 2. It was found proved from the fact that the ITR for the Assessment Year 2020-21 filed by M/s Voltamp Controls (I) Pvt. Ltd. reflected the address....
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.... (BPU-2), Mumbai (Appeal Nos.1079-1080&1085/2020), decided on 15.12.2023. A detailed reference of the judgment was given to make difference between the two situations. The case in hand has to be analyzed in reference to the amended provision being prospective in nature. It would apply to the Benami transaction took place on or after 01.11.2016. In the case in hand, the property was held by M/s M/s Voltamp Controls (I) Pvt. Ltd. subsequent to the amendment in the definition and thus on account of holding of the property, a case of Benami transaction w.e.f. 01.11.2016 was made out. However, this part of the issue was not considered by the Adjudicating Authority, thus challenge to the order has been made. 8. The learned counsel for the respondents seriously contested the appeal. It is submitted that there is no illegality in the order passed by the Adjudicating Authority thus it deserves to be confirmed. The judgment of the Apex Court in the case of Ganpati Dealcom (supra) has been relied by the respondents for the reason that the transfer of the property was prior to the amendment in the Act of 1988 w.e.f. 01.11.2016. The transfer of the property was on 28.12.2015 i.e. much prior to....
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....lants were holding the shares on the date of initiation of action and it could not be disputed by the appellants. The perusal of the definition of "Benami Transaction" not only makes a reference of transfer of property to fall in the definition of "Benami Transaction" but even its holding under section 2(9)(A) of Amending Act, 2016 has two parts to consider a transaction to fall within the purview of Benami Transaction, as defined under section 2(9)(A) of the Act. The first is about the transfer of the property to a person of which consideration was paid or provided by another person. The second part has been separated from first part by putting word "or" in between. Under the second part of definition, if the property is held by a person whose consideration has been provided or paid by another person then also it would be a "Benami Transaction". 37. The appellant has referred to the definition only by taking the first part, i.e. transfer of shares ignoring the second part of the definition regarding holding of property. If a person is holding a property as on the date of the amendment or subsequent to it, whose consideration was paid or provided by another person, then it will ....
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....diate or future benefit, direct or indirect of the person who has provided the consideration barring the four exceptions carved out with which we may not be concerned. 71. Thus, as per Section 2(9)(A), there must be a transaction or an arrangement; as per such transaction or arrangement, a property is transferred to or is held by a person; the consideration for such property is provided or paid by another person. Pausing here for a moment, on a comparative analysis of this definition with the definition of benami transaction under the unamended 1988 Act, we find that there is a subtle but significant difference in the later definition even at this stage itself. As per the amended definition, the property need not be transferred by 'another person'. The property can be transferred to by any person or held by a person on behalf of any person. But the consideration for such property is provided or paid by the 'another person'. The amended definition proceeds further; such transferred property must be held for the immediate or future benefit of the person who has provided the consideration and such benefit may be direct or indirect. It is equally significant to note ....
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....ectus of the discussions made above, it is apparent that Section 2(9)(A) and Section 2(9)(C) are substantive provisions creating the offence of benami transaction. These two provisions are significantly and substantially wider than the definition of benami transaction under Section 2(a) of the unamended 1988 Act. Therefore, Section 2(9)(A) and Section 2(9)(C) can only have effect prospectively. Central Government has notified the date of coming into force of the Amendment Act of 2016 as 01.11.2016. Therefore, these two provisions cannot be applied to a transaction which took place prior to 01.11.2016. Admittedly, in the present case, the transaction in question is dated 14.12.2011. That being the position, we have no hesitation to hold that the show cause notice dated 30.12.2019, provisional attachment order dated 31.12.2019 and the impugned order dated 30.03.2021 are null and void being without jurisdiction. Consequently, the impugned order is set aside and quashed. 40. The Hon'ble High Court, no doubt propounded a ratio of prospective operation of the Amending Act of 2016 and even refers to the definition of "Benami Transaction". But, the specific argument in reference to hold....
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....n even if transfer was prior to 01.11.2016, such a transaction would be a Benami Transaction under the Amending Act of 2016 and it would apply to such a transaction. 46. In the case of Nexus Feeds Limited & Others, the Division Bench of Telangana High Court has recorded admission of the respondents about the Benami Transactions of a period prior to the Amending Act 2016. 47. The perusal of para 71 otherwise makes it clear that if the property is transferred to any person or held by a person on behalf of any other person of which consideration was provided or paid by another, then it would fall under the definition of "Benami Transaction". The emphasis was made even in regards to the transfer of the property held immediately or for future benefit of the person who has provided the consideration. It would also fall in the definition of "Benami Transaction". 48. According to the Division Bench of the High Court, the two expression words, "transfer" and "held" under the amended provision need to read in conjunction and conclusions have been drawn in para 71 in the case (Supra) that "Benamidar" is a person, real or fictional, in whose name the Benami property is transferred or ....
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.... the property has been purchased prior to the amendment w.e.f. 01.11.2016, then it would be subject to the decision of the Apex Court in the case of Ganpati Delcom (supra). It is, however, with the clarification that if such a property is transferred prior to the amendment but heldeven after the amendment by the Benamidar, then initiation of action under the amended provision would not be invalid. The significance of the word `held‟ given under Section 2(9)(A) has been elaborately discussed which word was not existing in the earlier definition of Benami transaction (pre-amendment). In the instant case, the Company in whose name the property was purchased i.e. M/s Seasons Warehousing Pvt. Ltd. had no capacity to purchase the property worth of Rs. 01 Crore because as per the annual return submitted with the ROC, it was having worth of around 7 lakhs and that too in the Financial Year 1998-99. It is also a fact that the ITR for the Assessment Year 2020-21 filed by M/s Voltamp Controls Pvt. Ltd. reflected the address of the said property. The Adjudicating Authority ignored the definition of "Benami transaction" given under the amending Act of 2016 while passing the order. The pro....