TaxTMI 
TaxTMI 
2025 (8) TMI 274
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....s found that Shri Hussain P and Shri Muhammed Sayad were in possession of the cash of Rs. 1,84,26,000/- without any valid document/evidence for the source of cash. The Police seized the cash and produced them along with the cash before JFCM-1 Court, Pattambi. On the receipt of the above information regarding the seizure of cash from Police Department, enquiries were conducted by DDIT (Inv.), Palakkad, Income Tax Department. A summons under Section 131 of the Income Tax Act were issued to Shri Hussain P and his statement was recorded under Section 131 of the Income Tax Act on 07.06.2018, wherein he stated that he along with his brother Sri. Assin is having a shop by name "Nadim Tyres" and doing the business of sale of old and new tyres. He also works as driver in free time. All together he and his family earn approximately Rs. 35000 per month. On 05.06.18, he was asked to pick the cash from Salem by Sri. Shihab employed in Dubai over phone. Shri. Shihab is an acquaintance of Shri. Hussain P from Saudi, when Shri Hussain P was working there 8 years back. As per the instruction of Shri Shihab, he picked up the cash front Salem on 06.06.18. He also stated that the source of the seiz....
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....06.2019 and thereby calling upon the defendants to appear on 02.08.2019. In response to the Show Cause Notice the defendant filed replies before the Adjudicating Authority. After going through the reply and hearing the rival submissions the Adjudicating Authority being not convinced with the replies & submissions allowed the reference No. 1405/2019 vide order dated 19.05.2020. Aggrieved the said order, appellant filed the present appeal. 3. During the arguments, Ld. Counsel for the appellant submitted that the proceedings u/s 24 of the Act can be initiated only when the Initiating Officer discharges the initial burden cast on him to prove that the cash found represents sale proceeds of "property held as benami" by the notice (herein appellant) for a "beneficial owner who is not traceable in the present case. In the instant case, there is not even a suggestion that the cash found represents "sale proceeds" of a property held as benami by the appellant. It is submitted that in the facts and circumstances of the case, the Initiating Officer is not justified in invoking the provisions of the Act in respect of the cash found in his possession by the Pattambi Police on 07.06.201....
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....at the application of other laws is not barred. The provisions of this Act shall be in addition to, and not, save as hereinafter expressly provided, in derogation of any other law for the time being in force. This clearly express the intention of legislature. In the present case, the appellant has filed Income Tax Return declaring the amount seized as his income. Sec. 24(1) of the Act under which the Initiating Officer issued notice dated 28.02.2019 reads thus: 24: Notice and Attachment of Property involved in Benami Transactions: [1]: Where the Initiating Officer, on the basis of material in his possession, has reason to believe that any person is a benamidar in respect of a property, he may, after recording reasons in writing, issue a notice to the person to show cause within such time as may be specified in the notice why the property should not be treated as benami property: The basic requirement for the issue of notice is the "reason to believe" that a person is a "benamidar" in respect of a property. "Benamidar" in turn, is defined u/s 2[10] of the Act thus: "[10]: "benamidar" means a person or a fictitious person, as the case may be, in whose na....
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....unexplained cash or cash source regarding which is not explained with acceptable evidence will not come within the ambit of the term "benami property" that could be proceed against under Sec. 24[1] of the Act. She stressed that the Initiating Officer has failed to further note that presence of cash on the person of the appellant did not evidence any "transaction or arrangement in respect of a property" involving consideration which alone is covered by Sec. 2[9][D] of the Act. The transaction or arrangement in respect of a property referred to in Sec. 2[9][D], it is apparent, covers the sale or transfer of a movable or immovable property involving passing of consideration from the buyer to the seller - where the buyer is either not traceable or is fictitious. As against this, in the instant case, the only case of the Initiating Officer is that the "source" for the cash found is not properly explained which cannot make the cash found, benami property that could be proceeded against u/s 24[1] of the Act. In the same manner, the Officer has no case that the cash found on the possession of the appellant by the police is sale proceeds of a property that was held by him on behalf of a "be....
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....st be in writing based on cogent material which ought to be supplied to the Noticee which were never communicated to him and therefore said proceedings are bad in law. She contended that it was incumbent upon the respondents to give reasons in writing to the noticee which must be relevant and germane. She further pointed out that the appellant has already filed the Income Tax Returns (ITRs) for the assessment year 2019-20, wherein gross total income of Rs. 1,87,25,000/- is shown and appellant has to pay the Income Tax for the seized amount relied upon lying with the Income Tax Department. She argued that the respondent is not concerned with the source of cash earned by the appellant by any means whatsoever and once appellant has paid the Income Tax on the concerned source of income and made himself liable to Income Tax, the question to treat the cash assess to the Income Tax as Benami Transactions does not arise. Prayer is accordingly made to allow the present appeal. 4. On the other hand, Ld. Counsel for the respondent controverted the contention of Ld. Counsel for the appellant on each and every issue, which will be reflected in our discussion in the following para. 5....
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....y. 7. Now coming to issue no. ii), the relevant provisions are reproduced as under: Sec. 2[8] of the Act defines "Benami property" as "any property which is the subject matter of a benami transaction and also includes the proceeds from such property". "Benamidar" in turn, is defined u/s 2[10] of the Act thus: "[10]: "benamidar" means a person or a fictitious person, as the case may be, in whose name the property is transferred or held and includes a person who lends his name." Section 2(12) of the PBPT Act defines "Beneficial owner" : "means a person, whether his identity is known or not, for whose benefit the benami property is held by a benamidar." "Benami property" is thus a property held by a "benamidar" (as defined u/s 2[10] of the Act) for and on behalf of a "Beneficiary owner" [as defined u/s 2[12] of the Act]" to whom he is answerable. Therefore, the contention of the Ld. counsel for the appellant that for any Benami transaction three parties are required is devoid of any merits, as the benami transaction requires only the 'benamidar' and 'beneficial owner', hence just two parties are sufficient to constitute a benami transaction....
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.... corroborating oral and documentary evidence, except his self-serving statement. The appellant has not disclosed how he earner the huge recovered money and the source of real estate transactions is also not disclosed by him in support of his contention. The fact that the Initiating Officer of respondent could not trace out and examine Sihab of Dubai or the source from where appellant collected the cash clearly attracts Section 2(9)(D) of PBPT Act. Thus, this issue is decided against the appellant and in favour of the respondent. 9. Now coming to issue no iv), it is stressed by the appellant that the provisions of PBPT Act are not attracted, seeing the fact that appellant filed ITR qua the said amount. However, we are of the view that firstly, the submission of Income Tax Return after being caught and proceeded against is an afterthought strategy to claim back at least 50% of the seized amount. Secondly, the recovery of cash in absence of any explanation is duly covered under the scope of PBPT Act. The contention of the respondent that Section 60 of the PBPT Act prescribes that the provisions of this Act shall be in addition to any other laws in force and the right of action unde....