AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2025 (9) TMI 1176
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....ubilee Hills Co-operative House Building Society (hereinafter referred to as 'Society') in a potential benami transaction, in which one Smt. B. Sirisha was reported to have transferred the said plot of land to one Smt. Ch. Sirisha for ultimate benefit of one Shri P. Srihari (appellant). 3. In the course of inquiry, the IO gathered that the said plot of land was first allotted to Smt. B. Sirisha by way of a draw of lots on 21.07.1988. It was as part of a regular allotment process by the Society and thereafter transferred to Smt. Ch. Sirisha on 30.11.1991. The property was subsequently registered in the name of Smt. Ch. Sirisha on 26.06.2020 and no sooner the property was registered in her name, it was transferred to the appellant Shri P. Srihari by way of gift on 29.06.2020. 4. It is alleged that the appellant Shri P. Srihari admitted to have paid stamp duty for both the transactions i.e. registration of property in the name of Smt. Ch. Sirisha and its transfer in his name by way of a gift. Thus, the respondents have taken appellant Shri P. Srihari to be the beneficial owner while Smt. Ch. Sirisha to be the benamidar. 5. After issuance of summons, Smt. B. Sirisha and Smt. C....
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....e plot and litigation therein and, therefore, it was gifted to her uncle who paid the registration charges of the plot and the gift deed. It could not have been taken towards consideration because it was initially paid by Smt. B. Sirisha but ignoring the aforesaid, the impugned order has been passed which would come out even from a bare reading of the impugned order. The respondents failed to show payment of consideration of the plot to the seller by the beneficial owner because payment of registration charges and the stamp duty for the gift deed cannot be considered to be the consideration for purchase of the property. It is more so when the initial allotment of plot was in the year 1988 and it is not the case of the respondents that the said allotment was by way of benami transaction and it could not have been on its transfer of membership of the Society from Smt. B. Sirisha to her sister's daughter in the year 1991. The impugned order thus deserves to be set aside. The reference of certain facts was given which would be referred while dealing with the arguments of the appellant and also of the respondents. Arguments of counsel for the respondents: 10. The appeal was veheme....
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.... Deed in favour of Smt. Ch. Sirisha for the said plot on 26.06.2020. 14. After the aforesaid, Smt. Ch. Sirisha executed a Registered Gift Deed in favour of the appellant P. Srihari on 29.06.2020 being her uncle and otherwise Smt. Ch. Sirisha had shifted to USA thus was unable to handle the litigation which remained for the boundary other than against the Society by way of a writ petition. For execution of the Gift Deed, the appellant paid applicable stamp duty and registration charges but other than that no consideration was paid by him to the seller at any point of time so as to make out a case of benami transaction. 15. It is also a fact that the appellant executed an Agreement to Sell in favour of the other appellant M/s Yellow Stone for a sum of Rs. 6,56,10,000/- and accordingly the amount was received. However, looking to the litigation of the property in reference to its boundary, the amount payable by M/s Yellow Stone was kept with M/s Avexa Corporation for a sum of Rs. 5,25,00,000/- till the pending litigation finally decided. The facts aforesaid have been taken into consideration by the respondents but it was then finally concluded that the property in question is in....
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....ely that, he might have also paid the above mentioned amount of Rs 1,91,394/- which was evidently paid in cash. This is germane to the fact that, D1 has not known source of income and also failed to appear before investigation with proof of such payment. c) As per the bylaws of M/s JHCHBS, any payment for land made to the Society 10 days after the due date will attract penal interest of not less than 1%. Here, D1 paid the cost of land after good 30 years, that too without any penal interest. d) I.O., BPU, says, registration of the plot of land was probably kept pending so that it can be transferred as gift, later on, to D2. Impugned plot of land was left without constructing any building on it, since 1988, against the bylaws. D2 did not elaborate, though he claimed that he had paid stamp duty on behalf of D1 as part of a family arrangement. e) D2 challenged that stamp duty is not part of sale consideration of the property. However, on the contrary, as per the provisions of Income Tax Act, 1961, stamp duty is considered as a component for calculating capital gains on transfer of property. f) It is I.O.'s case that D2 paid stamp duty for regist....
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....nsideration received from M/s Yellow Stone to M/s Yellow Stone. m) D1 did not appear before the Initiating Officer, during the investigations. D2 also did not produce his niece before the enquiry. Therefore, a conclusion has been drawn that, D1 held the property as benamidar for benefit of D2. n) Gifting of property worth Crores of Rupees, by DI, to his aging relative also merits examination, as she herself would have benifitted from the property had she chosen to sell it. o) The submission made by D2 was wanting in strength to disprove the ongoing case that D1 acquired the property from her own source of income and held it for her own benefit. Rather, evidences appear to be tilted to the point that, the impugned property was held by Smt. B. Sirisha and D1. for not less than years for future benefits of D2. p) D2, having received the impugned property from D1, probably expected the scrutiny from Income Tax Department and therefore transferred the title to M/s Yellow Stone Estate Pvt. Ltd. without actually receiving the sale consideration. Although, cheques were issued to D2 by M/s Yellow Stone to give it a nature of genuine transaction, yet, from....
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....the case of benami transaction. The provisions of Income Tax Act cannot be made applicable on the Act of 1988. In fact, it is a fit case where personal cost should be imposed on the IO for harassment of the appellant. The IO then in Paras (f) and (g) questioned the relationship of Smt. Ch. Sirisha and the appellant and even the gift deed without giving any reason. Para (h) refers to one Shri Ramarao ignoring that he was one of the petitioner along with Smt. Ch. Sirisha before the High Court. 21. The payment of stamp duty has been taken to be the consideration paid by the appellant. The stamp duty goes to the revenue and not to the seller to take it to be the consideration. In fact, it is nothing but erroneous conclusion drawn by the respondents to somehow book the property for benami transaction. The IO then goes on the sale of property to M/s Yellow Stone where transaction for transfer of the property took place through another company M/s Avexa Corporation in order to safeguard the interest of the company due to the pending litigation. The perusal of the document would show that due to disputes pertaining to the property and pending litigation, M/s Yellow Stone made an agreeme....