TaxTMI 
TaxTMI 
2025 (11) TMI 977
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....019 arising out of reference nos. 765/2018, 1052/2018, 1053/2018 and 1054/2018 respectively. In Appeal no. FPA-PBPT-717/KNP/2019, FPA-PBPT- 991/KNP/2019 & FPA-PBPT-992/KNP/2019 the present Appellant, Smt. Indu Srivastava is the Benamidar (BD) and her husband, Sh. Keshav Lal, is the Beneficial Owner (BO) and the following properties are held as Benami Properties respectively: i. Flat no. 201, Tower-32, Lotus Boulevard, Espacia, Sector-100 Noida which is purchased in the name of alleged Benamidar Indu Srivastava on 24.03.2017. ii. Jewellery of Rs. 3,05,26,955/- iii. Cash of Rs. 10,74,91,000/- In Appeal no. 993/2019, the present Appellant Shri Kehsav Lal is the Beneficial Owner whereas Shri Ravindra + Kumar is the Benamidar. The alleged Benamidar neither appeared before the Ld. AA nor preferred any Appeal before this Tribunal. The following property is held as Benami Property: iv. Cash of Rs. 2,81,570/- 2. As per the contention of the Initiating Officer (IO) a search & seizure operation was conducted by the Income Tax Department on 19.04.2017 at the residential premises of Shri Keshav Lal and Smt. Indu Srivastava situated at 715, Lakhanpur Hou....
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....enami Property i.e. Flat no. 201, Tower-32, Lotus Boulevard, Espacia, Sector-100 Noida. The Appellants claimed to have received gift/funds of Rs. 39,00,000/- from Late S.B. Lal, brother-in-law of Smt. Indu Srivastava Rs. 8,97,079/- from OTM Jewellery Pvt. Ltd. as commission, gift of Rs. 11,00,000/- from Shruti Srivastava (daughter of the Appellants), who had received commission income from OTM Jewellery Pvt. Ltd, funds of Rs. 11,00,000/-given directly from the bank account of SIB International, which is a proprietorship concern of Indu Srivastava, payment of Rs. 3,02,445/- made directly by Bhaskar Srivastava (minor son of the Appellants) who received funds of Rs. 1,02,486/- &Rs. 1,00,526/- from OTM Jewellery Pvt. Ltd and amount of Rs. 35,00,000/- received from Bajpai Refrigeration & Bakers Co. With regard to jewellery worth Rs. 3,05,26,955/-, it was submitted that the Appellants and her family held jewellery of 13.2 Kg. of gold before the year 2010. Certain amount of jewellery weighing 1731 gms were purchased during F.Y 2016-17 and certain jewellery of 2550 gms belonged to various other persons. With respect to cash amount of 10,74,91,000/-, it is submitted by Shri Indu Sriva....
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.... the PAO dated 28.03.2018 and 25.07.2018. The Ld. AA further held that Sh. Ravindra Kumar was not the actual owner of the impugned property i.e. cash of Rs. 2,81,270/- which actually belonged to Shri Keshav Lal who claimed to it belong to Sh. Ravindra Kumar. Accordingly, the Ld. AA agreed with the findings of the IO and confirmed PAO dated 25.07.2018. Submission of the Appellants: 8. The Ld. Counsel for the Appellant contended that the impugned order u/s. 26(3) was passed by the Ld. AA after the statutory time limit prescribed u/s. 26(7) of PBPT Act, 1988 which expired on 30.04.2019 and 31.08.2019. Neither the order was pronounced in open court nor had been released by the Ld. AA prior to that date. Therefore, the order u/s. 26(3) is time barred as per law and thus liable to be quashed. It is also contended that the entire proceedings under the Act are against the provisions of law and void ab-initio since impugned property i.e. Flat no. 201, Tower-32, Lotus Boulevard, Espacia, Sector-100 Noida was purchased on 31.03.2017. The alleged benami property held by Smt. Indu Srivastava as BD is against the provisions of section 3(2) of the Act as prevailing at the time of purchas....
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....ther stated that the funds in cash were delivered at her house for the purpose of safe custody. The Appellants also contended that "cash" cannot be considered as "consideration" for the purpose of satisfying the ingredients of section 2(9)(A). 10. The Ld. Counsel for the Appellants also contended that the impugned properties are not benami in view of the exception provided under clause (iii) to section 2(9)(A) of the Act as amended by the Benami Transaction (Prohibition) Amendment Act 2016 which came into effect w.e.f. 01.11.2016. The Ld. AA has erred on facts and in law in passing the impugned order u/s. 26(3) of the Act by holding the impugned properties as benami without satisfying the ingredients of section 2(8) r/w section 2(9) of the Act and has illegally confirmed the PAO. 11. The Appellants also argued that the Show Cause Notice u/s. 24(1) as well as PAO u/s. 24(4) of the Act and all proceedings under the Act are liable to be quashed as the Respondent exercised jurisdiction to make inquiry and investigation under the Act without prior approval u/s. 23 of the Act which is a mandatory statutory requirement to make any inquiry or investigation under the Act, including pr....
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....rovided by the alleged beneficial owner. Therefore, the impugned property being cash, the ingredients of sec. 2(9) w.r.t consideration of impugned property being "cash" are not satisfied and even not spelt out in the present facts of the case and therefore the impugned order of Ld. Adjudicating Authority holding the impugned cash as benami property u/s. 2(9) of the Act is grossly illegal, arbitrary and against the authority of law. 13. It was also submitted that for invoking sec 2(9) of the Act, it is absolutely essential and sine qua non of the concept of Benami Transaction that the benami property is necessarily to be held by the benamidar for the benefit of some beneficial owner. In the present facts of the case, the impugned cash was, never held by the alleged benamidar but was held and possessed by the alleged beneficial owner/ the Appellant Shri Keshav Lal. Moreover, the provisions of sec 2(9) can be invoked only in case of a property of such nature where ownership is identifiable by any documentary evidence such that it can be said to be held by someone by apparent title, whereas the beneficial ownership is vested with some other person. This essential ingredient of a ben....
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....nserted by Act 23 of 2019, S.173 (w.r.e.f. 01.11.2016). The Respondent relied on the judgement of the Hon'ble Supreme Court in ITO Vs. Purushottam Das Bangur & others, 224 ITR 362(SC) & Income Tax Officer, Calcutta v. Selected Dalurband Coal Company Pvt. Ltd 1997 (10) SCC 68. 16. The Respondent also contended that in the instant case the property under consideration had been purchased through sale deed dated 31/03/2017. Thus, the erstwhile provisions of section 3(2) of PBPT Act 1988 omitted with effect from 1-11-2016 through Amendment Act 2016 are not applicable to the instant case. 17. The Respondent further contended that the reasoning of the Appellants regarding the sources of income of the Appellant has been explained as cash deposits or accommodation entries. None of such persons has been ever produced for examination though it was specifically required. 18. The Ld. Counsel for the Respondent has also contended that it is evident that the impugned property under reference was purchased in the name of Smt. Indu Srivastava who did not have any genuine source of income and the sources utilized for acquiring aforementioned property were not verified. The credit transfers ....
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....al and the property is held for his immediate or future, direct or indirect benefit, clause (A) was applicable. In case, the person providing the consideration is not traceable or is fictitious, clause (D) was applicable. In any case, it was a benami transaction and the notice was rightly issued. In this regard, the Ld. Counsel for the Respondent has relied upon the following ITO Vs. Lakhmani Mewadas, 1976(3) SCR 956, Mohammad Aslam Merchant v. Competent Authority, [(2008) 14 SCC 186]. It is settled law that mere non-mentioning of the specific clause, does not make the reference invalid. In the Provisional Attachment Order, there is clear mention of Section 2(9) and it is not material that clause (A) or (D) is not mentioned, as it is a case where section 2(9)(A) and alternatively section 2(9)(D) is applicable. It does not make the order invalid. Non-mentioning of a provision does not invalidate an order if the court and/or statutory authority had the requisite jurisdiction. 21. It is clear that the investment in the property has not been made out of the sources of Smt. Indu Srivastava. The circumstantial evidences clearly indicate that the purchase money has come from Shri Kesha....
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....at cash cannot be attached u/s. 24 of the PBPT Act as the same is governed by the provisions of section 132B of the Income Tax Act would not be tenable where the property is found to be benami, it shall be subject to the attachments as provided under the provisions of PBPT Act. There is no such restriction under the PBPT Act that such cash cannot be attached u/s. 24 of the Act. Section 132B of the Income Tax Act speaks of application of the seized assets for the purpose of the liability of the Income Tax etc., which will be determined when the assessment of income is made. Such liability has to be discharged disregarding the fact whether any asset is seized or not. It is also submitted that Shri Ravindra Kumar is working as cook cum servant for Shri Keshav Lal and he has also not claimed the cash so found belongs to him as well as rejected the claim of Shri Keshav Lal in his statement under oath recorded. Further, the summons u/s. 19 of PBPT Act, 1988, was issued to Shri Ravindra Kumar in compliance of which he filed his reply through speed post stating that "Cash so found of Rs. 281,570/- in the residence of Shri Keshav Lal during the search operation is not related to me in any m....
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....e not filed any registered sale deed, instead, a copy of a Sub-Lease Deed dated 27.03.2017 has been annexed, which has been erroneously referred to as a purchase deed. Further, the date of Lease/ Sub-Lease cannot be termed as the date of purchase. In the given circumstances, none of the judgements relied on by the Appellants in the matter of Nand Kishore Mehra v. Sushila Mehra SC dated 02.07.1995 (1995(4) SCC 572) and in the matter of CIT v. K Ramakrishnan Del HC ITA 114/2014 dated 18.03.2014 has application to the facts and circumstances of the present Appeal. 27. The Appellants have also taken the ground that since the flat was acquired prior to 01.11.2016, so they are covered by the judgement of the Hon'ble Supreme Court in the case of UOI v. Ganpati Dealcom Pvt. Ltd. holding the amendment Act 2016 prospective. We are unable to accept this contention, on the ground that the judgment in question has already been recalled by the Hon'ble Supreme Court, and therefore, it no longer retains any binding force. Moreover, the immovable property has been purchased in the year 2017 (supra), so, the PBPT Act, 1988 as amended in the year 2016 is squarely applicable to the present case. Th....
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....s not aid the claim of the Appellants. The confirmation letter provided by OTM Jewellers and brother-in-law of Indu Srivastava, Late S.B Lal, are not verified/stamped documents and hence, their authenticity remains doubtful. 30. With respect to jewellery worth Rs. 3,05,26,955/-, the Appellants have annexed certain kuchha and pucca bills to show the purchase. However, on perusal of the same, it is seen that only three pucca bill (or official invoice) has been annexed, the rest of them are kuchha bills (or informal bills) which can be easily created by anyone and therefore, does not prove the authenticity of the purchase. 31. With respect to the cash of Rs. 10,74,91,000/- found in the possession of Smt. Indu Srivastava, it has been claimed that it belongs to three persons who delivered the cash at her residence as a result of MOA signed with them on 27.03.2017. However, the Appellants have annexed no documentary evidence explain the genuineness of such huge cash found in her possession. Moreover, the persons who are party to the said MOA have not come on record to ascertain the veracity of this claim. 32. The order of the Income Tax Settlement Commission dated 15.12.2023 has....
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....tion, this contention of the Appellant is rejected with respect to property at serial no. (iii) and (iv) (supra). In case of the impugned property at serial no. (iv) (supra), it is further contended that the property was "held and possessed" by the Appellant himself, and hence cannot be termed as "benami property". The requirement to hold any property as a "benami property is that it is held by one person and the consideration for such property is provided by another person. It is immaterial as to who holds the physical possession at the time of discovery. In the present case, Appellant Shri Keshav Lal attempted to project that the cash property of Rs. 2,81,570 belonged to his servant, thereby creating a facade of ownership in the name of another. This constitutes an arrangement under the PBPTA Act, 1988 whereby the property is held in the name of another person but the beneficial interest lies with the real owner. Hence, this contention of the Appellant is also rejected. 36. The Appellant also argued that since the cash is seized under Section 132 of the Income Tax Act and deposited in the PD account, the attachment under PBPTA, is unsustainable. Section 132B of the Income T....
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....s legally acquired property. 39. The Appellants have also contended, with respect to all the properties, that nothing has been placed on record to show what was the nature of "transaction or arrangement" between the Appellants Shri Kehsav Lal and Smt. Indu Srivastava as well as between Appellant Shri Keshav Lal and Shri Ravindra Kumar and what was the "consideration" against the impugned property alleged to have been paid by Shri Keshav Lal. Since, the ingredients of section 2(9) are not satisfied, therefore, the properties cannot be held as Benami. Section 2(9) is reproduced below: Section 2 (9) of the PBPT Act, 1988 as amended provides as follows: "2(9) "benami transaction" means,- (A) 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 for the immediate or future benefit, direct or indirect, of the person who has provided the consideration, except when the property is held by- (i) a Karta, or a member of a Hindu undivided family, as the case may be, and the property is ....
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....pposed to provide or pay the consideration for the property and such property is held by another person for the immediate or future benefit, direct or indirect, of the person who has provided the consideration. In the present case, it is evident from the material on record that the transactions in question constitute an 'arrangement' within the meaning of Section 2(9)(A) of the PBPT Act 1988. The properties have been purchased in the name of Smt. Indu Srivastava, whereas the consideration for the same has been provided by her husband, Shri Keshav Lal, from undisclosed and unaccounted sources. The explanation offered by Smt. Indu Srivastava regarding the sources of funds, purportedly in the form of gifts, commissions, and family contributions, is not supported by credible documentary evidence. The allegations that the syndicate bribes Shri Keshav Lal a fixed amount of money on a regular basis and the patter of financial flow that has led to the accumulation of huge properties in name of Smt. Indu Srivastava clearly indicate a pre-meditated 'arrangement' whereby the apparent ownership was placed in the name of the wife to conceal the beneficial ownership of the husband. The transacti....
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....ve not originated from any independent, legitimate, and verifiable source of income. Hence, the statutory exception under clause (iii) stands inapplicable 42. It is evident that the property bearing No. 201, Tower-32, Lotus Boulevard, Espacia, Sector-100, Noida, though registered in the name of Smt. Indu Srivastava, was purchased out of the undisclosed and unaccounted income of her husband, Shri Keshav Lal. The alleged Benamidar, Smt. Indu Srivastava, has failed to demonstrate any legitimate source of income commensurate with the value of the said property or the other assets seized during investigation. Her income-tax returns reveal an aggregate income of approximately Rs.50 lakhs, which is grossly disproportionate to the value of the assets found in her name, including cash exceeding Rs.10 crores and jewellery worth over Rs.3 crores. 43. Furthermore, Section 2(9)(A) of the PBPT Act clearly envisages a situation where property is held by one person for the immediate or future benefit, direct or indirect, of another person providing the consideration. The relationship of husband and wife, by its very nature, involves a certain degree of trust and informal arrangement. The all....