TaxTMI 
TaxTMI 
2026 (1) TMI 1248
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....hipur, Khata No- 110, Plot no- 243 (Present Khata No- 166/283, Present Plot No 243/656) was held to be the Benami property. 2. The Impugned Order reveals that the Initiating Officer (IO) had initiated proceedings under the PBPT Act, 1988 on the basis of information received from the Joint Commissioner of the Income Tax (BPU), Bhubaneswar vide letter dated 12.12.2019 to the effect that Sh. Prabhakar Satpathy had purchased a property from Smt. Nirupama Swain and others for a consideration of Rs. 55,00,000/-. However, the income of Sri Satpathy was not sufficient to cover the cost of purchase. Information were also called from the six land owners for their confirmations of the receipt of sale consideration. In response to the letter dated 29.08.2022, two of the land owners namely, Sri Lalit Kumar Swain and Sri Pradip Kumar Swain submitted their replies wherein they confirmed that the value of the land was Rs. 55 lakhs. 3. Information was also called from different banks for furnishing bank statements of Sri Prabhakar Satpathy, Sri Prasant Kumar Dash and Sri Shishir Kumar Sahoo. Information received from the banks was verified and the fact that Sri Prasant Kumar Dash and Sri S....
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.... of Shri Prabhakar Satpathy that he had paid an amount of Rs. 2,25,000/- as advance money and made further payment of Rs. 5,50,000/- towards construction of boundary walls and development of roads totaling Rs. 8,75,000/- out of his own sources could not be proved. 6. It can be further seen that impugned land measuring 2 acres was finally registered in the name of Shri Prabhakar Satpathy on 10.06.2018 against the sale consideration of Rs. 50,00,000/- which was fully funded out of the money received from his nephews Shri Prasanta Kumar Dash and Shri Sishir Kumar Sahoo. The entire consideration was funded through banking channels wherein Shri Prasanta Kumar Das has paid an amount of Rs. 30,00,000/- and Shri Sishir Kumar Sahoo paying an amount of Rs. 29,63,000/- It can be mentioned that in the earlier agreement dated 26.10.2009, it was agreed upon by the parties that the sale consideration of the said land would be Rs. 27,50,000/-, however, an enhanced value of Rs. 50,00,000/- had to be made in the year 2018 due to enhanced value of the land which would have naturally increased in 9 years' time. As per the statement of Shri Prabhakar Satpathy when the land was finally registered....
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....Accordingly, the fund towards purchase consideration was provided by them and the property was registered in the name of Sri Prabhakar Satpathy, the benamidar for the future benefit of the beneficial owners. Submission of the Appellants: 10. The Ld. Counsel for the Appellants submitted that Ld. AA failed to consider the fact that the appellant no. 2 herein is registered owner of part i.e. 900 decimals of the subject property which has been purchased by him for valid consideration vide Sale Deed dated 23.12.2019. Sh. Dash being a registered owner of the part of the subject property cannot be considered to be a beneficial owner of the same. Moreover, it was also submitted that appellant no. 2 &3 herein paid the stamp duty for the purchase of .900 decimal out of the subject property, further TDS of Rs. 67,500/- u/s 194 -IA of the Income Tax Act has also been deposited for the said transaction, which has been reflected in the Income Tax Returns and accepted by the Income Tax Department. A registered owner cannot be considered to be a beneficial owner of the same property under the PBPT Act, 1988. The Alleged Benamidar i.e. Sri Prabhakar Satpathy had acquired the property out of h....
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....e PBPT Rules, which put a mandate on the Respondent/IO for attachment of any property. Submission of the Respondent: 11. The appeal was contested by the respondents and submitted that the appellant no. 1 was the benamidar and appellant no. 2 & 3 are the beneficial owners since the requirement under section 2(9)(A) of the PBPTA, 1988 has been fulfilled. The elaborate arguments were made by the respondent and would be considered while dealing with the issues raised by the appellant and thus would be referred while recording finding on each issue to avoid repetition of the same facts. Findings and analysis: 12. We have heard the arguments and perused the documents on record. 13. The present appeals concern Sh. Prabhakar Satpathy who is the alleged benamidar and Sh. Prasanta Kumar Dash and Sh. Shishir Kumar Sahoo who are the alleged beneficial owners. Sh. Prasanta Kumar Dash is represented via his legal representative Ajaya Kumar Dash. The property in question was held to be the benami property by the Ld. AA. It was held that the property had been purchased in the name of Sh. Satpathy and the consideration for the same was paid by Sh. Dash and Sh. Sahoo to the original l....
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.... another and consideration is paid by another. Merely the registration of the title is not decisive because it does not disclose the source of funds required to purchase the property as well as the real beneficiary of the property. The second limb of the statutory definition of a benami transaction also stands satisfied as appellant no. 1 transferred the impugned property to appellant no. 2 & 3, which demonstrates that the property was held for their future benefit. 16. It was also submitted by the Ld. Counsel for the appellant that the alleged Benamidar, namely Shri Satpathy, had acquired the property from his own resources and not from funds of Sh. Dash and Sh. Sahoo, and the property was never held for the benefit of any third party. This claim of the appellant that he purchased the property out of his own funds is contradicted by the documentary evidence on record. The bank statements submitted by the appellants demonstrate that the entire amount of 50,00,000/- used in 2018 for the purchase of the impugned property did not come from Sh. Sathpaty. In fact, it was sourced from his nephews, Sh. Prasanta Kumar Dash and Sh. Shishir Kumar Sahoo. Appellants also paid for the sta....
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....tands satisfied. 18. It is also submitted that the property remained in uninterrupted possession of the Sh. Prasanta Kumar Dash and Sh. Shishir Kumar Sahoo since the Agreement to Sale dated 26.10.2009, further reinforcing his de- facto and de-jure ownership. However, we could not find any documentary proof of the same on record showing possession being delivered in 2009. In fact, the transfer of the possession took place after the year 2018-2019 by way of sale deeds and therefore the possession of the property never shifted before the nephews financed the same, hence, this submission carries no merit. 19. It was also argued that the Ld. AA ignored the mandate of Sections 91 and 92 of the Indian Evidence Act, which require precedence to be given to documentary evidence over oral or inferential allegations. The said mandate of bar on oral evidence only applies between parties to a document and not against the state or in statutory proceedings or in actions involving fraudulent or sham transactions. Multiple courts have held that the PBPTA, 1988 overrides the strict documentary rule where the real ownership differs from legal title. 20. It may be true that all payments relati....