TaxTMI 
TaxTMI 
2026 (2) TMI 795
X X X X Extracts X X X X
X X X X Extracts X X X X
.... 2. The properties were purchased in the name of individuals on payment of consideration by M/s Padmavati Marbles Pvt. Ltd., thus, was taken to be a case of benami transaction and accordingly properties in the name of benamidars were provisionally attached. Arguments of the Ld. Counsel for the appellants: 3. Ld. Counsel for the appellants submitted that the purchase of property was part of the business of M/s Padmavati Marbles Private Limited. An agriculture land was existing in the name of Reserved caste candidate and as per the provisions of the Revenue Laws of the State of Rajasthan, it could not have been purchased by the candidate other than of the Reserved caste. Looking at the rider under the laws, the land existing in the name of Reserved caste candidate was purchased in the name of the candidate of the same caste by inducing the money by the company under the business arrangement. It has taken to be a case of benami transaction ignoring the sequence of events and even the reason to purchase the property in the name of Reserved caste candidate. The agriculture land could not have been registered in the name of a general caste candidate or a candidate other than of t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....aving sufficient income to purchase the land. The transfer of the consideration by the appellant company to the employee was in fiduciary capacity and hence interference in the impugned order be made. 6. Ld. Counsel for the appellants did not raise any other issue than referred to above. It is despite an opportunity to raise any other legal or factual issues. Ld. Counsel for the appellants closed his arguments with the prayer to cause interference in the impugned order in reference to the issue raised by him. Arguments of the Ld. Counsel for the respondent: 7. Ld. Counsel for the respondent vehemently contested the appeals and submitted that the fact of the case reveals to be a benami transaction. The property has been purchased in the name of the benamidars of which consideration was paid by the beneficial owner for its future benefit. The fact on record shows that consideration towards purchase of property was made by M/s Padmavati Marbles Pvt. Ltd. and the land was registered in the name of the benamidars. After conversion of the land, the appellant company sought the land in its name. It was nothing but a benami transaction for its future benefit. The ingredients of Se....
X X X X Extracts X X X X
X X X X Extracts X X X X
....eration for such property has been provided or paid out of the known sources of the Hindu undivided family; (ii) a person standing in a fiduciary capacity for the benefit of another person towards whom he stands in such capacity and includes a trustee, executor, partner, director of a company, a depository or a participant as an agent of a depository under the Depositories Act, 1996 (22 of 1996) and any other person as may be notified by the Central Government for this purpose; (iii) any person being an individual in the name of his spouse or in the name of any child of such individual and the consideration for such property has been provided or paid out of the known sources of the individual; (iv) any person in the name of his brother or sister or lineal ascendant or descendant, where the names of brother or sister or lineal ascendant or descendant and the individual appear as joint owners in any document, and the consideration for such property has been provided or paid out of the known sources of the individual; or (B) a transaction or an arrangement in respect of a property carried out or made in a fictitious name; or (C) a transacti....
X X X X Extracts X X X X
X X X X Extracts X X X X
....company. A justification of the transaction in the name of a person of which consideration was paid by others was tried to be given. We are not in a position to accept the argument aforesaid. If the Revenue Laws prohibit transfer of the land by Reserved caste candidate to other caste candidate, it does not mean that the appellant and for that anyone would involve itself for purchase of property by creating a benami transaction. The reason for the purchase of the property in the name of the Reserved caste candidate does not nullify the provisions of the Act of 1988, rather, in view of the statement of the appellant, no reason remains to cause interference in the impugned order because transaction is falling under Section 2(9)(A) of the Act of 1988 without any exception. That being the position, the Adjudicating Authority rightly confirmed the provisional attachment of the property. 13. The issue now remains that prospective application of the amended Act of 2016. It is no doubt that the Apex Court in the case of Ganpati Dealcom (supra) applied the amending Act of 2016 with prospective application but that judgment has been recalled by the order dated 18.10.2024. Thus, the issue n....
X X X X Extracts X X X X
X X X X Extracts X X X X
....it will fall under the definition of "Benami Transaction". The consideration of definition of "Benami Transaction" by dividing it into two parts was not made earlier. 38. In the case of Nexus Feeds Limited & Others (Supra), we do not find a specific argument in reference to holding of property by a person of which consideration was paid or provided by another person. 39. For the aforesaid purpose, we refer para 69, 69.1, 70, 71, 73 and 93 of the said judgement and are quoted here under. 69. We have already noted above as to how the definition of benami transaction as finding place in the unamended 1988 Act has undergone a qualitative change post the Amendment Act of 2016. Under Section 2(a) of the unamended 1988 Act, benami transaction was defined to mean any transaction in which property is transferred to one person for a consideration paid or provided by another person. Thus, for a transaction to come within the ambit of benami transaction under the unamended 1988 Act, it must be a transaction in which property is transferred; such property must be transferred to one person by another person; and such transfer of property must be for a consideration pai....
X X X X Extracts X X X X
X X X X Extracts X X X X
....or indirect. It is equally significant to note that under the unamended 1988 Act there was no definition of 'benamidar' and 'beneficial owner'. These two expressions are defined under the Amendment Act of 2016 and must be read in conjunction with the new definition of benami transaction as provided in Section 2(9). Benamidar is the person, real or fictitious, in whose name the benami property is transferred or who holds such benami property; this would include a person who lends his name to such transfer or holding of benami property. Again, beneficial owner means, the person for whose benefit the benami property is held by a benamidar, whether his identity is known or not. 73. From the above analysis, it is beyond any doubt that Section 2(9)(A) and Section 2(9)(C) are substantive provisions, inasmuch as if a transaction or an arrangement comes within the ambit of the aforesaid two provisions, then it would be a benami transaction which is not only prohibited under Sub Section (1) of Section (3) but is also an offence punishable under Sub-Sections (2) and (3) thereof as well as under Section 53 of the 1988 Act as amended. It is interesting to note that unde....
X X X X Extracts X X X X
X X X X Extracts X X X X
....enami Transaction". But, the specific argument in reference to holding of the property by a person whose consideration was paid or provided by another person was not raised rather emphasis was in regard to the transfer of the property prior to the amendment by the Amending Act of 2016. The specific argument aforesaid was not raised even before us in any of the appeals decided by this Tribunal earlier rather the decision therein was based on the admission of the counsel for the respondents that Benami Transaction involved therein was of the period prior to 01.11.2016. The orders were passed on the admission of the parties that Benami Transaction is prior to 01.11.2016. 41. In the instant case, a contest was made by the counsel for the respondents who submitted that if anyone is holding a property after the amendment by the Amending Act, 2016 though transfer of property is prior to 01.10.2016, such a transaction would fall in the definition of "Benami Transaction" as given under section of 2(9)(A) of the Act of 2016. 42. We find force in the arguments of the learned counsel for the respondents. The Tribunal or for that even a court cannot ignore the statutory provis....
X X X X Extracts X X X X
X X X X Extracts X X X X
....or fictional, in whose name the Benami property is transferred or who holds such Benami property. 49. The conclusion therein are against the appellants who referred subsequent paras, which are literally based on the admissions of the party where it was agreed that the Benami Transaction was of the period prior to the amendment by the Amending Act, 2016. That being the position, the judgement supra, does not support the appellant. 50. The appellants have referred to the judgement of the Apex Court in the case of Suresh Seth (Supra). It is to submit that there cannot be a continuous offence. If the offence is committed on a particular day, it ends on the same day. The arguments have been made in the ignorance of the facts in the case of Suresh Seth. If an offence is complete in all respect on a particulars day or days, then obviously the judgement in the case Suresh Seth (Supra) would apply. It would however depend on the nature of the offence and even the provision. In the instant case, the definition of "Benami Transaction" has two parts. One is on the transfer of the property and another on its holding. The use of the word "held" under section 2(9)(A)(a) is of si....