TaxTMI 
TaxTMI 
2026 (5) TMI 211
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....ing Officer, Benami Prohibition Unit, Kanpur that A/c No. 05190100000698 maintained with J&K Bank, Ghaziabad, pertaining to M/s. Shyama Trading Company, Prop. Shri Ghanshyam Patel had been used for deposit of the de-monetized currency to the extent of Rs. 50,00,000/-, which was subsequently transferred to five other accounts, including the account of the present appellant. Shri Ghanshyam Patel in his statement recorded u/s. 134(4) of the Income Tax Act, 1961 during the course of search on 18.01.2017 informed that the transactions in the said bank account of M/s. Shyama Trading Company have not been made by him, but it is done by Shri Rahul Choudhary, who obtained pre-signed cheques of Shri Ghanshyam Patel. He also stated that the deposits made in the account of M/s. Shyama Trading Company after 01.11.2016 was not belonging to him. In view of the facts & material available in the possession of the Initiating Officer, he had reason to believe that Shri Ghanshyam Patel was a benamidar within the meaning of Section 2(10) of the PBPT Act, in whose name benami transactions were made through the Bank account of M/s. Shyama Trading Company and thereafter the amount was transferred to....
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....so provisionally attached to protect the siphoned amount of Rs. 50,00,000/-. The said Provisional Attachment Order was stated to be passed by the Initiating Officer with prior approval of the approving authority i.e. JCIT (BPU), Kanpur. Thereafter, Reference no. R-87/2017 was sent to the Adjudicating Authority for confirmation. The Adjudicating Authority being satisfied with the allegations made in the reference along with the relied upon documents, issued the notices to benamidar, Shri Ghanshyam Patel and beneficial owner Smt. Sheetal Chandna. They filed their respective replies which are reproduced in para 14 of the impugned order from page 16-33. The rejoinder filed by the Initiating Officer is also reproduced in the said para from page 34-46. After hearing the rival submissions, the Adjudicating Authority set aside the attachment qua the immovable properties, except the attachment of the bank account for recovery to the extent of Rs. 50,00,000/-, which was confirmed and thereby reference was partly allowed. Aggrieved by the said order, beneficial owner, Smt. Sheetal Chandna filed the present appeal and the cross appeal is also filed by the Department against the imp....
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....y notes does not constitute property, within the meaning of Section 2(26) of the PBPT Act. Even otherwise, the deposit of cash in the third party's account do not constitute benami transaction as defined in Section 2(9)(A) of the PBPT Act which provide that the following conditions must be fulfilled cumulatively. (a) Where the property is transferred, or is held by a person, and further 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, directly or indirectly of the person who has provided the consideration. He stressed that the Adjudicating Authority erred in ignoring the following guidelines laid down by the High Court and the Supreme Court of India for treating a particular transaction as benami transaction, as mentioned below: - The burden of showing that the transfer is a benami transaction lied on the person who asserts that it is such a transaction. If it is provided that the purchase money came from a person other than the person in whose favour the property is transferred, the purchase is prima facie assumed to be for the benefit of the per....
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....:- 12. We note that out of the total sale consideration of Rs. 70.77 Lakhs for the impugned property only Rs. 9 Lakhs was paid by the alleged Benamidar. The interested party M/s ICON Constructions has also maintained that the Benamidar has not acquired any rights, interest and title to the impugned property. Therefore, M/s ICON Constructions continue to remain owner and in possession of the impugned property. In view of this, the applicability of Section 2(9)(A) is doubtful as neither the impugned property was transferred to the alleged Benamidar nor the impugned property was held by the alleged Benamidar. Even if we accept that there were cash infusions into the bank accounts of the alleged Benamidar, there is no evidence on record as to show that such infusions were made by the Beneficial Owner. iii) In case Ranjana Roy v. Initiating Officer, Appeal no. FPA-PBPT- 2420/KOL/2025 passed by this Appellate Tribunal on 12.02,2026, wherein it is held as under:- 8. On the basis of the aforementioned verification exercise, It is clear that the seized Jewelleries were not being held as benami by the alleged Benamidar Smt Ranjana Roy. Even for the four items of Je....
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....as handed over to Sh. Ghanshyam Patel. He deposited the demonetized currency on different dates in the account of his proprietorship concern M/s Shyama Trading Company. Therefore, there is clear transfer/holding of the amount with M/s Shyama Trading Company on behalf of the appellant and thereby, lend his name to the said cash. Accordingly, respondent no.2 M/s Shyama Trading is clearly a Benamidar in present case. Now, coming to the definition of "Benami Transaction" as defined u/s. 2(9)(A) of the PBPT Act, same is reproduced as under: (a) Where the property is transferred, or is held by a person, and further 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, directly or indirectly of the person who has provided the consideration. Clause (a) of Section 2(9)(A) has two parts. As far as first part of clause (a) is concerned, the same is already discussed by us in the definition of "benamidar". Now coming to second part of clause (a) (further the consideration for such property has been provided, or paid by another person), we are of the view that cash is a pure l....
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....denomination currency notes to another to get currency notes of small denomination; giving cash to another to keep it in safe custody for some particular period (under apprehension of raid or anything) and to return on demand; Indian Govt. Currency with any Foreign Currency; to change the demonetized currency notes to new currency notes; loan with or without interest etc. Therefore, where cash is involved, we cannot segregate the word 'consideration' in the form of cash, from the word 'property' in the form of cash. Hence, under this situation both the words consideration and property stand merged with each other and are interchangeable. In the present case, admittedly the cash of Rs. 50 lakhs was provided by the beneficial owner to Sh. Ghanshyam Patel of M/s Shyama Trading Company. Even otherwise, said cash was deposited by the benamidar in his bank account which was given by the beneficial owners and at this stage of transition, the demonetized cash of appellant becomes consideration and the amount held in the bank account of the benamidar becomes the property. Therefore, both the parts of clause (a) of section 2(9)A of PBPT Act, are discernible. Now, coming to clause (b) o....