APPELLATE TRIBUNAL,
MUMBAI
DY. COMMISSIONER OF
INCOME TAX VS M/S. MANPREET ESTATES LLP
26TH MARCH, 2019
Date: 26.03.2019
MP-PBPT-163/MUM/2019(Stay)
FPA-PBPT-206/MUM/2018
1. The
Appellanthas filed an appeal against impugned order dated 24.10.2018 passed
under Section 26(3) of the PBPT Act arising out of Reference No. 198/17 filed
by the Initiating Office upon informationreceived from Investigation
Directorate, Mumbai as the I.O, Mumbai, BPU-2, on the basis of information
received from Investigating Directorate, Mumbai proceeded with reference
whereby it was contended that therespondent no.1 is benamidar as actual
benefits from the immovable property held by it accrued or would accrue to the
respondent no. 2.
2. As per the
case of appellant, Manpreet Estates LLP is the Benamidar and RKW Developers
Private Limited is the beneficial owner.
3. The brief
facts are that the respondent No 1 purchased ten residential flats at New Urmila
CHS Limited, 19th Road Khar West, Mumbai for total consideration of Rs. 95.25
Crores. All of these ten flats are part of one single building i.e. Urmila CHS
Ltd. which was constructed on land admeasuring 608.64 Sq. Mtrs. and 656.11 Sq.
Mtrs. and situated at plot of land bearing C.T.S. No. D/900/A/3 Survey No.
637/638 of Suburban Scheme VII (Khar), Khar (West), Mumbai. The said properties
have been purchased by the respondent no. 1 from ten persons on 17.01.2017
consisting of 5 individuals and 5 companies.
4. It is alleged
by the appellant that these 5 individuals and the Directors of these 5
companies are dummy directors of these companies and dummy owner of the
properties. The individuals and directors of these companies are employees of
the respondent no. 2. They were not aware of any details, transactions or day
to day functioning of the companies, though they are the directors of the said
companies, which were handled by Mr. SachinPathak and Mr.Hemant Bhatia, who are
in turn the accountants of M/s RKW Developers Private Limited and related
concern. Both Mr. SachinPathak and Mr. Hemant Bhatia are employees of Wadhawan
Group and are managing and controlling these companies on the instruction of
Mr. HitenSakhuja, a relative of the promoters and directors of the Wadhawan
Group companies.
5. It is
admitted on behalf of the appellant that the entire transaction of purchase of
properties by the respondent no.1 from the aforementioned ten parties has been
funded by M/s Dewan Housing Finance Limited (DHFL). The respondent no. 2 and
DHFL are related to each other by means of common promoters and directors and
also have common office addresses. The properties were purchased/registered by
the respondent no. 1 on 17.01.2017 and whereas the loan was sanctioned to it by
DHFL on 18.01.2017. The funds received by the ten parties as consideration for
sale of the properties were immediately transferred directly or through
intermediates to different concerns which were controlled and managed either
directly by respondent no. 2 or through its related entities.
6. It is argued
that though the reference forwarded by DDIT(Inv.)-8(1), Mumbai stated 10
original owners, who sold the properties to respondent no. 1, as
benamidar&respondent no. 2 as beneficial owner, the IO is not bound by
the reference and has to form his own belief under PBPT Act‟ 1988. It is
submitted that on the basis of the information and material available the I.O.
formed a reason to believe that the respondent no.1 is benamidar as actual
benefits from the property accrued or would accrue to the respondent no. 2 only
and accordingly recorded reasons before the issue of notice u/s 24(1) of the
PBPT Act, 1988.
7. It is stated
on behalf of the appellant that the respondent no. 1 has been purchased from
the erstwhile partners of partnership firm on 13.12.2016 i.e. only about a
month before the purchase of the properties and taken over by Shri RajenDhruv
and Shri Kishore Parekh as partners. It is alleged that Benamidar had no major
assets or business. It is stated that though DHFL is listed having 60% of
public holding, the key factor remains that day to day management is under the
control of the members of the Wadhwan family, who are the main persons in
decision making and also are involved in the management of the respondent no. 2
and the other group companies. The respondent no. 2 was involved in the scheme
of purchase of flats by the respondent no 1 for redevelopment since beginning
as evident from the fact that even the fees for filing forms with RoC with respect
to change in the partnership agreement and the appointment of present partners
in the respondent no. 1 was paid by the respondent no. 2. Mere approvals in the
name of benamidar do not prove in any way that the benefits from the property
are actually enjoyed by it and not by the beneficial owner as there is an
active financial relationship between the respondents as evident from the bank
statement as even after availing loan from DHFL, the respondent no. 1 received
huge amounts of money from respondent no. 2 which it used for the development
of property, thereby establishing that the respondent no. 2 is directly
involved in the development of project in order to derive future benefits
arising out of the same. The person providing the consideration i.e. DHFL and
person reaping the benefits of such transaction i.e. respondent no. 2 are same
as they are linked to each by means of common directors and promoters.
8. It is
submitted on behalf of appellant that the benefits to the beneficial owner
arising out of property held in the name of the benamidar need not be direct
and immediate and that indirect and future benefits are also covered under the
definition of a benami transactions under section 2(9)(A) of the PBPT Act,
1988, therefore, the Adjudicating Authority thus erred in setting aside on
merits the order u/s 24(4) of the PBPT Act‟ 1988 passed by the IO holding
respondent no 1 as the benamidar and respondent no 2 as beneficial owner. There
being a statutory power vested with the adjudicating Authority by virtue of
Section 11 PBPT Act, the strict rules of evidence may not apply, whilst the
Authority needs to weigh and shift the material placed before it with
preponderance of probabilities coupled with circumstances, motives (if any) and
object of undertaking a benami transaction.
9. It is alleged
that the burden of proving, that a particular property is Benami or a person is
Benamidar/beneficial owner/interested party, is upon the Initiating Officer
alleging the same and such burden has to be strictly discharged based on legal
evidence. Hon‟ble Supreme
Court and High Courts have consistently held that the burden of proving that a
particular property is Benami and apparent purchaser is not the real owner
always rests on the person who asserts it to be so. The reliance has been
placed on JaydayalPoddarVs. BibiHazra AIR, 1974 SC 171and Bhim Singh
&Anr. Vs. Kan Singh 1980 AIR 727, 1980 SCR(2) 628 andBinapani Paul Vs.
PratimaGhosh&Ors. on 27th April, 2007 Appeal (Civil)8098 of 2004.
10. But, the
above mentioned case laws have been laid in relating to Benami Property are
prior to the enactment of the Prohibition of Benami Property Transactions Act,
1988, as amended by Act No. 43 of 2016. The saidcase laws have been decided in
civil matters in respect of the title owner and the real owner of the property
prior to amendment.
11. The subject
matter of the reference was the transaction for the purchase of piece and
parcel of land, admeasuring 608.64 sq. mts. and
656.11 sq. mts.
bearing CTS No. D/900/A/3 and Survey No. 637/638 of Suburban Scheme VII, Khar
West, Mumbai (hereinafter referred to as the “said Property”).
12. The brief
facts as per respondent no. 1 (for short R-1) are as under:-
a) Mr. Rajen
Dhruv is one of the partners of R-1 and is also the promoter of Midcity Group
which is known for its quality of construction and completing projects within
timelines. Mr. Dhruv is the CEO and MD of Midcity Group and controls key
departments viz. legal, corporate planning, land acquisition, construction,
marketing and finance, etc. Mr. Dhruv looks after the finance of the Midcity
Group as he is well acquainted with various financial institutions, including
Altico Capital India Private Limited, India Bulls Housing Finance Limited,
India Infoline Finance Limited, Punjab National Bank, Union Bank of India,
Kotak Mahindra Bank, Punjab & Maharashtra Co-operative Bank Ltd. and
DHFL, as he has in the past raised funds from them for his other projects, in
the ordinary course of business.
b) The Midcity
Group has over two decades of experience in the Real Estate and Infrastructure
space. Midcity Group has completed around 28 projects till date in the City of
Mumbai Suburban. Presently there are numerous other ongoing projects with
saleable area admeasuring approximately 1.5 million sq. ft.
c) In or about
October 2016, Mr. Dhruv came to know about a property situated at Khar (West)
which was available for re- development. Finding the property ideal and
feasible, Mr. Dhruv decided to purchase the flats and initiate re-development
on the said Property.
d) At the
relevant time, all the other entities in which Mr. Rajen Dhruv was either a
partner/director were the entities/partnership forming part of the Midcity
Group and were engaged in redevelopment of various other projects. Therefore,
Mr. Dhruv thought that a separate entity, in which Mr. Dhruv and his relative
Mr. Kishore Parekh would be partners, would be a suitable entity to undertake
development of the said Property after purchasing the same. Mr. Kishore Parekh
agreed to the aforesaid arrangement.
e) Mr. Dhruv had
raised funds from DHFL for his other projects also and in November 2016, Mr.
Dhruv once again approached DHFL for the purpose of raising funds in order to
redevelop the said Property. Since Mr. Dhruv was looking after the finance of
the Midcity Group, he approached and negotiated with DHFL for the purpose of
raising funds for the said Property. Meetings were held with the representatives
of DHFL when the documents/deeds with respect to the said Property and the
flats were handed over to them and it was agreed that the loan will have to be
secured by creating a charge.
f) In the
meanwhile, Mr. Dhruv through his common friend met Ms. Tabassum Wajeda Mohammed
Abid and Mr. Haroon Rasheed who are the erstwhile partners of R-1 i.e. Manpreet
Estates LLP, when he became aware that the R-1 was in the business of
properties, real estates, developing building, act as contractors, etc. upon
discussing the matter with the erstwhile partners, Mr. Dhruv realized that they
were desirous of dissolving the R-1 as they could not carry on the business for
which R-1 had been incorporated. Further, R-1 also did not have any other
assets /liabilities of its own. Since Mr. Dhruv intended to acquire the said
Property in a new entity, he was of the view that it would be appropriate to
acquire the same in R-1 as its objects met with his requirements. Mr. Dhruv
also discussed the modalities of taking over R-1 with a view to acquire the
project of redevelopment in the firm. Discussions and negotiations were held
with the erstwhile partners and pursuant thereto on 16th December 2016, an
agreement was entered wherein Mr. Rajen Dhruv and Mr. Kishor Parekh were
inducted as partners of R-1 with effect from 12th December 2016 and the
erstwhile partners retired from R-1.
g) The
understanding arrived at between the parties was that R-1 shall raise money
from banks/financial institution for payment of consideration. In order to safeguard
the interest of the flat owners, it was also agreed that the physical
possession of the flats would be taken only once the cheques are encashed.
h) During the
said period, R-1 was also in process of complying with the requirements of DHFL
with respect to raising a loan and creation of mortgage. It was only after the
requisite compliances were followed by R-1 that on 4th January 2017, DHFL
issued its in- principle approval to the loan. It was only on the basis of the
in- principle approval that R-1 proceeded to execute and register the
agreements with various flat owners in the building on 13th January 2017 and
registered the same on 17th January 2017. All the vendors were paid valuable
consideration and requisite stamp duty was also paid on all the agreements. The
total consideration paid by R-1 to all the flat owners and the owner of the
land is approximately about Rs. 111,32,00,000/- (Rupees One Hundred and Eleven
Crores Thirty Two Lakhs Only) and the total amount paid towards stamp duty by
R-1 was approximately about Rs. 5,56,60,500/- (Rupees Five Crores Fifty Six
Lakhs Sixty Thousand and Five Hundred Only).
i) That
accordingly, on 19th January 2017, a mortgage deed (appended in the along with
reply filed before the authority) was executed and registered by and between
this R-1 (therein referred to as the Mortgagor) and DHFL (therein referred to
as the Mortgagee) on the terms and conditions stated therein.
j) Subsequent to
the registration of the documents, R-1 took following steps towards redevelopment
of the said Property:
i) On 6th
February 2017, R-1 through its Architect filed an application with the Chief
Executive Officer, Slum Rehabilitation Authority and submitted a proposal under
regulation 33(14) for acceptance (Appended in the reply filed before the
Adjudicating Authority).
ii) On 7th April
2017, the Chief Executive Officer, Slum Rehabilitation Authority accepted the
proposal for S. R. Scheme submitted by R-1 under Regulation 33(14) (D) read
with (E) and (F) subject to certain conditions. (Appended in the reply filed
before the Adjudicating Authority).
iii) On 12th
December 2017, Slum Rehabilitation Authority accepted the proposal of clubbing
and issued an in principle approval to the scheme in the form of a Letter of
Intent.
iv) Further,
since the project had already received IOD and CC, R-1 demolished the building
and started shore piling work.
k) Since R-1
hadcompleted the transactions in a bona-fide manner, it was shocked to receive
a show cause notice dated 14th July 2017 under section 24(1) of the Prohibition
of Benami Property
Transactions
Act, 1988 (the said Act). On the same date, an order was passed by the Dy.
Commissioner of Income Tax thereby levying provisional attachment on the said
Property. R-1 states that vide its letter dated 8th August 2017, R-1 submitted
a detailed reply to the show cause notice and the provisional attachment order.
Relevant contents of the reply were reproduced in the order of the Adjudicating
Authority and is at Pg. 22-32 of the impugned order
( Appeal Set’s
Pg. No. 33-43).
l) R-1 states
that despite of the aforesaid clear and equivocal facts of the case, the IO in
total disregard to the reply given by R-1 and without furnishing any valid
justification whatsoever, passed an order dated 9th October 2017 continuing the
provisional attachment.
m) The IO
subsequently also filed in the Adjudicating Authority Reference No. 198/2017
seeking therein the confirmation of its attachment order. R-1 was arrayed as
benamidar in the said reference.
n) Consequent to
the filing of the above reference, Ld. Adjudicating Authority in a detailed and
comprehensive order dated 24.10.2018, did not confirm the Provisional
Attachment Order as passed by the IO, finding the pleadings and grounds taken
by R-1 to be true, valid and genuine.
13. Admittedly,
the Adjudicating Authority inter-alia on various reasons disallowed the
reference filed by the IO by passing the speak detailed order on the
following:-
i) SCN is not
sustainable since no explanation given by IO for changing the character of
original reference and hence order u/s 24(3) & 24(4) are also invalid
and illegal.
ii) No
explanation was given as to why the Provisional Attachment Order u/s
24(4)(a)(i) was not served to the R-2.
iii) The IO has
miserably failed to discharge the burden of proof cast upon him to prove the
transaction as benami.
iv) Genuine and
Bona-fide transaction carried out by R-1 and Failure of the IO to establish
connection between DHFL and RKW Developer Pvt. Ltd. (R-2).
v) Transaction
not carried out in stages as alleged as the R-1 has able proved that the land
was purchased by it through genuine sources and for re-development.
vi) The
possession, control and enjoyment of the property is totally in the hands of
the R-1 and therefore no proof that the property is held for the benefit of R-2
and thus crucial mandatory test to treat the property as benami failed.
vii) Admission
of IO that the funds were not given by the R-2 to R-1 for the purchase of
property.
14. The counsel
appearing on behalf of R-1submits that R-1 is the true and sole owner of the
said Property and all the benefits arising out of the said land accrues to R-1
only and as such no other person is beneficial owner of the said property as is
being erroneously projected by the appellant (the IO). The transaction of the
purchase of the 10 flats is a genuine and bona-fide transaction for which
consideration was paid by R- 1.
15. There is no
denial that the consideration for all the eleven (11) flats was partly funded
out of the loan proceeds as secured from DHFL. TheIO has accepted the
genuineness of transaction involving the Flat No. 5 purchased by R-1 for valid
consideration, from its joint owners Sh. Manoj Dhirajlal Shah, Mrs. Rajul D.
Shah and Sh. Manoj D Shah. The said flat was also brought on the same date as
the other ten (10) flats i.e. 13.01.2017. In fact, the IO had questioned the
validity of alleged as benami ten (10) flats, meaning thereby IO admitted and
accepted that the purchase of the above-said flat is not a benami transaction,
but remaining 10 flats are of benami transaction.
16. R-1 is a
registered LLP whose designated partner Mr. Rajen Dhruv is a promoter of
Midcity group. R-1 is also a part of Midcity group. It has come on record that
the Mid-city group has completed many real-estate projects in the past and is
in course of developing other projects also. A statement of projects
under-taken by mid-city group including the R-1 is filed and a brief profile of
Mid-city group is annexed.
17. It is not
denied by the appellant that the Mid-city group has taken loan facilities for
its other real-estate projects from DHFL in the past and as recently as
November 2016 had availed mortgage loan of Rs. 200,00,00,000/- (Two Hundred
Crores) for one of its group entity namely Orbit Ventures Developers, which is
developing project, Shikar I-II‟.
Therefore for business convenience and prudence, Mr. Rajen Dhruv again
approached DHFL and got sanctioned a project loan of Rs. 180,00,00,000/- (One
Hundred and Eight Crores) for R-1. In the letter dated 06.04.2018, the lender
i.e. DHFL had addressed to the IO that “ the loan to Manpreet Estates LLP (a
Midcity group concern) was sanctioned in the normal course of our business for
acquisition of project and redevelopment thereof. The
subject loan is not the only project loan sanctioned to that group. Earlier
also some projects of that group were financed by us”The said Letter was
reproduced in the order of the Adjudicating Authority. Therefore, it is
wrongful for the appellant to state that R-1 did not had the financial capacity
to avail loan from DHFL or it has a control over to the financial institution.
18. The
appellant has disputed the veracity of the loan agreement as executed between
R-1 and DHFL, and has claimed that R-2 is exercising control over DHFL. DHFL
i.e. Dewan Housing Financial Corporation Ltd. is a listed public company having
substantial public holding. Therefore, submission of the appellant cannot be
accepted to the effect that it is in control of a public listed company as the
loan extended to the R-1 by DHFL was done on „arm’s length basis‟. The relevant
disclosures for the payment of interest have been made in the Income Tax Return
filed for the Assessment Year 2018-19. It is not denied on behalf of the
appellant that the designated partners of R-1 i.e. Mr. Rajen Dhruv and Mr.
Kishore Parekh had given „Irrevocable Personal Guarantee‟ and therefore
stood as guarantors for the loan taken by R-1. The sanction letter dated
18.01.2017, from DHFL containing therein names of Mr. Rajen Dhruv and Mr.
Kishore Parekh as personal guarantors for the loan sanctioned to R-1. In the
letter dated 06.04.2018 of DHFL, a copy was also served to the R-1, requesting
R-1 to arrange alternative property as collateral security.
20. It is
admitted by the IO himself that consideration was paid by R-1 to the 10 (ten)
erstwhile owners, and it has been contended that the sale consideration is
finally parked with R-2 and related concerns. The IO has passed order of
attachment u/s 24(4)(a)(i), claiming therein that the transaction entered into
by R-1 is covered within the meaning of section 2(9)(A) of the PBPT Act. For a
transaction to be covered under section 2(9)(A) of PBPT Act, there must be
following two conditions are met:
i) Consideration
for property has been provided or paid by another person; and
ii) Property is
held for immediate or future benefit, direct or indirect, of the person who has
provided the consideration.
In view of facts
involved in the present case, it cannot be accepted that the R-2 is the
beneficial owner,therefore, in the absence of beneficial owner allegation of
transaction being benami u/s 2(9)(A) cannot be sustained and were rightly
rejected by the Adjudicating Authority.
21. Even the
attachment order u/s 24(3) of PBPT Act, has been passed without following the
procedure as laid down in the Rule 5 of the PBPT Rules, 2016 which deals with
provisions relating to provisional attachment, which read as under:-
“5. Provisional
attachment – For the purpose of sub-section (3) of section 24, the Initiating
Officer shall provisionally attach any property in the manner provided in the
Second Schedule of Income-tax Act, 1961 (43 of 61)”
In this case the
referred property being immovable, Part-III of Second Schedule of Income-Tax
Act, 1961, containing rules dealing with attachment and sale of immovable
property are applicable and for ready reference the rules are reproduced
below:-
48. Attachment
of the immovable property of the defaulter shall be made by an order
prohibiting the defaulter from transferring or charging the property in any way
and prohibiting all persons from taking any benefit under such transfer or
charge.
Service of
notice of attachment:
49. A copy of
the order of attachment shall be served on the defaulter.
Proclamation of
attachment
50. The order of
attachment shall be proclaimed at some place on or adjacent to the property
attached by beat of drum or other customary mode, and a copy of the order shall
be affixed on a conspicuous part of the property and on the notice board of the
office of the Tax Recovery Officer.
22. Under these
mandatory provisions, the IO was duly bound to follow the statutory procedure
mandated in above rules. Though order of attachment was passed and served on
the R-1, the requirement of proclamation of attachment order at some place on
or adjacent to the property attached by beat of drum or other customary mode
and affixture of copy thereof on a conspicuous part of the property and on the
notice board of the office of the Initiating Officer was not done.Certificate
of confirmation of affixture of the order on the notice board of the Initiating
Officer is also not found enclosed with the reference confirming that said
mandatory step was taken at the relevant point of time. Thus, the rules were
not followed.
a) The Hon‟ble Supreme
Court in the case of Ronald Wood Mathams v. State of West Bengal (AIR 1954 SC
455) observed "But it is essential that rules of procedure designed to
ensure justice should be scrupulously followed, and Courts should be jealous in
seeing that there is no breach of them".
b) On the
decision of Hon‟ble Punjab
& Haryana High Court in the case of Pal Singh Santa Singh v. The
State(AIR 1955 Punjab 18), in the matters of proclamation u/s 87 of Criminal
Procedure Code, where the Hon‟ble
High Court has held that attachment without publication is invalid if
publication of attachment was required under rules but not made.
23. Thus, the
provisional attachment order passed u/s 24(3) as well as order directing its
continuation passed u/s 24(4)(a) of the Act wascontrary to the rules.
24. In the
present case, the beneficial interest in the property is with R-
1. The
Adjudicating Authority has correctly observed that there is nothing to show
that the property in question is held by R-1 for the benefit of R-2.
25. The sale
deeds for all the 10 flats has not been challenged by the IO. The erstwhile
sellers had entered/executed the sale deed with R-1, representing themselves to
be the true owners. As per the mandate of Section 91 and Section 92 of the
Indian Evidence Act, 1872, If a transfer has been done of an immovable property
vide a written documentary evidences in the form of a registered sale deed. The
contradictory stand by way of oral evidence is not available unless the party
concerned challenging the written documents are able to prove that those are
sham documents and executed between the parties contrary to law.
26. It is
correct that after amendment, the onus of proving a benami transaction rests
entirely on the shoulders of the respondents. Before amendment, the burden of proof
was on the prosecution to prove the guilt of the Benamidar and beneficial
owner. Once both are able to discharge their burden of proof as per amended
law, then the burden of proof would be shifted to the prosecution. In the
present case, the respondents were able to discharge their initial burden of
proof by producing the sale deeds and document pertaining to the loan amount
and respondent no. 1 was also the promoter of respondent no. 2, no even prima
contrary evidence is proved by the appellant. Thus, in the facts of present
case and documentary evidence proved, the onus of proving a benami transaction
rests entirely on the shoulders of the IO who is making the charge. The burden
of proof shall shift to the person who is taking contrary of within the meaning
of section 91 and 92 of the Evidences Act, 1972.
27. The
authority has also concurred with the submission of R-1 that the IO has
miserably failed to discharge such burden of proof. Section 92 of Indian
Evidence Act, 1872 talks about the exclusion of evidence of oral agreement.
Once the primary evidence is proved by way of written document which is not
challenged, no evidence of an oral agreement or statement shall be admitted,
the burden shall be shifted to the party who pleaded oral agreement. After the
amendment in the Benami Act, if apply as it is, the burden of proof was shifted
upon the appellant. In the present case, the IO has failed to discharge such
burden and he has merely based on his personal perception with uncorroborated
statements had passed the order without even a single iota of evidence to
discharge such a burden of proof once the R-1 was able to prove that his
transaction was bona fide for beyond reasonable doubt.
28. Once the
burden is shifted upon the IO,the principles of general law available prior to
amendment would apply. The following judgements are referred on behalf of
respondent no. 1 and 2:-
a) Valiammal V.
Subramaniam,
“Circumstances
which can be taken as a guide to determine the nature of transaction:-
After saying so,
this Court spelt out following six circumstances which can be taken as a guide
to determine the nature of the transaction:
1. the source
from which the purchase money came;
2. the nature
and possession of the property, after the purchase;
3. motive, if
any, for giving the transaction a benami colour;
4. the position
of the parties and the relationship, if any, between the claimant and the
alleged benamidar;
5. the custody
of the title deeds after the sale; and
6. the conduct
of the parties concerned in dealing with the property after the sale."
The above
indicia are not exhaustive and their efficacy varies according to the facts of
each case. Nevertheless, the source from where the purchase money came and the
motive why the property was purchased benami are by far the most important
tests for determining whether the sale standing in the name of one person, is
in reality for the benefit of another.”
b) Smt. Usha
Bhar vs Sanat Kumar Bhar 2004 135 Taxman 526 “In order to ascertain whether a
particular sale is benami and apparent purchaser is not the real owner, the
burden lies on the person asserting to prove so, such burden has to be strictly
discharged based on legal evidence of definite nature.”
“it is the
intention of the parties which is to be ascertained, very often such intention
is shrouded in a thick veil. It is not possible to pierce the veil easily.
However, such difficulties would not relieve the person who asserts that the
transaction is benami, of any part of onus that rests on him. The difficulty
would not justify the acceptance of mere conjecture or surmise as a substitute
of proof.”
c) Bhim Singh V.
Kan Singh AIR 1980 SC 727
“The principle
governing the determination of the question whether transfer is a benami
transaction or not may be summed up thus:
(1) The burden
of showing that a transfer is a benami transaction lies on the person who
asserts that it is such a transaction;
(2) If it
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 person who supplied the purchase money, unless
there is evidence to the contrary;
(3) The true
character of the transaction is governed by the intention of the person who has
contributed the purchase money and
(4) The question
as to what his intention was has to be decided on the basis of the surrounding
circumstances, the relationship of the parties, the motives governing their
action in bringing about the transaction and their subsequent conduct etc.”
d) Andalammal V.
Rajeswari Vedachallam AIR 1985 Mad 321
“The next
question to which we propose to advert is the issue relating to benami theory.
It is by now well-settled that the burden is on the person who sets up the case
of benami in the instant case the respondents and that if the burden is not
discharged, the ostensible title will prevail. To substantiate a case of
benami, the judicial pronouncements have laid down several factors have to be
taken into consideration and on an over all assessment of such factors is the
court to render a finding. The relevant factors are:-
a) The
consideration;
b) Possession
and enjoyment of property;
c) Possession of
the title deeds;
d) Motive; and
e) Mutation in
the public records.” Jayadayal Poddar V. Bibi Hazra AIR 1974 SC 171 “The
essence of a benami is the intention of the party or parties concerned; and not
unoften such intention is shrouded in a thick veil which cannot be easily
pierced through. But such difficulties do not relieve the person asserting the
transaction to be benami of any part of the serious onus that rests on him; nor
justify the acceptance of mere conjectures or surmises, as a substitute for
proof.”
29. Counsel for
appellant in his written submission has stated that if there are infirmities in
the proceedings, then this Appellate Authority is not convinced with the above
arguments,it may remand the proceedings back to the Adjudicating Authority for impleading
DHFL as an interested party and deciding the matter afresh, rather than
dismissing the appeal. I do not agree with the submission of the appellant due
to the nature of the present case.
30. In the light
of above, this Tribunal is of the view that no ground has beenmade outby the
appellant for any interference. The appeal is dismissed.
31. No costs.
New Delhi,
26th March, 2019
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