DCIT (BPU) Vs ARC Agrochemical LLP & Ors. (Appellate Tribunal Under SAFEMA Delhi)
The Appellate Tribunal under SAFEMA allowed the Department’s appeals and set aside the order of the Adjudicating Authority which had refused to confirm the Provisional Attachment Orders (PAO) under the Prohibition of Benami Property Transactions Act, 1988. The Tribunal found that the Adjudicating Authority had passed a contradictory and perverse order, ignoring its own earlier findings on identical facts and overlooking crucial material on record.
On merits, the Tribunal held that there was sufficient evidence showing that the ARC group had generated unaccounted cash through online betting and gambling, which was then layered through shell entities and accommodation entries in the form of bogus loans, capital, agriculture income, and other heads before being invested in properties and securities. It emphasized that routing of funds through multiple entities itself establishes the benami nature, and the Adjudicating Authority erred in ignoring this modus operandi.
The Tribunal also clarified that benami proceedings are independent of income-tax assessments and criminal proceedings, and acquittal or discharge in criminal cases does not affect benami action. Further, it held that the Initiating Officer had valid “reason to believe”, and sufficiency of such reasons cannot be questioned.
Accordingly, the Tribunal upheld the Department’s action and confirmed the provisional attachment, restoring the proceedings against the alleged benami properties.
FULL TEXT OF THE JUDGMENT APPELLATE TRIBUNAL UNDER SAFEMA AT NEW DELHI
