Swagatma Enclave Pvt. Ltd. Vs Initiating Officer (Appellate Tribunal Under SAFEMA Delhi)
The Appellate Tribunal under SAFEMA dismissed the batch of appeals and upheld the provisional attachment of 143 immovable properties under the Prohibition of Benami Property Transactions Act, 1988, holding that the transactions clearly constituted benami arrangements. The case arose from an Income Tax search on the Maharani Group, where it was found that unaccounted cash generated through bogus purchase bills and hawala routing (₹40-42 crore) was infused into shell companies and used to acquire properties in their names.
The Tribunal noted (as seen from the detailed shareholding structure on page 15) that although the properties were in the name of companies, Mahaveer Lunia and his family exercised indirect control through layered shareholding, effectively making them the beneficial owners, while the companies acted as benamidars. The explanation that properties were purchased from company reserves, capital and loans was rejected since the source of such funds, advances and share premium remained unexplained and unsupported by documents.
It was further held that statements recorded during Income Tax search can be validly used in benami proceedings, and absence of cross-examination is not fatal. The Tribunal clarified that benami character is not negated merely because transactions are recorded in books or assessed under the Income-tax Act, and even disclosed income can form part of a benami transaction.
Finding a clear pattern of cash infusion, layering through shell entities, and acquisition of properties to conceal real ownership, the Tribunal held that all ingredients of Section 2(9)(A) were satisfied. Accordingly, the attachments were confirmed and all appeals were dismissed.
FULL TEXT OF THE JUDGMENT APPELLATE TRIBUNAL UNDER SAFEMA AT NEW DELHI
By batch of these appeals under Section 46(1) of the Prohibition of Benami Property Transaction Act, 1988 (in short `the Act of 1988’), a challenge has been made to the order dated 30.08.2024 passed by the Adjudicating Authority confirming the Provisional Attachment Order while answering the reference.
