DCIT Vs Brook Multimedia Private Limited (Appellate Tribunal Under Safema At New Delhi)
Wrong Property, Right Target: Tribunal Allows Benami Attachment of Rs 1.96 Cr Despite Defective Identification
The Appellate Tribunal under SAFEMA allowed the Department’s appeal and held that although the wrong immovable property was initially attached, the proceedings under the Benami Act cannot fail when the core benami element—bogus share premium of ₹1.96 crore—is clearly established.
The Tribunal found that M/s Brook Multimedia Pvt. Ltd. was a shell company with no real business activity, as evident from its nil turnover and continuous losses , yet it received an abnormally high share premium of ₹240 per share aggregating ₹1.96 crore from entities later found to be accommodation entry providers controlled by an entry operator (Amit Dalmia). Statements of directors confirmed that they were dummy directors, establishing that the company was merely a name-lender (benamidar).
On facts, the Tribunal accepted that the specific property initially attached (B-1101) was wrongly identified and actually belonged to the beneficial owners personally. However, based on ITR disclosures and financial statements , it was established that the bogus share premium was ultimately utilised to acquire another property (Asmi Dramz), and later converted into loans, investments, or sale proceeds.
Crucially, the Tribunal held that “property” under the Benami Act includes transformed forms and proceeds, and therefore benami investment does not vanish merely because the original asset is misidentified or converted. The plea that the property was acquired through loans was rejected, with the Tribunal observing that such “loans” were actually recycling of funds earlier advanced, proving layering and accommodation entries.
Accordingly, the Tribunal modified the order-directing release of the wrongly attached property but permitting attachment of benami assets to the extent of ₹1.96 crore in whatever form they exist (investments, loans, proceeds, etc.).
FULL TEXT OF THE ORDER OF APPELLATE TRIBUNAL UNDER SAFEMA AT NEW DELHI
Present Appeal u/s 46(1) of Prohibition of Benami Property Transactions Act, 1998 (PBPTA), is filed by the Initiating Officer, DCIT, BPU-2, Mumbai against the order dated 14.10.2021 passed by the Adjudicating Authority, whereby reference made u/s 24(5) of PBPTA, 1998 (as amended) qua the attached property was revoked and thereby the Provisional Attachment Order (PAO) dated 18.03.2020 was set-aside.
