Wrong Property, Right Target: Tribunal Allows Benami Attachment of Rs 1.96 Cr Despite Defective Identification

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.

2. As per the facts of the case, M/s Brook Multimedia Pvt. Ltd., the Benamidar was incorporated on 30.11.2020. As per the returns of income, the benamidar has shown its nature of business as ‘0204 – Trading – Others’. The registered address of this company is Office No. 2, 2ⁿd Floor, Daulat Bhavan, 407, Kalbadevi Road, Mumbai – 400002.

On perusal of the returns of income and the ITR details available with the Income Tax Department, it was observed that the benamidar M/s Brook Multimedia Pvt. Ltd. (PAN: AAECB3481F) is holding the following benami property in its name:

The Directors of the benamidar company at various points were as follow:

The current shareholder of the benamidar as per the details available on Return of income for the AY 2019-20 are as under:

The analysis of the returns of income of the benamidar from AY 2011-12 to AY 2019-20 reveals that the benamidar is not involved in any actual business activities. The important details as per the profit and loss account of the benamidar are as follow:

The benamidar has no income generating activity and the benamidar thus possesses all principal characteristics associated with a shell company. In absence of any revenue-generating activities of the benamidar, the source of funds used to purchase the benami property were analyzed.

As seen from the table below, the source of funds available with the benamidar comes almost entirely from securities premium:

It was observed from the records filed by the benamidar with the Ministry of Corporate Affairs (MCA), Government of India, that it had received Rs. 1,96,80,000/-, as premium on shares from various companies upon allotment of shares in FY 2010-11. The nominal value of the equity share of the benamidar was Rs. 10 per share. However, the benamidar had allotted equity shares to the shareholders at huge premium of Rs. 240/- per share, which was multiple times its nominal value and received Rs. 1,96,80,000/- as premium with each equity share of Rs. 10 allotted at Rs. 240. The benamidar was not conducting any actual business and as such, the benamidar did not possess any attractive profile that would warrant subscription of its shares at such high premium, but still the shares were subscribed at huge premium by following shareholders in FY 2010-11 at huge premium:

Subsequently, the shareholdings of the benamidar company underwent change many times as during the course of years and the final shareholding as on 31.03.2018 is as under:

The above change in shareholding took place at Face Value, even when the benamidar company had sufficient reserves and assets in the form of immovable property.

The investigation conducted by the Directorate of Investigation, Kolkata Wing, Income Tax Department upon one Shri Amit Dalmia, s/o Jay Prakash Dalmia and the entities controlled or managed by them revealed that Shri Amit Dalmia had floated a number of companies, firms and proprietorship concerns through which he was providing accommodation entries to various persons in lieu of commission. The nature of the accommodation entries inter alia included providing bogus unsecured loans, bogus purchase invoices, bogus turnover and expenses and routing money through intermediaries to disguise its origin. The shareholders, directors, partners and proprietors of these entities were either their relatives or employees or were concerns wholly controlled and managed by them. In his statement recorded on oath on 31.03.2015, Shri Amit Dalmia categorically admitted that he was into the vocation of providing accommodation entries and that the entities floated by him did not conduct any actual business.

Further, Shri Ganga Dhar Sail, one of the initial directors of the benamidar company, in his statement recorded on Oath on 05.06.2014, admitted that he was merely a namesake Director and all affairs of the benamidar company were handled by the entry operator – Shri Amit Dalmia.

From the above, it is clear that the premium infused into the benamidar company was bogus and all the shareholding companies were merely shell entities managed and controlled by Shri Amit Dalmia. Most of all the subscribing companies are functioning out of common addresses

FPA-PBPT-1507/MUM/2021 DCIT (BPU-2), Mumbai v. M/s Brook Multimedia Private Limited & Another and have common directors. This also indicates that these are shell companies controlled and managed by a single group of persons. Further, they do not have any source of income and all the funds used for subscribing to the shares of benamidar at premium have arisen from some other shell corporation/entities or person(s).

It is further noted that the immovable benami property was purchased by the benamidar on 11.05.2017 for a consideration of Rs. 1,82,82,064/- and subsequently, the entire shareholding was acquired by the ‘Gupta Family’. Since the benamidar is a shell corporation which has been incorporated for the purpose of acquiring benami properties for the benefit of the Gupta Family, the natural question thus arises is cui bono i.e. who does it benefits and that responsibility for an act or event lies with one having something to gain. It is clear from the above that the acquisition of the benami property by the benamidar is solely for the benefits of Gupta Family especially Shri Pawan Gupta. As these benami transactions have been made to benefit the Gupta family, who are the ultimate beneficial owners, it is evident that these transactions were entered into by the benamidar upon the instructions of Shri Pawan Gupta in collusion with Shri Amit Dalmia and Shri Ganga Dhar Sail. Hence, the consideration of the benami properties have been provided by Shri Pawan Gupta and his family members and the ultimate benefit from these properties is thus enjoyed by them.

Therefore, on the basis of above discussion and facts, I.O. concluded that the transaction of acquisition of immovable property by M/s Brook Multimedia Pvt. Ltd. is satisfying all the conditions of being a Benami transaction as per the PBPT, Act, 1988 with regard to the acquisition of the following immovable assets:

Accordingly, a show cause notice under sub-section (1) of Section 24 of the Prohibition of Benami Property Transaction Act, 1988 dated 30.12.2019 was issued to the benamidar company. The copy of the SCN was also issued to the beneficial owner – Shri Pawan Gupta u/s 24(2) of the PBPTA, 1988.

Thereafter, the matter was referred to the Adjudicating Authority vide Reference No. R-2074/2020 for confirmation of PAO. The Adjudicating Authority issued the notice dated 16.08.2021 to the defendants i.e. benamidar and beneficial owner to defend their case before the Adjudicating Authority on 13.09.2021. After receiving the reply, from the benamidar as well as the beneficial owner as mentioned in para no. 6.33 of the impugned order and hearing the rival submissions revoked the attachment order dated 10.03.2020, on the ground mentioned in para 7, 7.1 and 7.2 of the impugned order, as benamidar has acquired a different property i.e.; 201, Second floor, Asmi Dramz, CTC No.- 339.340(P) SP Road, Goregaon (West), MUMBAI-400062, but not the attached property no. B-1101, Asmi Realtors, Mahindra Eminent, SV Road, Goregaon (West), Mumbai 400104.

Aggrieved by the said order, Appellant Department filed the present Appeal.

3. Ld. counsel for the appellant department contended that respondent No.1/ benamidar itself reflected the acquisition of property no. B-1101, Asmi Realtors, Mahindra Eminent, SV Road, Goregaon (West), Mumbai 400104, in its ITR for the AY 2019-20. He pointed out that during investigation, in absence of any explanation, the said property was attached by the IO as mentioned in the PAO. He contended that the property that has been attached is the same property, as has been self-reported by the defendant in the aforesaid ITR. Therefore, if this property does not belong to the defendant, the IO was misled by the faulty and fraudulent ITR filed by the defendant, and accordingly, now they are estopped from changing their stand that the said property is wrongly attached, even if the attachment as value thereof is not permissible under PBPT Act. Respondent No. 1 has made a false statement in verification pertaining to asset. It is not expected of respondent to make a false verification. The IT Act declares this as an offence punishable under section 277 of the IT Act.

He submitted that respondent no.1 company, generated a large amount as securities premium on account of purchase of its shares with extra premium of Rs. 240 over the face value of Rs. 10 by M/s Caren Trading Pvt. Ltd. and M/s Sarveshwar Commercial Pvt. Ltd. to the extent of 42,000 and 40,000 respectively. Thereby, benamidar company generated share premium of Rs.1,96,80,000/- (Rs.1,00,80,000 + Rs. 96,00,000) in addition to face value of the shares to the extent of Rs. 8,20,000/- (4,20,000 + 4,00,000), totaling to Rs. 2,05,00,000/-. He stressed that the real issue involved in the present case is not the specific immovable property, but the infusion of Rs. 1,96,80,000/- in the appellant company from the aforesaid two companies, without any basis seeing the fact that the appellant company is a shell company without doing any actual business and earning any annual profit and thus there was no ground to purchase its shares with high premium. He stated that the IO had clearly mentioned in the PAO that from the findings of search operations and verification of the records it was found that the shareholding pattern changed to the present form at face value of the share @ Rs.10 each and all the shareholders are from single ‘Gupta Family’. Thus, the new shareholders got the ownership of a company having huge share premium of Rs. 1,96,80,000/-. He pointed out that this fact is also admitted by respondent no.1 while filing the list of allotment as on 31.03.2011 reflecting the receipt of share premium of Rs. 1,96,80,000/-in addition to share value of Rs. 8,20,000/-, which is annexed with the additional documents filed by the appellant IO.

He argued that the Ld. AA has erred in not giving consideration to the fact that the entities subscribing to the shares of the BD company were also shell entities, as evident from the statement of Amit Dalmia dated 30.03.2015, which were used to provide accommodation entries and who were not conducting any real business and were controlled and managed by him.

He pointed out that the immovable benami property was purchased by the benamidar for a consideration of Rs. 1,82,82,064 as reflected at Page 75 of the ITR of the AY 2019-20. He contended that subsequently, the entire shareholding was acquired by ‘Gupta Family’ only at face value of Rs. 10 and paid no premium for the same. This fact of sudden diminishing of the value of shares, despite availability of the asset i.e share premium (later-on, converted into immovable property) ought to be only explained by the noticee(s) being privy to such personal details of transactions/parties concerned. The BD never had any business reflecting in its books of accounts, nor any explanation was tendered on the aspect.

He argued that the benamidar is merely a shell company that has been incorporated for being used as a special purpose vehicle to infuse funds by way of share premium; having no rational and finally used to lend its name for acquiring benami property being controlled currently by Gupta Family, the natural question thus arises is cui bono i.e. who does it benefits and that responsibility for an act or event lies with one having something to gain. It is clear from the above that the acquisition of the benami property by the benamidar is solely for the benefits of the ‘Gupta Family’ especially Shri Pawan Gupta, as these benami transactions have been made to benefit the Gupta family, who are the ultimate beneficial owners. It is evident that these transactions were entered into by the benamidar upon the instructions/instance/ for the benefit of Shri Pawan Gupta, as Gupta family took over the shell company from Shri Amit Dalmia (entry operator) and his dummy director Shri Ganga Dhar Sail. Hence, the consideration of the benami properties have been provided by Shri Pawan Gupta and his family members and the ultimate benefit from these properties is thus enjoyed by them.

He argued that the Adjudicating Authority dismissed the Reference for confirmation of PAO on the following ground:

“7.1 Learned Counsel has stated that Benamidar has acquired a different property i.e. 201, 2^nd Floor, Asmi Dramz, CTC No 339.30(P) SV Road Goregaon (w), Mumbai-62 in 2017 but same is not subject matter of present proceeding. The Ld. counsel had thus argued that the property attached was never owned by Benamidar & therefore the PAO id legally invalid. It was thus argued that it is a fatal lapse on the part of IO & on this ground only the entire reference is liable to be dismissed & quashed.”

Ld. counsel for the appellant pointed out Section 26 of the PBPT Act:-

26. (1) On receipt of a reference under sub-section (5) of section 24, the Adjudicating Authority shall issue notice, to furnish such documents, particulars or evidence as is considered necessary on a date to be specified therein, on the following persons, namely:-

(2) ………………….

(5) Where in the course of proceedings before it, the Adjudicating Authority has reason to believe that a property, other than a property referred to it by the Initiating Officer is benami property, it shall provisionally attach the property and the property shall be deemed to be a property referred to it on the date of receipt of the reference under sub-section (5) of section 24.”

Accordingly, he argued that it was the duty of the AA to substitute the property by exercising power under Section 26(5) of the PBPT Act, instead of dismissing the Reference, as the infused share premium to the extent of Rs. 1,96,80,000/-, which was utilized for Acquiring the unattached property No. 201, 2^nd Floor, Asmi Dramz, CTC No 339.30(P) SV Road Goregaon (w), Mumbai-62.

He stated that even otherwise section 63 of the PBPT Act provides remedy for such mistake, defect or omission as detailed above. There is no passing reference to the said statutory provision and its applicability to the present reference.

“63. Notice, etc., not to be invalid on certain grounds.— No notice, summons, order, document or other proceeding, furnished or made or issued or taken or purported to have been furnished or made or issued or taken in pursuance of any of the provisions of this Act shall be invalid, or shall be deemed to be invalid merely by reason of any mistake, defect or omission in the notice, summons, order, document or other proceeding if the notice, summons, order, document or other proceeding is in substance and effect in conformity with or according to the intent and purpose of this Act.”

He pointed out that after setting aside of the above reference no. by the AA, the appellant department/ IO, BPU conducted the further investigation. He pointed out that during further investigation, it was revealed that Respondent No. 1 has already disposed of the property No. 201, 2^nd Floor, Asmi Dramz, CTC No 339.30(P) SV Road Goregaon (w), Mumbai-62, and accordingly, the trail of said sale proceeds was traced and attached, which were found to be in the form of investments made by Respondent Benamidar in M/s Pranesh Dealmark Pvt. Ltd. and M/s Aakriti Overseas Pvt. Ltd., including ownership of shares, loans and advances and other investments of any nature. Show Cause Notices under Section 24(1) and 24(3) under the PBPT Act were issued to the appellant on 24.01.2026.

Prayer is accordingly made to allow the present appeal and thereby confirm the reference qua the investment of the share premium of Rs. 1,96,80,000/- utilized by the benamidar company in the form of any investment whatsoever.

4. On the other hand, Ld. counsel for the Respondents submitted that the AA passed a well-reasoned and detailed order as mentioned in para 7, 7.1 & 7.2 of the impugned order. He contended that the Appellant/IO has wrongly described the personal private property of the Answering Defendant as the property of M/s Brook Multimedia Pvt. Ltd. This shows the callous and careless approach where the appellant wrongly attached the subject property, i.e., B 1101, Asmi Realtors, Mahindra Eminent, SV Road, Goregaon (West), Mumbai 400104. In support of his contention, he pointed out Annexure R2, Agreement to Sell dated 29.08.2011 qua this property executed by M/s Aditya Agarwal in favour of respondent No.2, Pawan Gupta and his wife Pramila P. Gupta, filed with the Written Submissions filed on behalf of the Respondent. He further pointed out that this property was never acquired by Respondent No. 1 Brook Multimedia Pvt. Ltd. as alleged. He further argued that the property No. 201, 2nd Floor, Asmi Dramz, CTC No 339.30(P) SV Road Goregaon (w), Mumbai-62 was purchased by Respondent No. 1 on 11.05.2017 vide agreement to sell, Annexure R-4. He pointed out that the said property was purchased by taking the loans/financial assistance from M/s Sambhavna Deal Trade Pvt. Ltd., Axis Bank, M/s Kamyabi Dealtrade Pvt. Ltd., M/s Sarvajana Properties Pvt. Ltd., M/s Manomay Commosale Pvt. Ltd., M/s Shiv Parvati Leasing Pvt. Ltd., M/s Hora Finance and Investment Pvt. Ltd., M/s Devesh Commosale Pvt. Ltd. for total sum of Rs. 1,81,12,579/-, as mentioned at Page 7 of the impugned order. In support of his contention, he pointed out the bank statement of respondent no. 1, the alleged benamidar, which is Annexure R-5 and submitted that the bank statement corroborates the contention of financial assistance. Accordingly, he stressed that the attachment of alleged trail of sale proceeds of the said property is also liable to be dismissed. He submitted that the purchase of the shares of any unlisted company for any premium cannot be presumed as a benami transaction for infusing the amount, as the same is a bilateral contract voluntarily entered between the two parties after negotiation of the price. He further argued that even otherwise, there is nothing on record that the share premium was utilized for purchasing any of the two properties. The Ld. Adjudicating Authority clearly and authoritatively spelt out that this mistake of attaching the wrong property by the IO is not covered under section 63 of the PBPT Act.

He stated that the following were the important and pertinent observations made by the Ld. Adjudicating Authority in the well-reasoned impugned order:

a. “The facts cited by Learned Counsel (of the defendant) are correct and was not rebutted by IO.

b. In the SCN itself, the IO had identified & described a wrong property which was legally not owned by the Benamidar but by the Beneficial Owner himself.

c. It appears that a wrong fact was communicated to the IO by Investigation Wing & the IO continued with the same mistake. (blind borrowed belief which is anathema in law)

d. Nonetheless the entire SCN is vitiated and invalid due to implication of a wrong property which is not held by the Benamidar.

e. This is not a mistake which can be treated as covered as under Section 63 of the PBPTA.

f. Identification of correct property and its implication as a benami property is at the root of proceedings and once that is vitiated, entire proceedings goes away.

g. On this ground only, the reference is being dismissed and the attachment is not confirmed.”

Hence, it is not conceivable as to how the appellant is aggrieved in any manner with respect to the above property which does not satisfy the elementary basic conditions/provisions of the PBPT Act w.r.t the subject property.

Therefore, the entire proceedings carried out by the Appellant was illegal and void ab-initio and the present Appeal too is liable to be dismissed by the Hon’ble Appellate Tribunal.

5. After hearing the rival submissions, we have given our thoughtful consideration to the same. The relevant provisions of PBPT Act, are reproduced as under:

Sec. 2[8] of the Act defines “Benami property” as

“any property which is the subject matter of a benami transaction and also includes the proceeds from such property“.

“Benamidar” in turn, is defined u/s 2[10] of the Act thus:

“[10]: “benamidar” means a person or a fictitious person, as the case may be, in whose name the property is transferred or held and includes a person who lends his name.”

Section 2(12) of the PBPT Act defines “Beneficial owner” :

“means a person, whether his identity is known or not, for whose benefit the benami property is held by a benamidar.”

Section 2(26) of the PBPT Act,

“Property means assets of any kind, whether movable or immovable, tangible or intangible, corporeal or incorporeal and includes any right or interest or legal documents or instruments evidencing title to or interest in the property and where the property is capable of conversion into some other form, then the property in the converted form and also includes the proceeds from the property”.

“Benami property” is thus a property held by a “benamidar” (as defined u/s 2[10] of the Act) for and on behalf of a “Beneficiary owner” [as defined u/s 2[12] of the Act]” to whom he is answerable.

Following facts are not disputed by both the sides being matter of record:

i. Appellant company is in possession of Share premium to the extent of Rs. 1,96,80,000/- plus share value of Rs. 10 each.

ii. Respondents have not disputed the fact that they are not carrying out any business activity like trading or investment, before the initiation of investigation/purchase of the property in May, 2017.

iii. The property, B 1101, Asmi Realtors, Mahindra Eminent, SV Road, Goregaon (West), Mumbai 400104 was purchased by Pawan Gupta and his wife Pramila P. Gupta, vide Agreement to Sell dated 29.08.2011.

iv. The property No. 201, 2^nd Floor, Asmi Dramz, CTC No 339.30(P) SV Road Goregaon (w), Mumbai-62 was purchased by Respondent No. 1 M/s Brook Multimedia Pvt. Ltd. vide agreement to sell dated 11.05.2017, Annexure R4.

v. The Income Tax Returns of respondent No. 1 for the year 2018-19 and 2019-20 filed before Income Tax Authorities.

vi. Bank statement, Annexure R-5.

Moreover, the statement of Sh. Gangadhar Sail, who was the director of the BD along with Sh. Pankaj Gupta. Gangadhar Sail has categorically admitted in his statement dated 05.06.2014 that he acts merely as a dummy director in the company(s) floated by his employer Sh. Amit Dalmia. Subsequently, Amit Dalmia in his statement dated 31.03.2015 admitted that he is involved in the business of floating shell entities for commission which provides accommodation entries through unsecured loans, bogus purchases and sales, etc and that the BD entity is also one of those concerns as well, he also admitted that all the shareholders, directors, partners and proprietors of the entities floated by him were all either his relatives or employees and that the concerns were wholly controlled and managed by him.

Hence, the attachment of property, B 1101, Asmi Realtors, Mahindra Eminent, SV Road, Goregaon (West), Mumbai 400104, apparently seems to be incorrect, (in absence of any proof that the said property was transferred to the respondent no.1), instead of attaching the property No. 201, 2^nd Floor, Asmi Dramz, CTC No 339.30(P) SV Road Goregaon (w), Mumbai-62. However, respondents have taken the plea that the second property is purchased by taking the loans/financial assistance from M/s Sambhavna Deal Trade Pvt. Ltd., Axis Bank, M/s Kamyabi Dealtrade Pvt. Ltd., M/s Sarvajana Properties Pvt. Ltd. M/s Manomay Commosale Pvt. Ltd., M/s Shiv Parvati Leasing Pvt. Ltd., M/s Hora Finance and Investment Pvt. Ltd., M/s Devesh Commosale Pvt. Ltd. for total sum of Rs. 1,81,12,579/-, as mentioned at Page 7 of the impugned order. Therefore, now we have to analyse, whether at present respondent no.1 is in possession of any benami property in any form whatsoever and the consequently, the modification of the impugned order, if any.

6. In order to analyse the aforesaid issue, it will be material to point out the material facts apparent from the ITRs of Respondent No.1 for the AY 2018-19 and 2019-20.

The above table clearly reflects that there was no profit, but loss to respondent no.1 M/s Brook Multimedia Pvt. Ltd. during the AY 2018-19 & 2019-20. The purchase of property No. 201, 2nd Floor, Asmi Dramz, CTC No 339.30(P) SV Road Goregaon (w), Mumbai-62 by Respondent No. 1 M/s Brook Multimedia Pvt. Ltd. vide agreement to sell dated 11.05.2017, Annexure R4, was not disclosed while filing ITR for AY 2018-19, but another property B 1101, Asmi Realtors, Mahindra Eminent, SV Road, Goregaon (West), Mumbai 400104 was disclosed in the ITR for the year 2019-20. The above table at Sl. No. 10 shows loan and advances given by respondent no.1 for sum of Rs. 1,96,78,122/-. Therefore, it is apparent that the amounts taken from the different companies as reflected in the bank statement Annexure R-5 filed by the respondents, was in fact not the financial assistance or loan provided by the said companies, but the repayment of loan advanced to them, which was utilised for purchase of property 201, 2^nd Floor, Asmi Dramz, CTC No 339.30(P) SV Road Goregaon (w), Mumbai-62. Accordingly, this particular property is in fact purchased by respondent no.1 from the benami property/share premium of Rs. 1,96,80,000/-. Further, it is strange & dubious that the respondent company, which was incorporated & registered on 30.11.2010 was able to attract share premium within a year of incorporation to the magnitude of Rs. 240/- per share (amounting to Rs. 1,96,80,000/-), in addition to the face value of Rs. 10 (amounting to Rs.8,20,000/-), seeing the fact that it never conducted any business from 2010-2017, as apparent from its ITR from AY 2011-12 to AY 2019-20. Hence, benami investment is quite discernible.

Section 2(26) of the PBPT Act, defines property as under:-

“Property means assets of any kind, whether movable or immovable, tangible or intangible, corporeal or incorporeal and includes any right or interest or legal documents or instruments evidencing title to or interest in the property and where the property is capable of conversion into some other form, then the property in the converted form and also includes the proceeds from the property”.

In any running business concern/firm/company, the cash in hand or bank balance does not remain stagnant, as the same is used for purpose of investment in one form or the other. Thus, in a running unit or trade, one cannot take the plea that since cash in- hand or bank balance is not available, the same cannot be attached, as assets and liabilities are dynamic processes. We are of the view that share premium is a movable property, which can be used to buy any other movable or immovable property. Therefore, any attachment made by the appellant IO to the said extent is legally valid for confirmation, even if the attached property no. B 1101, Asmi Realtors, Mahindra Eminent, SV Road, Goregaon (West), Mumbai 400104 is directed to be released being not acquired from the benami property/bogus share premium of Rs. 1,96,80,000/-.

During further investigation, it was revealed to the investigating officer that the said property 201, 2^nd Floor, Asmi Dramz, CTC No 339.30(P) SV Road Goregaon (w), Mumbai-62 was already disposed of by the respondent no.1 and thus, the trail of sale proceeds in any form whether bank balance, investment in shares, etc. is liable for attachment to the extent of Rs. 1,96,80,000/-.

7. The fact that wrong property was mentioned in the Show Cause Notice (on account of misdeclaration in the ITR for the year 2019-20), the attachment proceedings cannot be set aside qua the share premium of Rs. 1,96,80,000/- transformed in the form of any investment/loan, as the infusion of bogus share premium is specifically mentioned in SCN which was utilised for purchasing the property 201, 2^nd Floor, Asmi Dramz, CTC No 339.30(P) SV Road Goregaon (w), Mumbai-62.

8. In sequel to our discussion and findings from para no. 5 to 7, the present appeal is hereby allowed and the appellant is permitted to attach the benami property of respondent no.1 M/s Brook Multimedia Pvt. Ltd. to the extent of Rs. 1,96,80,000/- infused in the form of the bogus share premium obtained at the rate of Rs. 240 per share, without any basis, which is now stated to be transformed into other type of properties. However, the attached property no. B 1101, Asmi Realtors, Mahindra Eminent, SV Road, Goregaon (West), Mumbai 400104, is hereby directed to be released. The impugned order stands modified accordingly.

Appeal Allowed.

Pronounced on this 01st Day of April, 2026.