Yoosaf N A. S/o Sh. Aboobacker Kutty Vs Initiating Officer (Appellate Tribunal Under SAFEMA Delhi)
₹50.13 Lakh Cash Seized by Police Treated as Benami Property – Filing ITR Later Cannot Defeat Benami Proceedings
The Appellate Tribunal under the Prohibition of Benami Property Transactions Act (PBPT Act) upheld the attachment and confiscation proceedings in respect of ₹50.13 lakh cash seized from the appellant during a police vehicle check, holding that unexplained cash can constitute benami property where the persons allegedly providing the funds are not traceable.
The appellant claimed that the cash had been pooled from friends and relatives for a proposed real-estate investment and later offered the entire amount as his income for AY 2017-18. However, he failed to identify the contributors or furnish any documentary evidence supporting the claim. The Tribunal noted that even in his statement and affidavit, the appellant admitted ownership of the cash but could not establish its source.
Rejecting the argument that cash is not “property” under the PBPT Act, the Tribunal held that cash is a tangible movable asset and squarely falls within the definition of property. It further observed that where the persons providing consideration are untraceable, Section 2(9)(D) can be invoked and the transaction can be treated as benami.
The Tribunal also clarified that a benami transaction does not necessarily require three parties and that the existence of a benamidar and a beneficial owner is sufficient. Since the appellant could not establish the source of the cash or identify the alleged contributors, the authorities were justified in invoking the PBPT Act.
Importantly, the Tribunal held that subsequent willingness to offer the cash as income in the return of income does not provide immunity from Benami proceedings. The Income-tax Act and the PBPT Act operate in different fields-the former seeks to tax income, while the latter aims to prohibit and confiscate benami property. Therefore, filing or proposing to file an ITR after detection cannot nullify action under the PBPT Act. Accordingly, the appeal was dismissed.
FULL TEXT OF THE JUDGMENT APPELLATE TRIBUNAL UNDER SAFEMA AT NEW DELHI
The present appeal under Section 46 (1) of Prohibition of Benami Property Transaction Act, 1988 (PBPT) is filed by the appellant against the order dated 25.03.2019 passed by the Adjudicating Authority under Section 26 (3) of the PBPT Act, 1988 in Reference no. 599/2018, thereby confirming the Provisional Attachment Order (PAO) dated 12.03.2018 passed by the respondent ACIT (BPU) under Section 24 (4)(b)(i) of the PBPT Act, 1988. The detail of the said property is cash of Rs. 50,13,000/-seized from the possession of the appellant on 27.03.2017 and was stated to be transferred to ITO on 29.11.2018.
