Adesh Ventures LLP Vs Initiating Officer (Appellate Tribunal Under SAFEMA Delhi)
Benami Web Exposed: Tribunal Upholds Attachments in Rs 80+ Cr Layered Accommodation Entry Case
The Appellate Tribunal under SAFEMA dismissed a batch of appeals challenging provisional attachment of properties under the Prohibition of Benami Property Transactions Act, 1988, holding that a clear case of benami transactions was established. The Tribunal found that the appellants (ARC group entities and related individuals) had generated unaccounted cash through online betting and gambling, which was subsequently routed through multiple entities via accommodation entries and introduced into books as bogus unsecured loans, capital, commission, and trading income.
The Tribunal rejected the contention that the Benami Prohibition Unit (BPU) could not rely on Income Tax search material, holding that there is no legal bar on using such evidence, especially when supported by corroborative electronic records and statements. It emphasized that retracted statements can still be relied upon if supported by independent evidence, such as digital records (e.g., “Hisab” sheets and “Octonwards Final” data showing cash-to-bank entry mapping).
It further held that assessment of income under the Income-tax Act does not preclude benami proceedings, as both operate in different domains-taxability vs. ownership/beneficial interest. The Tribunal concluded that the layered routing of funds through third parties itself establishes benami character, and that the corporate entities acted as benamidars for the beneficial owners. Accordingly, the provisional attachments were upheld and all appeals were dismissed.
FULL TEXT OF THE ORDER OF APPELLATE TRIBUNAL UNDER SAFEMA AT NEW DELHI
By a batch of appeals filed under Section 46 of the Prohibition of Benami Property Transactions Act, 1988 (in short “the Act of 1988”), a challenge has been made to the order dated 14.11.2023 passed by the Adjudicating Authority, PBPTA, Mumbai confirming the provisional attachment of the properties while answering the reference sent by the Initiating Officer.
