Kanhaiya Lal Agarawal Vs Initiating Officer (Appellate Tribunal Under SAFEMA Delhi)
SAFEMA Tribunal Upholds Benami Attachment of ₹65 Lakh Hawala Cash; Delayed Retraction of Statement Held to Be an Afterthought
The Appellate Tribunal under SAFEMA dismissed the appeal filed by Kanhaiya Lal Agarawal, upholding the provisional attachment of ₹65 lakh in cash under the Prohibition of Benami Property Transactions Act, 1988. The cash had been seized by the police during an interception in Gonda in connection with investigations into an alleged hawala network. In his statement recorded under Section 131(1A) of the Income-tax Act, the appellant admitted that he worked as a cash handler, earned commission for transporting cash, and stated that the seized cash belonged to one Sita Ram, though he failed to furnish any details or documentary evidence regarding the alleged owner.
The Tribunal held that the appellant’s subsequent retraction before the Adjudicating Authority, claiming that the cash actually belonged to him, was belated and an afterthought. It observed that no explanation was offered for not retracting the statement immediately after it was recorded. The Tribunal found that the original statement, coupled with the recovery of ₹65 lakh and the appellant’s inability to disclose any legitimate source or identify the alleged real owner, sufficiently established a prima facie benami transaction. Once the authorities discharged the initial burden, the burden shifted to the appellant to substantiate his defence, which he failed to do.
The Tribunal also rejected the argument that the Income-tax assessment accepting the appellant’s returned income precluded proceedings under the PBPT Act. It noted that the appellant’s declared income was only ₹3.52 lakh, whereas the seized cash was ₹65 lakh, and emphasised that subsequent assessment or payment of tax cannot defeat the object of the Benami Act. Accepting such a plea would frustrate the very purpose of the legislation. Holding that provisional attachment was necessary to prevent the cash from being dissipated, the Tribunal dismissed the appeal and upheld the attachment.
FULL TEXT OF THE JUDGMENT APPELLATE TRIBUNAL UNDER SAFEMA AT NEW DELHI
