2024 (9) TMI 717 - AT - Benami Property

Benami transaction - Attachment of sum towards chit funds in the name of the appellants and another maturity value of the chit funds - reliance on sworn statement u/s 108 of the Custom Act - HELD THAT - There are catena of judgment of the Hon ble Apex Court to deny reliance on a sworn statement recorded u/s 108 of Custom Act or it may be Section 132(4) of the Income Tax Act for conviction of a person. Those judgments of the Hon ble Apex Court operate on the prosecution case against the accused but would not apply to the proceedings, which does not involve conviction of the person rather is taken up on revenue side. The marked difference between two type of proceedings has to recognized. For conviction of a person there would be necessity to apply the process given under CrPC and even under Evidence Act which is not mandated for the proceedings by the Revenue for attachment or for imposition of penalty. In the light of the aforesaid, we are unable to accept first argument raised by the appellant. Since we have decided the first issue against the appellant and thereby sworn statement u/s 132(4) of Income Tax Act can be relied even in the proceedings under the Act of 1988. The respondents were not under obligation to record separate statement by holding enquiry. In fact, the Initiating Officer had taken up issues while passing the order and appeal before the Adjudicating Authority, all the issues raised by the Appellants were threshold decided. The argument of the Counsel for the Appellant is that even the chits in the name of the Appellant was out of the sources disclosed by him while it is a fact that in the statement recorded u/s 132(4) of the Income Tax Act it was admitted that chit fund was operated at the instance of Rajesh of M.R. Traders. The arguments have been raised against the sworn statement of the Appellant and others to prove the case. It is apart from the fact that the appellant failed to produce a document to prove income from poultry or agriculture while the certificate of VEO was submitted. It is said to be based on the enquiry and not in reference to revenue record. VEO is custodian of revenue record and could have certified the agricultural activities on the land but the certificate issued by him was based on the information and not the revenue record. Thus, the Adjudicating Authority rightly clarified the position aforesaid to hold it to be case of benami transaction. The appellant has taken a plea that income from the agriculture and poultry was not such which required Income Tax Return. Argument aforesaid was also analyzed by the Adjudicating Authority and found that as per the deposed statement on 26.09.2017 the appellant has shown his income of Rs. 15,000/- per month from salary and Rs. 2,00,000/- per annum from poultry business. Putting together these amounts, his income other than agriculture activity was well above taxable limits, yet no income tax return was submitted. Thus, each aspect of the matter was considered by A.A. and finding only lame excuses taken by the appellant, the arguments were not accepted. We do not find any error in the order and otherwise we have made detailed discussion of each issue raised before us but finding no merit in any of the issue, the appeals there fail and are dismissed.

Summary

Issues Involved:
1. Legality of relying on sworn statements under Section 132(4) of the Income Tax Act in proceedings under the PBPT Act, 1988.
2. Evidence and proof of income sources for the appellant's assets.
3. Confirmation of the Adjudicating Authority's order regarding the attachment of properties as benami.

Issue-wise Detailed Analysis:

1. Legality of relying on sworn statements under Section 132(4) of the Income Tax Act in proceedings under the PBPT Act, 1988:
The appellant argued that the sworn statement recorded under Section 132(4) of the Income Tax Act could not be relied upon in proceedings under the PBPT Act. The appellant cited the Andhra Pradesh High Court judgment in Gajam China Yallappa Vs. Income Tax Officer, which states that retracted statements lose their evidentiary value and require additional support for passing an order of assessment. However, the Tribunal referred to the Bombay High Court's decision in Vinod M. Chitalia Vs. Union of India, which held that statements recorded under Section 108 of the Customs Act could be used in other adjudicating proceedings. The Tribunal concluded that sworn statements under Section 132(4) of the Income Tax Act are judicial in nature and can be relied upon in proceedings under the PBPT Act, thus rejecting the appellant's argument.

2. Evidence and proof of income sources for the appellant's assets:
The appellant claimed that the assets, including vehicles and chit funds, were acquired from agricultural income and poultry farming. The appellant provided certificates from the Village Extension Officer (VEO) and other documents to support his claims. However, the Adjudicating Authority found that the certificates were based on information rather than revenue records. The Tribunal noted that the appellant failed to produce substantial evidence to prove income from poultry or agriculture. The bank account analysis revealed that funds were transferred from business concerns of Mr. Rajesh, indicating benami transactions. The Tribunal emphasized that the appellant's income from salary and poultry business exceeded taxable limits, yet no income tax return was filed, further weakening his claims.

3. Confirmation of the Adjudicating Authority's order regarding the attachment of properties as benami:
The Adjudicating Authority confirmed the order for attachment of properties, including chit funds, as benami transactions. The Tribunal reviewed the details of the benami properties and the appellant's failure to provide satisfactory explanations for the source of funds. The Tribunal highlighted the transfer of significant amounts to business concerns of Mr. Rajesh, which supported the conclusion of benami transactions. The Tribunal found no merit in the appellant's arguments and upheld the Adjudicating Authority's order, dismissing the appeals.

Conclusion:
The Tribunal dismissed the appeals, affirming the Adjudicating Authority's order that the properties, including chit funds, were benami transactions. The Tribunal held that sworn statements under Section 132(4) of the Income Tax Act could be relied upon in proceedings under the PBPT Act and found that the appellant failed to provide sufficient evidence to prove legitimate sources of income for the assets in question.