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2024 (11) TMI 625 - AT - Benami PropertyBenami Property Transactions - attachment and the reference made by the Initiating Officer (IO) - allegation against the appellant was for acquisition of benami properties while he was employee of Piyush Gupta, the defendant No.2 before the Adjudicating Authority. The appellant was getting meagre salary of Rs. 15,000/- per month. However, during the course of search and seizure, it was found that the appellant Mohd. Farooq made investment of Rs.1,41,37,500/- - HELD THAT - We find that the appellant could not produce any document worth acceptance to prove the source of income for purchase of properties for the total value of Rs.1,41,37,500/- which includes the property at Item No.8 of Table A but even for the properties mentioned at Item Nos. 1 to 7, the appellant failed to prove the source for its acquisition. Appellant has tried to make out a case for disclosure of source of income by submitting the documents along with the rejoinder but they have not been accepted in absence of application for taking additional documents on record at the appellate stage and otherwise it was not pressed by the appellant. We otherwise find that the assessment order for the block period 2011-12 to 2021-22 is subsequent to the impugned order and cannot support the appellant. The perusal of the assessment order otherwise shows the conduct of the appellant as he could not show source to acquire the properties while his statements were recorded under Section 19 of the Act but submitted I.T. return subsequent to it. The addition of income can be acceptable under the Income-Tax Act but it cannot be used for adjudication under the Act of 1988 and otherwise if the practice adopted by the appellant is accepted, every benamidaror beneficial owner get the assessment of block years by one order after paying the income tax and penalty without submission of proof of income before the IO or the Adjudicating Authority. We have made comment in reference to the assessment order though a serious objection of the document has been taken and as such we have not recorded our finding going deep in the assessment order but touching the legal background under which assessment of income by the Income-tax authority has been made vis- -vis the adjudication under the Act of 1988. The detailed finding recorded by the Adjudicating Authority rather disclosed as to how the benami properties came in the name of the appellant benamidar. The finding in regard to each benami property has been recorded. The payment to acquire the property said to have been made largely in cash without disclosing the source for acquiring the cash. The Adjudicating Authority has made detailed discussion for purchase of each property vis- -vis the source of income. Thus, finding that the appellant failed to submit the material to prove the source of income before the Adjudicating Authority and even while filing the appeal, no document was submitted to prove the source for acquisition of property. The documents submitted along with rejoinder were without permission of the appellate court and were not relied later on by the counsel. The learned counsel for the appellant referred to the judgment of the Apex Court in the case of GanpatiDealcom 2022 (8) TMI 1047 - SUPREME COURT and more specifically reference of Paras 67,68,124 and 125 has been given. The fact, however, remains that the Apex Court has recalled its judgment in the case of GanpatiDealcom (supra) by the order 2024 (10) TMI 1120 - SC ORDER (LB) Thus, argument raised by the appellant in reference to the aforesaid judgment no more holds field. We have otherwise analyzed the case to find out the source to acquire the property by the appellant and finding no material favourable to the appellant, the appeal would fail and is dismissed.
Issues Involved:
1. Legality of the attachment order under the Prohibition of Benami Property Transactions Act, 1988. 2. Application of the amended provisions of the Act of 1988 retrospectively. 3. Proof of sources for acquisition of alleged benami properties. 4. Consideration of additional documents at the appellate stage. 5. Impact of the Supreme Court judgment in the case of GanpatiDealcom. Detailed Analysis: 1. Legality of the Attachment Order: The appellant challenged the order dated 24.06.2022 by the Adjudicating Authority, which confirmed the attachment of properties under the Prohibition of Benami Property Transactions Act, 1988. The appellant argued that the order was passed in ignorance of the facts and applicable legal provisions, erroneously confirming the attachment of properties as benami transactions. The Adjudicating Authority held the appellant to be the benamidar of several properties, except one, under different sub-sections of Section 2(9) of the Act of 1988, as amended by the Amending Act of 2016. The appellant contended that the properties could not be attached under two distinct provisions simultaneously, indicating a contradictory view. 2. Application of Amended Provisions Retrospectively: The appellant contended that properties at Item Nos. 1 and 2 of Table 'A' and Property No. 1 of Table 'C' were acquired before the amendment of the Act of 1988 by the Notification dated 25.10.2016, which came into force on 01.11.2016. The appellant argued that the amended provisions could not be applied retrospectively, citing the Supreme Court judgment in Union of India Vs. GanpatiDealcom. The respondent countered that the properties at Item Nos. 1 and 2 of Table 'A' were actually purchased on 04.12.2016, after the amendment, making the amended provisions applicable. The Tribunal noted a discrepancy in the purchase date mentioned in the impugned judgment but upheld the application of the amended provisions. 3. Proof of Sources for Acquisition of Properties: The appellant claimed to have disclosed sources for acquiring the properties, allegedly with the support of his employer. However, the Tribunal found that the appellant failed to provide sufficient material to prove the sources of acquisition. The appellant's income was limited, with no substantial income or tax returns to support the acquisition of properties worth Rs.1,56,37,500/-. The Adjudicating Authority found that the appellant, earning a meager salary, could not show the source for acquiring such valuable properties. It was also revealed that Piyush Gupta, the appellant's employer, acted as a middleman without sufficient income to invest in the properties. 4. Consideration of Additional Documents: The appellant submitted additional documents at the appellate stage without an application for their consideration. The Tribunal accepted the respondent's objection to these documents, as they were not part of the original proceedings. The appellant did not press for these documents, which were deemed insufficient to prove the sources for property acquisition. The Tribunal emphasized that additional documents could only be considered at the appellate stage if an application was filed and accepted, which was not done in this case. 5. Impact of Supreme Court Judgment in GanpatiDealcom: The appellant relied on the judgment in GanpatiDealcom to argue against the retrospective application of the amended provisions. However, the Tribunal noted that the Supreme Court had recalled its judgment in GanpatiDealcom by an order dated 18.10.2024. Consequently, the appellant's reliance on this judgment was no longer valid. The Tribunal concluded that the appellant failed to prove the source of income for acquiring the properties and dismissed the appeal, finding no material favorable to the appellant's case.
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