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2025 (2) TMI 323 - AT - Benami PropertyBenami transaction - Provisional Attachment Order - Beneficial Owner - HELD THAT - We observe that the alleged Benami Property has been attached by the Enforcement Directorate under provisions of the Prevention of Money Laundering Act 2002. However we note that in the criminal prosecutions undertaken no action has been initiated against Shri Ravindra Kumar Proprietor M/s R K Emporium. Respondent No. 2 has also not been prosecuted as an accused under PMLA. We find that the parameters of classifying a transaction as either Benami or Money Laundering are separate as is evident from the definition clauses of PBPTA and PMLA. Moreover the investigation has itself revealed that the funds were transferred from M/s Yashawini Exports which is owned and controlled by Shri Yogesh Mittal and not By Shri Ravindra Kumar the alleged Beneficial Owner. Appeal dismissed.
ISSUES PRESENTED and CONSIDERED
The core issue considered by the Appellate Tribunal was whether the transaction involving the transfer of Rs. 80,00,000/- from M/s Yashawini Exports to the accounts maintained by Shri Ramesh Chand Sharma, and subsequently to M/s R K Emporium, constituted a Benami Transaction under Section 2(9) of the Prohibition of Benami Property Transactions Act, 1988 (PBPTA). ISSUE-WISE DETAILED ANALYSIS Relevant Legal Framework and Precedents: The central legal framework involved is the Prohibition of Benami Property Transactions Act, 1988, particularly Section 2(9), which defines Benami Transactions. The Act aims to prohibit Benami transactions and the right to recover property held Benami. The Tribunal also referenced the Prevention of Money Laundering Act, 2002 (PMLA) due to the involvement of the Enforcement Directorate in related investigations. Court's Interpretation and Reasoning: The Tribunal examined whether the transaction could be classified as Benami by considering the evidence presented, the nature of the transactions, and the relationship between the parties involved. The Tribunal emphasized the need for concrete evidence to establish that the funds were infused by the alleged Beneficial Owner, Shri Ravindra Kumar, to legalize demonetized currency. Key Evidence and Findings: The Tribunal noted the absence of evidence proving that the funds transferred by M/s Yashawini Exports were infused into the accounts by Shri Ravindra Kumar. The Tribunal also considered the prior transactions between M/s Yashawini Exports and the entities managed by Shri Ramesh Chand Sharma, which predated the demonetization period, indicating a pattern of business dealings. The Tribunal reviewed the documentary evidence, including bank account statements, sale and purchase bills, and transport documents (bilties), which supported the Respondent's claim of legitimate business transactions. It was noted that payments to the transporter were made through banking channels with TDS deductions, further supporting the legitimacy of the transactions. Application of Law to Facts: The Tribunal applied the definition of Benami Transactions under the PBPTA to the facts presented. It concluded that the evidence did not support the classification of the transaction as Benami, as there was no proof of the alleged Beneficial Owner's involvement in infusing demonetized currency into the accounts. Treatment of Competing Arguments: The Appellant argued that the transactions were Benami, citing the timing during demonetization and the alleged use of shell entities. However, the Tribunal found these arguments speculative and unsupported by evidence. The Respondent's arguments, supported by documentary evidence, were found to be more persuasive, demonstrating legitimate business activities. Conclusions: The Tribunal concluded that the transaction did not meet the criteria for a Benami Transaction under the PBPTA. The appeal was dismissed due to a lack of merit, as the evidence did not substantiate the Appellant's claims. SIGNIFICANT HOLDINGS The Tribunal held that the absence of evidence linking the alleged Beneficial Owner to the infusion of demonetized currency was crucial in determining the nature of the transaction. It emphasized that speculative arguments without supporting evidence could not establish a Benami Transaction. In its final determination, the Tribunal dismissed the appeal, upholding the decision of the Adjudicating Authority not to confirm the Provisional Attachment Order. The Tribunal reiterated that the parameters for classifying a transaction as Benami or Money Laundering are distinct, and the evidence did not support the Appellant's claims under the PBPTA.
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