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TMI Blog2024 (9) TMI 718X X X X Extracts X X X X X X X X Extracts X X X X ..... ould be simpliciter in those cases where the money has been kept with other person on trust for safe custody. It would not apply even in the cases where a conflict exist in regard to the relationship and the fiduciary should not be to make profit. It can be illustrated further but looking to the limited issue involved in the present case and as there is no allegation against the respondents for putting the money with the employees against any of the principle laid down by the Supreme Court [ 2015 (12) TMI 1775 - SUPREME COURT ] RBI Vs. Jayanti Lal N. Mistry the elaborate discussion is not made however, this order would apply in the case where a person stand in the fiduciary capacity towards others simpliciter. As statement of the witnesses have been analyzed by the Adjudicating Authority at length and for that even the statements have even been quoted. The fact remains that the alleged benamidar did not claim right and ownership on the property and at the same time alleged beneficial owner did not disown the cash found with the alleged benamidar rather claimed it to be their. The Income Tax Assessment was made adding the amount in the income of the beneficial owners which obviously ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ound at the residence of Jiten Pujari which also belongs to Shiv Shankar Sharma. The common plea was taken that cash was given to the benamidar, i.e. Jiten Pujari and others for safe custody being the employees of Shiv Shankar Sharma and brothers holding M/s Noble India Construction Company. 6. The affidavits were submitted even by Ratan Kumar Sharma and Shiv Shankar Sharma where they stated that cash found in the lockers was kept in the name of Jitender Pujari and Venkatesh Shenoy. It belongs to the proprietor of firm, Shiv Shankar Sharma. The Adjudicating Authority however did not find it to be a case of benami transaction and thereby refused to confirm the attachment order. It was in ignorance of the definition of benami transaction given under section 2(9)(A) of the Act of 1988, as amended with effect from 01.11.2016. 7. The learned Adjudicating Authority even failed to note variance in the statement of the witnesses who changed their version from time to time. Initially, Jiten Pujari and Venkatesh Shenoy stated that cash belongs to Ratan Kumar Sharma whereas other bank locker holder Siya Ram Pandey stated that cash was given to him by Jiten Pujari though it belongs to Shiv Sha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... belonging to them and said to have been given to the employees for the safe custody. The Adjudicating Authority has taken note of the factual matrix available on record. It came to the conclusion that cash was belonging to the alleged beneficial owner lying in the lockers of the alleged benamidars. It was however for the safe custody. Thus alleged benamidars were holding the cash in the fiduciary capacity. In those circumstances, it was falling under one of the exception given under sub-clause (ii) to section 2(9)(A) of the definition of benami transaction as amended by the Amending Act of 2016. The Adjudicating Authority thus rightly decided the reference and refused to confirm the attachment of the cash amount. The prayer was made to dismiss the appeal. 10. We have considered the rival submission and perused the record carefully. The brief facts of the case has been given while referring to the rival submissions of the parties. Thus, we need not to reiterate the facts already narrated. 11. It is a case wherein a search and survey proceedings under section 132/133(A) of the Income Tax Act was conducted in which sum of Rs. 9,94,00,000/- was found in four different lockers in the na ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... property carried out or made in a fictitious name; or (C) a transaction or an arrangement in respect of a property where the owner of the property is not aware of, or, denies knowledge of, such ownership; (D) a transaction or an arrangement in respect of a property where the person providing the consideration is not traceable or is fictitious; Explanation. For the removal of doubts, it is hereby declared that benami transaction shall not include any transaction involving the allowing of possession of any property to be taken or retained in part performance of a contract referred to in section 53A of the Transfer of Property Act, 1882, if, under any law for the time being in force, (i) consideration for such property has been provided by the person to whom possession of property has been allowed but the person who has granted possession thereof continues to hold ownership of such property; (ii) stamp duty on such transaction or arrangement has been paid; and (iii) the contract has been registered. 13. The perusal of section 2(9)(A (ii) would show exception to the definition therein. The benami transaction would be when transfer or holding of the property is by a person whose consid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for another, a trustee, a person holding the character of a trustee, or a character analogous to that of a trustee with respect to the trust and confidence involved in it and the scrupulous good faith and condor which it requires; a person having the duty, created by his undertaking, to act primarily for another s benefit in matters connected with such undertaking. Also more specifically, in a statute, a guardian, trustee, executor, administrator, receiver, conservator or any person acting in any fiduciary capacity for any person, trust or estate. 17. Words and Phrases, Permanent Edition (Vol. 16-A p. 41) defines Fiducial Relation as under: There is a technical distinction between a fiducial relation ‟ which is more correctly applicable to legal relationships between parties, such as guardian and ward, administrator and heirs, and other similar relationships, and confidential relation ‟ which includes the legal relationships, and also every other relationship wherein confidence is rightly reposed and is exercised. Generally, the term fiduciary ‟ applies to any person who occupies a position of peculiar confidence towards another. It refers to integrity and fidelit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fic purpose of investment, collector of city taxes who retains money officially collected, one who receives a note or other security for collection. In the following cases debt has been held not a fiduciary one; a factor who retains the money of his principal, an agent under an agreement to account and pay over monthly, one with whom a general deposit of money is made. 21. We may at this stage refer to a recent decision of this Court in Central Board of Secondary Education and Anr. v. Adiya Bandopadhyay and Ors. (2011) 8 SCC 497, where Ravindeeran, J. speaking for the Court in that case explained the term fiduciary ‟ and fiduciary relationship ‟ in the following words: 39. The term fiduciary refers to a person having a duty to act for the benefit of another, showing good faith and candour, where such other person reposes trust and special confidence in the person owing or discharging the duty. The term fiduciary relationship is used to describe a situation or transaction where one person (beneficiary) places complete confidence in another person (fiduciary) in regard to his affairs, business or transaction(s). The term also refers to a person who holds a thing in trust ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... efit of another person. 19. The scope of the fiduciary relationship would be governed on the principle given above and taking into consideration the other aspects. 20. The reference of the Judgement of the Apex Court (Supra) is to guide the case. The fiduciary capacity cannot be used as an exception in all the circumstances which may include transfer of property for or is held for illegal purpose. It cannot be even when there is a concluded contract which pass on the title to others then keeping the property by the person on whose favour title gets transferred would not keep it in fiduciary capacity rather with the transfer of the title, the relationship would also change and those cases would not fall in the sweep of the exception of fiduciary capacity. It would be simpliciter in those cases where the money has been kept with other person on trust for safe custody. It would not apply even in the cases where a conflict exist in regard to the relationship and the fiduciary should not be to make profit. It can be illustrated further but looking to the limited issue involved in the present case and as there is no allegation against the respondents for putting the money with the employ ..... X X X X Extracts X X X X X X X X Extracts X X X X
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