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2024 (11) TMI 623

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..... has taken note of the fact that the transaction in question is prior to the amendment by the Amending Act, 2016 but finding has been recorded adverse to the appellant by treating amending provision to have retrospective application. Though, now the position is clear in the light of the judgement of Union of India Anr. Versus M/s. Ganpati Dealcom Pvt. Ltd. [ 2022 (8) TMI 1047 - SUPREME COURT ] that it has prospective application. Therefore, we need not to refer detailed facts of the case regarding the purchase of the property and source disclosed by the appellant being a transaction prior to 01.11.2016 and is not falling u/s 2 (9A) of the amended provision. We find that the impugned order has been passed while considering the facts of the case but treating it to be a case u/s 2 (9) (A) of the Amending Act though the person alleged to have provided the consideration for purchase of the property is not known. Adjudicating Authority in the discussion part recorded that transaction fall under section 2 (9) (A) in ignorance of the fact that beneficial owner has not been identified. In fact, it was through out considered to be a case falling u/s 2 (9B) of the Act of 1988 as amended by th .....

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..... foresaid came subsequent to the impugned order and accordingly it was not applied by the Adjudicating Authority. The case in hand is squarely covered by the Judgement of the Apex Court in the case of the Union of India Anr. Versus M/s. Ganpati Dealcom Pvt. Ltd. 4. The learned counsel for the appellant however gave bifurcation of the amount used for purchase of land for disclosing the source of the funds. The amount of Rs. 13,50,000/- was out of loan and sale of the property etc. The amount of Rs. 28,82,500/- was out of appellant s own income and securities resulting in sufficient resources to acquire the property and it is for that reason alone, the respondent could not identify the beneficial owner. 5. In the light of the aforesaid and as the purchase of the property is admittedly prior to the amendment by the Amending Act of 2016 w.e.f. 01.11.2016, the impugned order deserves to be set aside. 6. The learned counsel for the appellant made reference to certain paras of the impugned order to indicate that even according to the I.O., the beneficial owner of the property remain unidentified or suspicious. Thus, the case in hand was not falling under section 2 (9) (A) of the Act of 198 .....

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..... rs of the aforesaid property. However, the beneficial owner of the property is not ascertained. 9. The reiteration of the aforesaid fact exist even in subsequent paras in reference to the reply of the defendant . Para 15 to 17 of the order in reference to the reply of the defendant are also reproduced hereunder:- 15. In the backdrop of aforementioned facts and circumstances, the proceedings initiated under the Prohibition of Benami Transaction Act, 1988 are illegal and without jurisdiction particularly when the assessee had clearly explained the sources of finance for the acquisition of agricultural land in question. The invocation of Section 24 of the Prohibition of Benami Transaction Act, 1988 is not warranted as the provisions of Section 2 (9A) are not applicable to the facts of this case. 16. It is further pertinent to note that Respondent is in actual possession of demised property and is utilizing the same for his own purposes. Reliance is place on the judgment in the case of Jobhiram V/s CIT (1994) 12 ITR 110 (Pat.), and in the case of Krishna Kumar V/s Hanuman Das (1991) 56 Taxman 233 Del. wherein it is held that if documents of title to property are in assessee's name, .....

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..... enefit, direct or indirect, of the person who has provided the consideration , except when the property is held by (i) a Karta, or a member of a Hindu undivided family, as the case may be, and the property is held for his benefit or benefit of other members in the family and the consideration for such property has been provided or paid out of the known sources of the Hindu undivided family; (ii) a person standing in a fiduciary capacity for the benefit of another person towards whom he stands in such capacity and includes a trustee, executor, partner, director of a company, a depository or a participant as an agent of a depository under the Depositories Act, 1996 and any other person as may be notified by the Central Government for this purpose; (iii) any person being an individual in the name of his spouse or in the name of any child of such individual and the consideration for such property has been provided or paid out of the known sources of the individual; (iv) any person in the name of his brother or sister or lineal ascendant or descendant, where the names of brother or sister or lineal ascendant or descendant and the individual appear as joint-owners in any document, and th .....

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..... Amendment Act, was unconstitutional for being manifestly arbitrary. 127.3 The 2016 Amendment Act was not merely procedural, rather, prescribed substantive provisions. 127.4) In rem forfeiture provision under Section 5 of the 2016 Act, being punitive in nature, can only be applied prospectively and not retroactively. 127.5) Concerned authorities cannot initiate or continue criminal prosecution or confiscation proceedings for transactions entered into prior to the coming into force of the 2016 Act, viz., 25.10.2016. As a consequence of the above declaration, all such prosecutions or confiscation proceedings shall stand quashed. 127.6) As this Court is not concerned with the constitutionality of such independent forfeiture proceedings contemplated under the 2016 Amendment Act on the other grounds, the aforesaid questions are left open to be adjudicated in appropriate proceedings. 14. The perusal of the para quoted above shows that amended provisions would not apply retrospectively rather it would have prospective application and thereby the transfer prior to 01.11.2016 not falling in the definition of the benami transaction under the section 2 (9) (A) of the Amending Act, 2016 would .....

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