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TMI Blog2024 (12) TMI 238X X X X Extracts X X X X X X X X Extracts X X X X ..... ers under trust rather it was for purpose of getting it converted to monetize, thus we do not find that the case in hand would fall under one of exception to section 2(9)(A) of the Act of 1988 and therefore, the judgment of Tribunal in Sivashankari Anr [ 2024 (9) TMI 130 - APPELLATE TRIBUNAL UNDER SAFEMA AT NEW DELHI] and so as the judgment of the Apex court in the case of Sri Marcel Martins (supra) would have no application. In those cases, the property was given to others on trust and not for its use for illegal purpose or any other purpose and therefore, it was found to be a simple case of passing of the property to keep it in fiduciary capacity which is not the case in hand. Thus, we are unable to accept the first argument raised by the counsel for the appellant. Notice was served to Nitin Gupta u/s 24(1) of the Act of 1988 treating him to be benamidar of the cash recovered from Mohit Garg, Raj Kumar Sharma and Devendra Kumar Jha - As at the time of issuance of the notice, the IO had relied on the material available on record at the relevant time. However, during the course of adjudication, there was change in the statement of appellant Nitin Gupta and accordingly the order was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n version, the case was adjudicated by the Adjudicating Officer as per the material found available with it. In the light of the aforesaid, we are unable to accept even the last argument of the appellant. Appeal fails. - JUSTICE MUNISHWAR NATH BHANDARI : CHAIRMAN And SHRI BALESH KUMAR : MEMBER For the Appellants : Mr. Aditya Chaudhary, Adv. At Sl.No.1 Appellant himself at Sl.No.2 Ms. Ishita Farsaiya, Adv. At Sl.No.3 Mr. Aditya Chaudhary, Adv. At Sl.No.4 For the Respondent : Mr. Kanhaiya Singhal, Adv ORDER 1. By this appeal under Section 46(1) of Prohibition of Benami Property Transactions Act, 1988 (in short, the Act of 1988), a challenge has been made to the order dated 16.10.2019 passed by the Adjudicating Authority confirming the attachment and also the reference sent by the initiation officer. 2. The brief facts of the case: a) The learned counsel for the appellant submitted that at the time of demonetization of currency notes of Rs. 1000 and 500, jewellers were the first to be approached by high network individuals for purchase of gold. The appellant Nitin Gupta was also contacted by many individuals. The appellant Nitin Gupta was however, not involved in sale of gold bullio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... transaction involved for the cash of Rs. 3,70,89,400/- recovered from Mohit Garg, Raj Kumar Sharma and Devendra Kumar Jha as they categorically stated that the amount belongs to appellant Nitin Gupta. In view of the above, a case of benami transaction would not be made out because the cash found with the three persons named above was held on trust of Nitin Gupta. The case would accordingly fall under one of the exceptions to Section 2(9)(A) of the Act of 1988 as amended by the Amending Act of 2016. The benamidars appellant before this Tribunal were holding the cash on trust under fiduciary capacity. The Adjudicating authority ignored the aforesaid aspect while confirming the reference and the attachment of the property. 4. The learned counsel for the appellant elaborately argued the issue as to in what cases the property held by someone else on trust can be taken to be under fiduciary capacity. A specific reference to the definition of benami transaction amended by the Act of 2016 was given and for that specifically section 2(9)(A) was referred. A reference to clause (b)(ii) of the aforesaid provision was given to indicate exception to the aforesaid provision. In case, the propert ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for the appellant submitted that when the amount was recovered from Mohit Garg, Raj Kumar Sharma and Devendra Kumar Jha, it was categorically disclosed to be of the appellant Nitin Gupta. The amount was found with the three persons named above in fiduciary capacity and in the light of the aforesaid, it would fall within one of the exceptions to Section 2(9)(A) which is reproduced hereunder for ready reference: Section 2 (9) benami transaction means (A) a transaction or an arrangement (a) where a property is transferred to, or is held by, a person, and the consideration for such property has been provided, or paid by, another person; and (b) the property is held for the immediate or future benefit, 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 s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ha is the demonetized money said to be belonging to the appellant Nitin Gupta as per his letter. The pleas have been taken that the amount was given to three persons on trust and thus, they were holding it in fiduciary capacity. If the simple test is applied to bring a case in one of the exceptions given under section 2(9)(A) of the Act of 1988, it can be accepted but the case has checkered history. It has been admitted by the parties that what was recovered from Mohit Garg, Raj Kumar Sharma and Devendra Kumar Jha is the demonetized money. The allegation is that the money was given to them to get monetized money and therefore, purpose of giving money to them was not to keep it with them in fiduciary capacity but for other purposes. The issue further required to be seen is whether in a case where the money was transferred to others by means other than legal then, can it fall under one of the exceptions under section 2(9)(A) of the Act of 1988. The answer to the issue is that if the money has been given or passed on to others for illegal purposes or the purpose other than legal then, holding of the property cannot be said to be in fiduciary capacity. It can be when it is given to a p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hould not be treated as benami property. (2) Where a notice under sub-section (1) specifies any property as being held by a benamidar referred to in that sub-section, a copy of the notice shall also be issued to the beneficial owner if his identity is known. The perusal of section 24(2) would reveal that a copy of notice under Section 24(1) is to be given to the beneficial owner if his identity is known. In the instant case, at the stage of reference, the identity of beneficial owner was not known therefore, all were taken to be benamidar and accordingly notice was issued under section 24(1) of the Act of 1988. Once a copy of notice under section 24(1) is given then as per sub-section (2) of Section 24, the beneficial owner can be identified for which no separate notice under Section 24(2) is required rather Section 24(2) requires a copy of the notice under sub-section (1) the beneficial owner if his identify is known. In the instant case, the identity of the beneficial owner was not known at the time of issuance of the notice. It could be revealed during the process of adjudication in pursuance to the notice under Section 24(1) of the Act of 1988 of which a copy was served on appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and in response to which he stated that he has some business relationship with M/s Aadi traders. Further, in his reply dated 10th July. 2017, he admitted that he had given some cash to Sh. Mohit Garg but stated that such cash belonged to M/s Aadi Traders, Sh. Shashank Jain and Sh. Prateek Bansal. Sh. Shashank Jain in his statement, which was recorded on oath u/s 131(1A) of the 1.T. Act, 1961 on 06.03.2017, denied giving any cash to Sh. Nitin Gupta and M/s Aadi Traders also denied the same. Sh. Prateek Bansal accepted having given some cash to Sh. Nitin Gupta but stated that such cash belonged to Sh. Anirudh Aggarwal, Sh. Ravi Aggarwal and Sh. Vinod Deshmukh. Thus, the real owners of the cash could not be established, as per the information submitted to this office by ADIT, Unit-7(4), Delhi. It is to demonstrate that at the time of issuance of the notice, the IO had relied on the material available on record at the relevant time. However, during the course of adjudication, there was change in the statement of appellant Nitin Gupta and accordingly the order was passed holding him to be the beneficial owner. The appellant Nitin Gupta in his statement dated 26.09.2018 u/s 19(1)(b) of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) has also been given which defines the property which means asset of any kind whether movable or immovable, tangible or intangible, corporeal or incorporeal and includes any right or interest or legal document or interest evidencing title or interest in the property etc. The case of the appellant is that demonetized money had no fair market value and thus, could not have been termed to be property. We find no force in the argument because the currency notes of 1000 and 500 were demonetized by the Government of India but with the permission to tender the notes for getting monetized money. The period for it was given and thereby, the demonetized money could have been used for getting it to be monetized. The time was extended by the RBI and if aforesaid is taken into consideration with the date of search and seizure, it would become clear that on the date of search and seizure the demonetized money could have been converted into monetized with its deposit in the bank and could have been by way of tender. It was thus a property with its fair market value. Thus, we are unable to accept the argument of the counsel for the appellant that demonetized money was not having fair market value ..... X X X X Extracts X X X X X X X X Extracts X X X X
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