Acting under the Prohibition of Benami Property Transactions Act that kicked in from November 1, 2016, the Income Tax Department (ITD) has provisionally attached more than 900 benami properties including flats, shops, jewellery and vehicles worth over Rs 3,500 cr.
The Act provides for provisional attachment and subsequent confiscation of benami properties, both movable and immovable. It also allows for prosecution of the beneficial owner, the benamidar and the abettor to benami transactions, which may result in rigorous imprisonment up to 7 years and a fine of up to 25 per cent of fair market value of the property.
The department had set up 24 dedicated Benami Prohibition Units (BPUs) under its Investigation Directorates all over India in May, 2017 to ensure swift action in the matter of Benami properties.
Benami literally means 'without a name'. An asset without a legal owner or a fictitious owner is called benami. The original Benami Act was introduced in 1988 for prevention of black money and was amended in 2016 to prohibit benami transactions and provides for confiscating benami properties.
The Benami Act defines a benami transaction as a transaction where a property is held by or transferred to a person, but has been provided for or paid by another person. The 2016 Bill amended this definition to add other transactions that qualify as benami. It includes properties where the transaction is made in a fictitious name, or the owner denies knowledge of the ownership of the property, or the person providing the consideration for the property is not traceable.
ITD said that in five cases, the provisional attachments of Benami properties, amounting to more than Rs 150 cr have been confirmed by the Adjudicating Authority. In one such case, it was established that a real estate company had acquired about 50 acres of land, valued at more than Rs 110 cr, using the names of certain persons of no means as benamidars, it said without naming the firm. This was corroborated from the sellers of the land as well as the brokers involved.
In another case, post demonetisation, two assessees were found depositing demonetised currency into multiple bank accounts in the names of their employees and associates to be ultimately remitted to their bank accounts. The total amount attempted to be remitted to the beneficial owners was about Rs 39 cr.
In another case, a cash amount of Rs 1.11 cr was intercepted from a vehicle with a person who denied the ownership of this cash. Subsequently, no one claimed ownership of this cash and it was held to be benami property by the Adjudicating Authority.