My client handed demonetised notes to a trader who banked them and sent the money back the same day. Is that a benami transaction, and does the PMGKY declaration help?
On this order it is a benami transaction, and the declaration helps only on quantum. The Appellate Tribunal held that cash is property under s.2(26), that handing it over to the trader and its deposit in his account was a transfer and holding of property making him a benamidar under s.2(10), and that all the ingredients of s.2(9)(A) were made out. But because the declarant had already paid tax under the Pradhan Mantri Garib Kalyan Yojana and locked part of the sum in the interest-free bond, attachment could extend only to what was left.
Decided by the ITAT (Balesh Kumar, Member, and Rajesh Malhotra, Member) on 2026-04-30, reported as FPA-PBPT-150/KNP/2018. It bears on section Benami s.2(9)(A), section Benami s.2(10), section Benami s.2(26), section Benami s.24, section Benami s.26 of the Income Tax Act 1961, in Cash Transaction Limits and Evidence & Burden of Proof matters.
This is the common demonetisation fact pattern — cash handed to a trader, banked, and returned by RTGS the same day — and the order shows both that the argument 'cash for cash means no consideration' fails and that a PMGKY declaration on the same money reduces what can be attached. Both points go straight into the reply to the show-cause notice.
Binding on the AO and CIT(A) within the Tribunal's jurisdiction. Persuasive elsewhere.
Read aloud by your device. Press again to stop.
The appellant held about Rs. 5 lakhs in demonetised currency. On 12 November 2016 he handed it to Ghanshyam Patel, proprietor of M/s Shyama Trading Company, who deposited it in the firm's bank account and transferred the money back to the appellant by RTGS the same day. The Initiating Officer treated the routing as a benami transaction with Patel as benamidar and provisionally attached the appellant's bank balances, investments and immovable property to the extent of Rs. 5 lakhs. The Adjudicating Authority, by order dated 27 July 2018, confirmed the attachment of the bank balances and released the immovable property. Separately the appellant had declared Rs. 5 lakhs under the Pradhan Mantri Garib Kalyan Yojana, paying Rs. 2,47,500 in tax and depositing Rs. 1,25,000 in the interest-free bond.
The appeal was partly allowed and the adjudication order dated 27 July 2018 modified so that the attachment stood at Rs. 2,52,500, being the remaining liquid balance of Rs. 1,27,500 plus the bond amount of Rs. 1,25,000 (para 8). The finding that the transaction was benami was not disturbed.
Cash is movable property within s.2(26), so handing the notes to the trader and their deposit in the trading firm's account was a transfer and holding of property, which made the trader a benamidar within s.2(10) (paras 5 and 6). Each ingredient of s.2(9)(A) was satisfied: the property was transferred to and held by one person, the consideration was provided by another, and it was held for the benefit of the person who provided it. The Tribunal rejected the argument that a cash-for-cash routing involves no consideration, holding that on these facts consideration and property merge and are interchangeable (paras 5 and 6). On quantum, because Rs. 2,47,500 had already gone in tax under the Pradhan Mantri Garib Kalyan Yojana and Rs. 1,25,000 into the locked bond, only the remaining liquid balance together with the bond amount could be attached (para 7).
the impugned order dated 27.07.2018 is modified to the extent of attachment for sum of Rs. 2,52,500/-
Upload it and we will read it, work out your deadline and draft the reply. A CA reviews before anything is filed.
Handle my notice → Ask a CA on WhatsAppOn this order it is a benami transaction, and the declaration helps only on quantum. The Appellate Tribunal held that cash is property under s.2(26), that handing it over to the trader and its deposit in his account was a transfer and holding of property making him a benamidar under s.2(10), and that all the ingredients of s.2(9)(A) were made out. But because the declarant had already paid tax under the Pradhan Mantri Garib Kalyan Yojana and locked part of the sum in the interest-free bond, attachment could extend only to what was left. This was decided by the ITAT (Balesh Kumar, Member, and Rajesh Malhotra, Member) and bears on section Benami s.2(9)(A), section Benami s.2(10), section Benami s.2(26), section Benami s.24, section Benami s.26 of the Income Tax Act 1961. It is reported as FPA-PBPT-150/KNP/2018. This is the common demonetisation fact pattern — cash handed to a trader, banked, and returned by RTGS the same day — and the order shows both that the argument 'cash for cash means no consideration' fails and that a PMGKY declaration on the same money reduces what can be attached. Both points go straight into the reply to the show-cause notice. If it applies to you, the first step is this: Do not argue that a cash-for-cash routing lacks consideration; the Tribunal treated consideration and property as merged on these facts.
The appellant held about Rs. 5 lakhs in demonetised currency. On 12 November 2016 he handed it to Ghanshyam Patel, proprietor of M/s Shyama Trading Company, who deposited it in the firm's bank account and transferred the money back to the appellant by RTGS the same day. The Initiating Officer treated the routing as a benami transaction with Patel as benamidar and provisionally attached the appellant's bank balances, investments and immovable property to the extent of Rs. 5 lakhs. The Adjudicating Authority, by order dated 27 July 2018, confirmed the attachment of the bank balances and released the immovable property. Separately the appellant had declared Rs. 5 lakhs under the Pradhan Mantri Garib Kalyan Yojana, paying Rs. 2,47,500 in tax and depositing Rs. 1,25,000 in the interest-free bond. The matter was decided on 2026-04-30 by the ITAT (Balesh Kumar, Member, and Rajesh Malhotra, Member). On those facts the ITAT held as follows. The appeal was partly allowed and the adjudication order dated 27 July 2018 modified so that the attachment stood at Rs. 2,52,500, being the remaining liquid balance of Rs. 1,27,500 plus the bond amount of Rs. 1,25,000 (para 8). The finding that the transaction was benami was not disturbed.
Cash is movable property within s.2(26), so handing the notes to the trader and their deposit in the trading firm's account was a transfer and holding of property, which made the trader a benamidar within s.2(10) (paras 5 and 6). Each ingredient of s.2(9)(A) was satisfied: the property was transferred to and held by one person, the consideration was provided by another, and it was held for the benefit of the person who provided it. The Tribunal rejected the argument that a cash-for-cash routing involves no consideration, holding that on these facts consideration and property merge and are interchangeable (paras 5 and 6). On quantum, because Rs. 2,47,500 had already gone in tax under the Pradhan Mantri Garib Kalyan Yojana and Rs. 1,25,000 into the locked bond, only the remaining liquid balance together with the bond amount could be attached (para 7). In the words reproduced by the source cited on this page: "the impugned order dated 27.07.2018 is modified to the extent of attachment for sum of Rs. 2,52,500/-"
It was decided by the ITAT on 2026-04-30 and is reported as FPA-PBPT-150/KNP/2018. Binding on the AO and CIT(A) within the Tribunal's jurisdiction. Persuasive elsewhere. A Tribunal decision binds the assessing officer and the Commissioner (Appeals) within that Tribunal's jurisdiction, and is persuasive before other benches. It is not binding on a High Court, and a contrary co-ordinate bench decision will be argued against you, so check whether the point has been taken the other way before you build a reply around it. On section Benami s.2(9)(A), section Benami s.2(10), section Benami s.2(26), section Benami s.24, section Benami s.26, the practical question is whether the facts of your own notice match the facts of this case closely enough for the same rule to apply.
It cuts both ways and is cited by both sides. The appeal was partly allowed and the adjudication order dated 27 July 2018 modified so that the attachment stood at Rs. 2,52,500, being the remaining liquid balance of Rs. 1,27,500 plus the bond amount of Rs. 1,25,000 (para 8). The finding that the transaction was benami was not disturbed. It arises in Cash Transaction Limits and Evidence & Burden of Proof matters, on section Benami s.2(9)(A), section Benami s.2(10), section Benami s.2(26), section Benami s.24, section Benami s.26 of the Income Tax Act 1961, and was decided by Balesh Kumar, Member, and Rajesh Malhotra, Member. Before relying on it, read the source linked on this page and check whether it has since been distinguished, overruled or overtaken by an amendment to the Income Tax Act. In practice the steps that follow from it are these. If the same money was declared under PMGKY, produce the challan for the tax paid and the certificate for the bond and ask for the attachment to be worked out on the balance only. Reconcile the attached amount head by head — the order reduced the attachment to the remaining liquid balance plus the bond amount. Where the Adjudicating Authority has already released immovable property and confirmed only bank balances, argue the arithmetic rather than the character of the transaction. Keep in mind that the benamidar here was the trader; the attachment still ran against the appellant's own assets to the extent of the sum routed.
Searched for later treatment; none was found. That is not the same as a source affirming it. Decided in April 2026; no later decision applying, affirming, doubting or overruling it was found. The Appellate Tribunal's own site could not be searched from outside and its benami orders are not carried on the general case-law databases, so the absence of later treatment says nothing about the standing of the order. The holding that a pre-2016 arrangement of this kind is caught is not examined in this order and should be read against Union of India v Ganpati Dealcom, the 2022 judgment the Supreme Court recalled on 18 October 2024. No source could be cited for that finding. Checking whether an authority still stands matters as much as knowing what it held: a decision may be overruled on one point and survive on another, or the provision it interprets may have been amended since. Read the source and the editor's note on this page before relying on it in a reply to an Assessing Officer or in an appeal.
This is the Appellate Tribunal under SAFEMA at New Delhi, which hears appeals under s.46 of the Prohibition of Benami Property Transactions Act 1988. It is NOT the Income-tax Appellate Tribunal. The `itat` tier is used only because the library's vocabulary has no separate value for this Tribunal. The order could not be found on the Tribunal's own site at atfp.gov.in, whose orders are published as PDFs at unguessable addresses behind a search form that cannot be driven from outside; the text relied on here was read in a third party's reproduction of the Tribunal's order, with the site's own summary and commentary disregarded. The appeal number, the date and the paragraph numbering should be checked against the Tribunal's own copy before the case is cited. The reasoning on s.2(9)(A) and s.2(10) is attributed in the reproduction to paragraphs 5 and 6 together and the precise paragraph for each step could not be fixed. The order cites no earlier authority of its own. This library shows the verification state of every entry openly. This entry has not yet been read in full by a chartered accountant. The summary reflects the sources listed on this page. Read the source before you rely on it in a reply to an Assessing Officer or in an appeal before the Commissioner (Appeals) or the Income Tax Appellate Tribunal.
The appeal was partly allowed and the adjudication order dated 27 July 2018 modified so that the attachment stood at Rs. 2,52,500, being the remaining liquid balance of Rs. 1,27,500 plus the bond amount of Rs. 1,25,000 (para 8). The finding that the transaction was benami was not disturbed.
TaxSphere, “Harvinder Pal Miglani v Initiating Officer, ACIT (BPU)”, https://taxnotice.vittsphere.com/caselaw/case/harvinder-pal-miglani-v-initiating-officer-benami-cash-routing-pmgky-credit/ (validity last checked 2026-09-16)
The judgment itself is a government work and may be quoted freely. The summary, the validity note and the reasoning on this page are this library's own writing: quote them with attribution, and please do not present either as the words of the court — this page keeps the two apart and so should a quotation of it.
Every entry in this library links to where it was found, so you can check it yourself rather than take our word for it.
The benami attachment on my client's bank accounts rests on an investigation that never traced the people it names. Will the Tribunal simply release it?
The Initiating Officer has issued a s.24 notice and attached my accounts on the strength of a spreadsheet found in someone else's search. Will the High Court interfere now?
The transaction the Department calls benami was done in 2011. Can it use the 2016 definitions against me?
Jewellery found in my client's house during a search has been attached as benami. The alleged owner declared it under PMGKY. Does the attachment survive?
