Benami s.2(10)

Benami s.2(10) — the law in short

What the courts have decided on section Benami s.2(10), in one screen. Read this first; open an entry when you need the facts, the reasoning and the source.

• Meera Pandey v UOI High CourtHelps taxpayerNo later treatment found
  A benami show-cause and attachment have come on the strength of one contractor's statement. Can I go to the High Court now?
  Yes. The Allahabad High Court quashed both the s.24(1) notice and the provisional attachment where the Initiating Officer's whole case was a contractor's statement with no supporting material. It held that s.24(1) requires two things — material in the officer's possession, and material sufficient to cause a reason to believe — and that "reason to believe" is a stronger standard than "is satisfied" or "reason to suspect".
• Harvinder Pal Miglani v Initiating Officer, ACIT (BPU) ITATCuts both waysNo later treatment found
  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.
• Ranjana Roy v Initiating Officer, Kolkata ITATHelps taxpayerNo later treatment found
  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?
  It did not. The Appellate Tribunal had the jewellery verified against the jeweller's own hallmarking and sales records, and only four of sixty-six packets could be traced to the showroom the Department relied on. The person said to be the beneficial owner had already declared the jewellery bought from that showroom under the Pradhan Mantri Garib Kalyan Yojana 2016 and the Department had accepted the declaration. On that material the Tribunal held the jewellery was not held as benami, set aside the adjudication order and allowed the appeal.
• Ambica Bullion v DCIT (BPU-1), Mumbai ITATCuts both waysNo later treatment found
  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?
  Not necessarily. Where both sides have left holes — the Initiating Officer having failed to trace the person said to control the benamidar companies or to establish how they were incorporated and operated, and the appellant having failed to produce a stock register or the underlying sale invoices — the Appellate Tribunal remanded the matter for re-investigation instead of deciding it, directed that it be completed preferably within six months, ordered status quo and directed the banks to convert the attached balances into fixed deposits in the meantime.

Listed strongest first: Supreme Court, then High Court, then Tribunal, then CBDT. Nothing here has yet been read in full by a chartered accountant — open an entry to see where it came from.