Benami s.2(9)

Benami s.2(9) — the law in short

What the courts have decided on section Benami s.2(9), in one screen. Read this first; open an entry when you need the facts, the reasoning and the source.

• Mangathai Ammal v Rajeswari Supreme CourtHelps taxpayerNo later treatment found
  The officer says my wife's property is mine because the money came from my account. Is that enough to make it benami?
  No, not by itself. The burden of proving that a purchase is benami rests throughout on the person asserting it, and the source of the purchase money has never been the sole consideration. What decides the question is the intention of the person who put up the money, drawn from the relationship of the parties, the motive for the arrangement and their conduct afterwards.
• P. Leelavathi v V. Shankarnarayana Rao Supreme CourtHelps taxpayer
  My father paid part of the price of a flat bought in my name. Does that make it his and not mine?
  No. Financial assistance from a parent, standing alone, does not make the purchase benami. The person asserting the benami must prove it, and the Court tests the claim against six circumstances of which the source of the money is only the first. Without evidence that the person who found the money intended to buy for himself or the family, the transaction stands as it appears.
• Alishan Complex P Ltd v Initiating Officer High CourtHelps taxpayerJudgment not reachable
  The benami attachment rests on a retracted statement and they refused cross-examination. Is that evidence?
  No. An untested and retracted statement, standing alone, is no evidence at all on which a benami finding can rest. Where such a statement is the only material against a party, the power in s.19(1)(b) of the Prohibition of Benami Property Transactions Act to summon and examine the witness stops being discretionary and becomes a duty, and income-tax assessment findings on the source and genuineness of the funds are relevant material the Initiating Officer is bound to consider.
• 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".
• Adjudicating Authority v Anuttam Academic Institutions High CourtHelps departmentNo later treatment found
  The adjudication order is dated inside the one-year period in s.26(7), but the certified copy reached me weeks after it expired. Is the order time-barred?
  No. The Madras High Court held that the one-year period in s.26(7) governs when the Adjudicating Authority must make its order, and that the order is made on the date it is passed and entered in the Authority's registers, not on the date a certified copy is prepared or despatched. Delay in preparing and communicating certified copies is a procedural lapse which does not postpone the date of making the order.
• Niharika Jain v Union of India High CourtCuts both waysUnder appeal
  The property was bought years before November 2016 and the benami notice came after. Can the amended Act reach back?
  This is the writ batch in which the Rajasthan High Court framed that question directly - whether the Benami Amendment Act 2016 applies retrospectively - after a search under s.132 threw up show-cause notices under s.24(1) and provisional attachments under s.24(3) for pre-amendment land purchases. The judgment runs to 160 pages and the concluding part could not be reached in the copy available; what can be established from the document is the framing of the issue at para 19 and the rival cases on either side.
• Aparna Sharma v Sidhartha Sharma High CourtCuts both waysNo later treatment found
  The flat is in my sister's name but I paid the builder. Can I still sue to be declared the real owner?
  Not on those facts. Once the 2016 amendment is in force, a claim that the apparent owner holds for you is barred unless it falls within one of the four exceptions in s.2(9)(A)(b)(i) to (iv). The sibling exception in (iv) requires that you be shown as a joint owner in some document; a general power of attorney authorising you to get the property transferred is not such a document, and the counter-claim was rejected.
• Shrenik Shah v Initiating Officer, DCIT BPU, Ahmedabad ITATHelps taxpayerNo later treatment found
  The Adjudicating Authority has dropped my client as beneficial owner and recast him as an abettor, but kept the attachment on his own property. Can it?
  No. The Appellate Tribunal held that the Act allows attachment of benami property in the hands of the benamidar or the beneficial owner, and does not allow property to be attached merely because it is in the hands of an abettor without a finding that the property itself is benami. Once the Adjudicating Authority accepted that the appellant was an abettor and that someone else was the beneficial owner, the continued attachment of his personal assets could not stand and the appeal was allowed.

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.