I-T Dept warns against `Benami’ deals

The Income Tax Department has warned people to "keep away" from benami transactions, cautioning that violations under the newly-enacted law would invite criminal prosecution and rigorous imprisonment up to seven years.

In advertisements titled "Keep Away from Benami Transactions'', published in leading national dailies, the department has put the public on alert. It described black money as a "crime against humanity" and urged "conscientious citizens to help the government in eradicating it".

"Benamidar (in whose name benami proper is standing), beneficiary (who actually paid consideration) and persons who abet and induce benami transactions are prosecutable and may face rigorous imprisonment up to 7 years besides being liable to pay fine up to 25 per cent of fair market value of benami property," the I-T advertisement said.

The Income Tax Department has attached properties, including plots of land, flats, shops, jewellery, vehicles, deposits in bank accounts, fixed deposits etc, valued at more than Rs3,500 crore, including immovable property worth more than Rs2,900 crore, in intensive operations after the Act came into force on 1 November 2016.

Provisional attachment has been made in more than 900 cases of properties in stepped-up action under the Prohibition of Benami Property Transactions Act.

In five cases, the provisional attachments of Benami properties, amounting to more than Rs150 crore 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 Rs110 crore, using the names of certain persons of no means as benamidars. This was corroborated by 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, associates etc to be ultimately remitted to their bank accounts. The total amount attempted to be remitted to the beneficial owners was about Rs. 39 crore.

In yet another case, a cash amount of Rs1.11 crore 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.

Earlier, the Income Tax Department had stepped-up actions under the Prohibition of Benami Property Transactions Act. The Act provides for provisional attachment and subsequent confiscation of benami properties, whether movable or 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 fine 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 respect of Benami properties.