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Cash deposits of Rs 15.39 crore made in a Delhi bank post demonetisation have been held as 'benami' property by a special court even as the depositor and the beneficial owner of the stash are "untraceable".
The Prime Minister Narendra Modi-led government had brought into force the new Benami Transactions (Prohibition) Amendment Act, 2016 from November 1 last year, as part of its multi-pronged strategy to curb illicit wealth.
The case pertains to one Ramesh Chand Sharma, reportedly a resident of Gali Laltain in Naya Bazar area of old Delhi.
The Income Tax Department, as part of its drive against black funds post the note ban, had conducted a survey at the Kotak Mahindra Bank branch on K G Marg in December last year and found that Sharma, post demonetisation, deposited Rs 15,93,39,136 cash in old notes of Rs 500 and Rs 100 in the account of three firms, suspected to be fake.
The taxman found that immediately after the cash deposits were made, "demand drafts were issued to a group of non- descript individuals with a view to alienate the cash." The department froze these DDs and attached these funds calling them 'benami'.
The department subsequently sent the order for confirmation to the Adjudicating Authority of the Act, as per the legal provision of this stringent law.
The Authority, sometime back, confirmed the I-T order, making it one of the first five cases of adjudication under this new law in the country till now.
"The material gathered through the survey, search, consequent enquiry clearly leaves no room to doubt that the said amount aggregating to Rs 15.93 crore (approx) in accounts of...is a benami property.The said Ramesh Chand Sharma is the benamidar and the identity of the beneficial owner is not know," an order by the division bench of the Authority, Mukesh Kumar (Chairperson) and Tushar V Shah (Member-Law), said.
The order, accessed by PTI, said Sharma too has gone "untraceable" since the action was launched against him by the I-T Department.
It added that Sharma "consistently remained absent in the proceedings before the investigating officer and also before the Authority inspite of several services (summonses) in accordance with law."
The tax departments' charge sheet filed in the case states field enquiries revealed that Sharma was "holding this benami property (cash deposits) as a benamidar for some persons who are the beneficial owners of the properties and whose identity is not traceable or is fictitious." The department also found that Sharma has once filed an Income Tax Return (ITR) declaring income of Rs 3 lakh for the assessment year 2006-07.
Sharma, as per the I-T charge sheet, never responded to its summonses and his address given in the KYC (know your customer) documents of the bank "resulted in the revelation that no such person ever resided" in the given location of old Delhi.
"Enquiry by the Inspector revealed that nothing was known about such person in the neighbourhood also," it said.
"The only possible reason for giving a wrong address could be that there was a pre-planned intention on the part of the account holder (Sharma) to engage in such activities after which he did not want any trace of his to be left behind.
Apparently, his account was utilised by persons who were either not traceable or fictitious to bring their own unaccounted money in the form of demonetisation currency notes back into the banking channel," the I-T charge sheet, also called prosecution complaint, said.
It added that no one claimed the money even after the taxman attached it as it was black and the person(s) concerned "decided to remain quiet and forego the amount rather than to reveal themselves to the law."
"It is apparent that Sharma, a man of meagre means could not have the resources to raise such a huge amount," it said.
Such an act, it had said, would attract criminal charges under the Benami Act, applicable on both movable and immovable properties. The I-T department is the nodal department to enforce the Benami Act in the country.
The tax department, in a data updated till last month, had said that assets worth Rs 1,833 crore have been attached by it under this stringent new law, for which it issued over 517 notices and made 541 attachments. The law provides for a maximum punishment of seven years in jail and a fine.