Benami properties of Rs 43 bn attached; Jaipur and Mumbai top the list

The income-tax (I-T) department has attached over 1,500 unaccounted properties worth Rs 43 billion across the country within one and a half years of the introduction of the revised benami legislation. Jaipur and Mumbai top the list, with attachments of 200 properties each.

Patna has seen the least number of attachments at 30, followed by Lucknow at 50, while in Kolkata, Chandigarh, and Hyderabad, 144, 110, and 100 properties got attached, respectively, says a finance ministry official. “The I-T department has worked swiftly in identifying benami transactions since the enactment of the revised legislation. Over 1,500 properties have been attached so far. Many are on the radar. Search and surveys are on involving gold dealers, bankers, hawala operators, senior government officials, and politicians, etc,” said another official.

In one case in Jabalpur, a driver was found to be the benamidar. He owned land worth Rs 77 million. The beneficial owner is the employer of the driver, a Madhya Pradesh-based listed company.

In Mumbai, a professional was found to be holding several immovable properties in the name of shell companies which exist only on paper. 

In another case in Sanganer, Rajasthan, a jeweller was found to be the beneficial owner of nine immovable properties in the name of his former employee, a man of no means. Certain properties purchased through shell companies have also been attached.

The large volume of cases has prompted the department to fast-track setting up of a dedicated adjudicating authority under the Benami Property Transactions Act for swifter passing of orders. 
 

Currently, benami cases are being adjudicated by an authority set up under the Prevention of Money Laundering Act (PMLA). An order needs to be passed within one year of attachment of property, else it lapses.

The PMLA adjudicating authority has upheld the department’s 100 cases so far. This means these properties can now be confiscated.The department has set up a search panel for putting in place a benami adjudicating authority. “We have begun the process to put in place a dedicated benami adjudication authority. The large volume of cases requires swifter hearing and adjudication, which the PMLA is unable to handle as it is short-staffed for the volumes that are flowing in. The law provides for a benami authority,” said a government official.

The benami legislation that existed since 1988 was reworked and made more stringent by the current government from November 1, 2016.The department has 24 dedicated benami prohibition units across the country under the supervision of principal directors of investigation in the I-T department to enable speedy action and follow-up.

This is especially in cases where criminality has been detected.

The Act enables the violators to be prosecuted with a rigorous imprisonment of anywhere between one and seven years and a penalty of up to 25 per cent of the fair market value of the property.

Earlier this month, the government had announced a reward scheme for whistle-blowers of benami transactions, under which an individual can get a reward of up to Rs 10 million for providing information to the tax authorities.

Benami transactions essentially mean black money is invested in properties in the names of others, even though the benefits are enjoyed by the investor concealing his/her ownership in the tax returns.