FINAL ORDER

05.11.2024 FPA-PBPT-2496/MUM/2023 By this appeal under Section 46(1) of the Prohibition of Benami Property Transactions Act, 1988 (in short ‘the Act of 1988), a challenge has been made to the order dated 01.12.2022 passed by the Adjudicating Authority under Section 26 (3) of the Act of 1988. By the impugned order, the attachment so as the reference have not been confirmed and, therefore, the appeal has been filed by the DCIT, Mumbai.

2. The learned counsel for the appellant submitted that SunetraAjitPawar and AjitPawar floated a company M/s Jay Agrotech Pvt. Ltd. (now M/s Sparking Soil Pvt. Ltd.) on 01.04.2004 with share capital of Rs. 1 lakh, having 10,000 shares; holding 50% shareholding each.

3. It was submitted that on 30.03.2006, 75,000 shares of BD/R-1 were allotted to 39 persons at Rs. 100 each, including Rs. 90 share premium. The said shares were subsequently transferred on 29.09.2009 to other fire power concerns namely M/s Non-Con Energies India Pvt. Ltd. and M/s Fire Power Marketing India Pvt. Ltd. at meagre face value (i.e. Rs. 10) in FY 2009-10. Making the effective transfer price on the subsequent shareholders at only Rs. 7.5 lakhs; thereby causing a loss of Rs. 67.5 lakhs to the previous shareholder(s).

4. Shri AjitPawar and Smt. SunetraPawar resigned as director(s) of the company on 01.07.2005 and 18.07.2008, respectively and eventually on 29.09.2009, entire shareholding of M/s Jay Agrotech Pvt. Ltd./ BD stood transferred to M/s Shivraj Agro Estate Pvt. Ltd.

and to M/s Sujay Agro Estate Pvt. Ltd. respectively.

5. On financial profiling, it emanated that it did not have any business activity and director Ajay PandurangKangralkarhas got executed sale deeds with respect to 20:50 Hectra land in Village MaujeJalauchi, Taluka Baramati as AR of the BD on 05.03.2015 for consideration of Rs. 28.50 crores.

6. During the course of search, directors Rajendra S Ghadge, Ajay PandurangKangalkar were also covered and during the statement they admitted to being mere dummy directors. The list of director(s) of BD is excerpted hereunder:

7. On further inquiries it emanated that present directors Ajay PandurangKangralkar and Rajendra S Ghadkeare family members/relatives of BO(s) i.e. AjitPawar and family. The said directors were closely associated with each other and are mere dummy directors, and unaware of the business carried out by BD. They merely signed papers and document(s) brought to them, while the BO(s) AjitPawar and SunetraPawar held effective control of the same.

8. It was submitted that upon analyzing the shareholder(s) of BD, it emanated that the same is held by four entities namely M/s Fire Power Marketing India Pvt. Ltd. (44%), M/s Non Con Energies India Pvt. Ltd. (44%), Shivraj Agro Estate Pvt. Ltd. (6%), and M/s Sujay Agro Estate Pvt. Ltd. (6%). It further surfaced that only two natural shareholders i.e. Mohan Patil and Neeta Patil (brother-in-law and sister of BO AjitPawar) control the said shareholding entities. They further admitted during search dated 07.10.2021 that they are neither aware of the shareholding or the activities of the said entities wherein they have immediate shareholding. It is further relevant to point out that they have not disclosed their shareholding in the entities in their ITR(s).

9. It was further submitted that upon analyzing ITR(s) AjitPawar and SunetraPawar were initial shareholders of BD, as ultimate natural persons and were the directors of BD in earlier years. However, they subsequently attempted to distance themselves from it on paper in terms of holding directorship and shareholding of BD; while exercising control over it and managing its affair(s) through web of entities.

10. Based