The court established that backdated entries and lack of genuine transactions undermine claims of legality in benami transactions, emphasizing the necessity for substantial evidence of commercial legitimacy.

ORDER

10.03.2025

The batch of appeals have been filed involving common legal issues and otherwise facts of different appeals are inter- mixed though the impugned orders dated 30.10.2018 and 31.10.2018 are on separate references sent by the Initiating Officer. The parties prayed for a common order in all the appeals. It is not only for the reason that facts are intermixed in the appeals but it involves common question of law. According to the respondent, even the modus operandi applied for benami transaction by the appellant is also common. The transaction in pursuance to which allegations have been made against the appellants for benami transaction is of the period of demonetization of the currency note of Rs. 500/- and Rs.1000/- by the Government of India. The common allegation against the appellants is for their involvement to get demonetized money deposited in the bank accounts of people having no means for the total value of more than Rs. 35 crores and accordingly the prayer of the counsel for the parties to pass a common order has been accepted.

It is a case where initially a notice was issued by the Initiating Officer under Section 24(1) of the Act of 1988 to Yogesh Baburao More of M/s Raj Enterprises, Prakashkumar Govindbhai Kashyap, Jitendrabhai Rameshbhai Patel, Jolly trading company, Shri Kalubhai Dashrathbhai Kureshi (Proprietor of M/s Aryan Corporation), Shri Dipak Shantaram Pavar (Proprietor of M/s Sukun Enterprises), Shri Dashrathbhai Dalichand Nagar (Proprietor of M/s Lascon Enterprises), Shri Mohammed Farhan Mohammad Ishmail Sheikh (Proprietor of M/s Metro Enterprises), Shri Saiyed Kashif Hadar Shabbir Hussain (Proprietor of M/s Krystal Enterprises) and Shri Mohammed Faruk Nasiruddin Kazi, Proprietor of M/s A.S Trading Co. showing them to be benamidars and was marked to bullion companies namely M/s Parker Bullion Pvt. Ltd, M/s Gayatri Jewellers, M/s Shreeji enterprises, M/s Patidar Bullion Pvt. Ltd., M/s M.S. Jewellers, Kundan Trading Company, M/s Shital Jewellers and M/s Shivam Jewellers showing them to be beneficial owner. The reply to notice was filed before the Initiating Officer who thereupon passed the attachment order under Section 24(4)(b)(i) of the Act of 1988 and send the references to the Adjudicating authority treating Sanjay Soni, Shrenik Shah and Paresh M. Joshi as beneficial owner and bullion companies, named above to be the abettors. The position of benamidars was maintained therein.

On the receipt of the reference, notices under section 26(1) of the Act of 1988 were issued by the Adjudicating Authority to the benamidars with a copy to the beneficial owners. The replies to the notices were filed by the parties and on the completion of the proceedings and arguments, the matter was reserved for pronouncement of orders. While the matter was pending for pronouncement, the Initiating Officer found additional evidence and after seeking approval of the Approving authority, filed an application under Section 26 (5) and 26 (6) of the Act of 1988 for transposing the above-named beneficial owners as abettors and the abettors as beneficial owners. To illustrate the above-stated transposition, the same is tabled as below: