The burden of proof in benami transaction cases lies with the accusation, and failure to establish connection between beneficial ownership and shell companies results in dismissal of provisional attachment orders.

ORDER

12.01.2026

The batch of the appeals have been preferred by the Assistant Commissioner of Income-tax (Benami Transaction) Unit 2, Mumbai to challenge four separate orders passed by the Adjudicating Authority on 18.07.2022 on four different references. The Adjudicating Authority did not confirm the Provisional Attachment Order (‘PAO’) of the properties while answering the references. Aggrieved by the orders passed separately on 18.07.2022, these appeals have been preferred by the Department raising several factual and legal issues. The reason to deny confirmation of the provisional attachment order of the properties is common. Thus, a common order is passed in four appeals.

2. In the case of M/s Gainful Multitrade Pvt. Ltd., Shri Balveer Singh Choudhary was shown to be beneficial owner while appellant M/s Gainful Multitrade Private Limited as Benamidar. In the appeal against M/s Samvrudhi Multitrade Pvt. Ltd., the Beneficial Owner is Shri Nawal Kishor Joshi and M/s Samvrudhi Multitrade Pvt. Ltd. is alleged to be Benamidar. In the appeal against M/s Roopam Multitrade Private Limited , the Beneficial Owner is Shri Pawan Kumar Varma while M/s Roopam Multitrade Private Limited is alleged to be benamidar. In the appeal against M/s Gladiolus Property & Investments Pvt. Ltd., the Beneficial Owner is again Shri Balveer Singh Choudhary while the respondent company - M/s Gladiolus Property & Investments Pvt. Ltd. is alleged to be the Benamidar.

3. The reference of different Benamidar and Beneficial Owners in different appeals have been given, though the allegations for benami transactions in all the appeals are common. It is a case where money was used to obtain the shares of the respondent companies on premium. It is alleged that the Shell Companies provided accommodation entries where the money was infused by the beneficial owner. It was through Share Application Money to obtain shares of the respondent companies and accordingly a case of benami transaction was taken up. It is with the further statement that after receipt of the application money for allotment of shares, the benamidar companies utilized it for further investment in the shares of other companies and other financial investments and accordingly provisional attachment of those investments were made.

4. For the convenience and clarity, we would be referring the facts involved in the case of the respondent, M/s Gladiolus Property and Investments Private Limited (in short “GPIPL”). It is for the reason that modus operandi of benami transaction is common in all the appeals. Therefore, instead of repeating the facts of each case separately, the reference of the facts in the case of GPIPL would be given to have clarity on the issues. It is with the consent of the Ld. Counsel for both the parties.

Arguments of the Ld. Counsel for the appellant:

5. Ld. Counsel for the appellant submitted that despite a benami transaction in the hands of the beneficial owner and the benamidar, the Adjudicating Authority did not confirm the PAO mainly on the ground that infusion of money by the beneficial owner in the shell Companies for allotment of shares of the respondent companies could not be proved. The findings aforesaid has been recorded in ignorance of the material on record sufficient to prove a case of benami transaction. It was a