APPELLATE TRIBUNAL UNDER SAFEMA AT NEW DELHI MP-PBPT-2182/HYD/2022 Stay FPA-PBPT-2280/HYD/2022 Sh. Rachamalla Dharma Raju … Appellant Versus The Initiating Officer, Hyderabad … Respondent Advocates / Authorized Representatives who appeared:

For the Appellant(s) : Counsel appeared For the Respondent(s) : Mr. Manmeet S. Arora, SPP Mr. Yash Batra, Advocate CORAM JUSTICE MUNISHWAR NATH BHANDARI : CHAIRMAN MR. V. ANANDARAJAN : MEMBER

ORDER

06.08.2025 This appeal has been preferred under Section 46 of the Prohibition of Benami Property Transactions Act, 1988 ( in short “the Act of 1988”) to challenge the order dated 18.02.2022 passed by the Adjudicating Authority confirming the Provisional Attachment Order (‘ PAO’) while answering the reference.

Brief facts of the case:

2. It is a case initiated on an information received from the DDIT(Inv.), Unit-1(2) Hyderabad that two persons have been apprehended by the police authorities with cash of Rs.2 Crore on 03.04.2019, at High-tech City, MMTS Railway Station within the jurisdiction of Madhapur Police Station. The statements under Section 131 of the Income-tax Act, 1961 of Shri Nirmmaluri Sri Hari and Shri A. Pandari said to be the employees of M/s Jayabheri Properties Pvt. Ltd., were recorded on 04.04.2019. It was categorically stated that they picked up the cash of Rs.2 Crore from the office of M/s Jayabheri Properties Pvt. Ltd. on the direction of Shri Rachamalla Dharma Raju, Accounts Manager of the Company, to hand over it to Shri Elamanchila Murali Krishna at Rajahmundry Railway Station, Andhra Pradesh. The two persons from whom the cash was recovered stated that the cash does not belong to them. Shri Dharma Raju Rachamalla assigned the work to them with the instruction to carry the cash and hand it over at Rajahmundry Railway Station to Shri Elamanchila Murali Krishna.

3. Subsequent to the aforesaid, a survey operation under Section 133A of the Income-tax Act, 1961 was carried out by the DDIV(Inv.), Hyderabad in the cases of 4 companies viz. M/s Jayabheri Properties Pvt. Ltd., Jayabheri Automobiles Pvt. Ltd., Jayabheri Entertainment Pvt. Ltd. and Jayabheri Properties &

Services Pvt. Ltd.. The statement of Shri Rama Murthy Reddy, Accounts Officer was recorded on 05.04.2019. The matter was then initiated under the Act of 1988 and accordingly show cause notice under Section 24(1) of the Act of 1988 was issued and thereupon an order was passed under Section 24(4)(b)(i) on 28.01.2021 followed by orders under Section 26(1) and 26(3) of the Act of 1988 on 24.11.2021 and 18.02.2022 respectively. The Adjudicating Authority confirmed the PAO and even answered the reference finding a case of benami transaction. Aggrieved by the order of the Adjudicating Authority, the appeal has been preferred by the appellant.

Arguments of the Counsel for the appellant:

4. Ld. Counsel for the appellant submitted that a case of benami transaction is not made out, yet not only an order for provisional attachment of the amount of Rs.2 Crores was passed but has been confirmed by the Adjudicating Authority. The Adjudicating Authority passed the order in ignorance of Section 24(3) of the Act of 1988 and therefore on the aforesaid ground itself, the impugned order deserves to be set-aside. An order for provisional attachment can be passed by the Initiating Officer having apprehension of alienation of the property during the period specified in the notice. In the instant case, there was no reason to apprehend transfer of the cash so as to attach it under Section 24(3) of the Act of 1988.

5. Ld. Counsel for the appellant while referring the facts of the case submitted that on a petition filed before the Addl. Metropolitan Magistrate, Cyderabad in Cr. No. 260/2019 for custody of cash of Rs.2 Crore to the Income Tax Department, the Ld. Magistrate gave a direction to the Police authorities to hand over the seized cash of Rs.2 Crore to the Income Tax Department. The cash was later on seized through requisition under Section 132