Dictated by: Rajesh Malhotra

The present appeal u/s 46 (2) of the Prohibition of Benami Property Transactions Act, 1988, is filed by the appellant against the order u/s 26(3) dated 27.07.2018 passed by the Adjudicating Authority in Reference No. R-91/2017, whereby account of the appellant in Axis Bank, Karkardooma, Delhi,-92 vide account No. 913010031666668 was confirmed for attachment to the extent of Rs. 7,50,000/-, whereas the immovable properties in lieu of said amount were released.

2. As per the allegations, Deputy Director of Income Tax (Inv.)-II/ Ghaziabad, on 18.01.2017 informed the O/o the Initiating Officer, Benami Prohibition Unit, Kanpur that A/c No. 05190100000698 maintained with J&K Bank, Ghaziabad, pertaining to M/s. Shyama Trading Company, Prop. Shri Ghanshyam Patel had been used for deposit of the de-monetized currency to the extent of Rs.30,00,000/-, which was subsequently transferred to five other accounts, including the account of the present appellant.

Shri Ghanshyam Patel in his statement recorded u/s 134(4) of the Income Tax Act, 1961 during the course of search on 18.01.2017 informed that the transactions in the said bank account of M/s. Shyama Trading Company have not been made by him, but it is done by Shri Rahul Choudhary, who obtained pre-signed cheques of Shri Ghanshyam Patel. He also stated that the deposits made in the account of M/s. Shyama Trading Company after 01.11.2016 was not belonging to him.

In view of the facts & material available in the possession of the Initiating Officer, he had reason to believe that Shri Ghanshyam Patel was a benamidar within the meaning of Section 2(10) of the PBPT Act, in whose name benami transactions were made through the Bank account of M/s. Shyama Trading Company and thereafter the amount was transferred to the different beneficial owners. Out of the said amount, sum of Rs. 7,50,000/- was transferred to the account of Sh. Sandeep Miglani (herein appellant) and the same is benami property as per Section 2(8) of the PBPT Act.

Accordingly, notice dated 18.05.2017 u/s 24(1) of the PBPT Act was issued by Initiating Officer to Shri Ghanshyam Patel and copy to the beneficial owner, Sh. Sandeep Miglani. On 07.06.2017, Sh. Sandeep Miglani filed reply and the statement of Shri Sandeep Miglani and Shri Ghanshyam Patel were recorded by Initiating Officer on 02.08.2017.

The reply filed by Sh. Sandeep Miglani is as under : -

a) The amount so received from M/s Shyama Trading Company (Proprietor Shri Ghanshyam Patel) amounting to Rs. 7,50,000/-has been declared under Pradhan Mantri Garib Kalyan Yojna, 2016, during the course of search conducted by the Income Tax Department, Ghaziabad.

b) Sh. Sandeep Miglani has surrendered amount of Rs. 7,50,000/- appeared in bank account number 913010031666668 at Axis Bank, Karkardooma, Delhi-92 which is transferred from the bank account No. 0519010100000698 at J&K Bank, Ghaziabad, under section 199C(1) for Pradhan Mantri Garib Kalyan Yojna, 2016 on 24.03.2017 as per clarification on taxation and investment regime for Pradhan Mantri Garib Kalyan Yojna, 2016 vide Circular number 2 of 2017 dated 18.01.2017 and paid tax, surcharge and penalty as per the scheme and made a declaration in Form-I on 08.03.2017 as per provisions of section 199C of the Finance Act, 2016.

It is pertinent to mention here that no provisional attachment had been made by the Initiating Officer u/s 24(3) of the PBPT Act, 1988. After issue of notice u/s 24(1), enquiries have been made and evidence was gathered by the Initiating Officer. After taking into account all the relevant materials, Initiating Officer concluded that it is a fit case for referring to the Adjudicating Authority for adjudication of the benami property. Accordingly, Initiating Officer passed order for provisional attachment of the bank balance, investments, movable and immovable property of the beneficial owner, Sh. Sandeep Miglani to the extent of Rs. 7,50,000/-, till the passing of order by the Adjud