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2025 (4) TMI 641 - AT - Benami PropertyBenami Property Transaction - sum of Rs. 87, 15, 472/- was found in cash with the appellant - appellant gave explanation for possession of the amount while his statement was recorded at the first instance on 12.04.2019 but he had however changed the statement subsequently and thereby huge variation remain in the statement made by the appellant. HELD THAT - Appellant failed to give explanation for possession of the currency note of Rs. 87, 15, 472/-. He could not produce any document to show exchange of torn/soiled notes from the bank and even failed to justify excuse of imposition of Code of Conduct. If one was in a position to bring the money for exchange during the period of Code of Conduct why they would not be in the position to collect the money immediately thereupon rather to keep the money with the appellant for days together. Thus the excuse taken by the appellant for imposition of Code of Conduct to justify the retention of amount with him cannot be accepted. The further excuse to justify the possession of the notes in reference to his business of exchange of torn/soiled currency could not be proved by the appellant. He could not produce any material to show exchange of torn/soiled currency notes from the bank despite the Circular issued by the Reserve Bank of India for the aforesaid and the limit of the amount for exchange of notes. Statements of appellant were inconsistent. He changed his version from time to time. Thus the statements are not reliable. At the first instance appellant had given the name of four persons. The money said to be belonging to them and accordingly summons was issued to four persons named by the appellant but only two persons responded to the summons but they denied for giving currency notes to appellant for exchange. The appellant then changed his statement to indicate few other names and thereupon further statement has not only changed the name of the persons but also added the name of many persons said to have given currency notes for exchange. Their affidavits were produced but as an afterthought otherwise the appellant should have given names of those persons at the first instance. This also demolishes the case of the appellant. Thus we are unable to accept the arguments of the appellant that the money found with the appellant was given to him by many persons for exchange and otherwise Rs. 45, 68, 687/- belongs to his father who was also involved in the same business. He did not disclose aforesaid that in his first statement and even failed to explain the reason for non- disclosure and change in the statement to state that Rs. 45, 68, 687/- was belonging to his father in the same business. The contradiction and variations in the statement has been dealt by the Adjudicating Authority and finding it to be unreliable the order of confirmation was passed. We do not find any error in the finding recorded by the Adjudicating Authority. Appeal dismissed.
ISSUES PRESENTED and CONSIDERED
The core legal issues considered in this judgment include:
ISSUE-WISE DETAILED ANALYSIS 1. Possession of Rs. 87,15,472/- as a 'benami transaction' Relevant legal framework and precedents: The Prohibition of Benami Property Transaction Act, 1988, prohibits transactions where property is held by one person for the benefit of another, known as a 'benami transaction.' The Act requires the identification of the beneficial owner of the property. Court's interpretation and reasoning: The Tribunal considered the appellant's inability to provide a consistent and credible explanation for the cash. The appellant's changing statements and lack of documentation led to the conclusion that the transaction was 'benami,' with the beneficial owner remaining unknown. Key evidence and findings: The appellant initially named four individuals as the source of the cash, but they denied any involvement. The appellant later changed his statement, attributing the cash to his father and other individuals, but failed to provide supporting evidence. Application of law to facts: The Tribunal applied the provisions of the Act to determine that the appellant's possession of the cash was not adequately explained, thus constituting a 'benami transaction.' Treatment of competing arguments: The appellant argued that the cash was related to his business of exchanging soiled/torn currency notes. However, the Tribunal found that he failed to provide documentary evidence or adhere to RBI guidelines, undermining his claims. Conclusions: The Tribunal concluded that the appellant's possession of the cash was a 'benami transaction,' as the beneficial owner could not be identified, and the appellant's explanations were inconsistent and unsupported by evidence. 2. Credibility of the appellant's explanation and evidence Relevant legal framework and precedents: The burden of proof lies on the appellant to provide a credible explanation and evidence for the source of the cash, as per the principles of the Income Tax Act and related regulations. Court's interpretation and reasoning: The Tribunal noted the appellant's failure to maintain regular books of accounts, provide bank statements, or produce receipts/bills to substantiate his claims. The inconsistent statements further eroded his credibility. Key evidence and findings: The appellant's initial and subsequent statements were contradictory. He failed to provide evidence of bank transactions or documentary proof of the alleged exchanges of soiled/torn currency notes. Application of law to facts: The Tribunal found that the appellant did not meet the burden of proof required to substantiate his claims about the source of the cash. Treatment of competing arguments: The appellant's argument that the cash was related to his business was dismissed due to the lack of documentary evidence and adherence to RBI guidelines. Conclusions: The Tribunal concluded that the appellant's explanations were not credible, and he failed to provide sufficient evidence for the source of the cash. 3. Adherence to RBI guidelines for exchanging soiled/torn currency notes Relevant legal framework and precedents: The Reserve Bank of India's guidelines outline the procedures for exchanging soiled/torn currency notes, including documentation and bank transactions. Court's interpretation and reasoning: The Tribunal found that the appellant did not follow the prescribed procedures, as he failed to provide evidence of bank transactions or adherence to the RBI's guidelines. Key evidence and findings: The appellant did not produce any bank statements or documentary evidence to show that the soiled/torn currency notes were exchanged according to RBI guidelines. Application of law to facts: The Tribunal applied the RBI guidelines to assess the appellant's claims and found them lacking in adherence to the prescribed procedures. Treatment of competing arguments: The appellant's argument about the business of exchanging soiled/torn notes was not supported by evidence of compliance with RBI guidelines. Conclusions: The Tribunal concluded that the appellant did not adhere to the RBI guidelines, further undermining his claims about the source of the cash. SIGNIFICANT HOLDINGS The Tribunal held that the appellant failed to provide a credible explanation and sufficient evidence for the source of the cash found in his possession. The possession of Rs. 87,15,472/- was deemed a 'benami transaction' under the Prohibition of Benami Property Transaction Act, 1988, as the beneficial owner remained unknown. The appellant's inconsistent statements and lack of adherence to RBI guidelines further weakened his case. The appeal was dismissed, upholding the Adjudicating Authority's order.
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