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TMI Blog2017 (10) TMI 1653X X X X Extracts X X X X X X X X Extracts X X X X ..... short IO), also under the 1988 Act, respectively under Sections 24(1) and 24(4) of the 1988 Act. 3. The notice under Section 24(1) of the 1988 Act, inter alia, reads as follows: "Material on record, marked as annexure-1, reveal that the entities which provided the consideration are either fictitious or non traceable. It is evident from the above facts and circumstances that the consideration related to the transactions of the property in concern is provided by another person and it is held for the future benefit of another person whose identity is not known. The above conditions satisfy the definition of the Benami transaction u/s 2(9) of the PBPI Act 1988. Thus I have reason to believe and I am satisfied that the property in the form ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d in AIR 1955 SC Page 74 at Paragraph 7 thereof, Mr. Kar argues that the question of fictitious entities behind the fund alleged to have been utilised by the Company for the purchase of the property in issue would not be attracted in law since, such fictitious entities are not referable to the shareholders of the Company, who carry no fiduciary interest connected to the property of the Company. The law as elucidated in AIR 1955 SC Page 74 (supra), inter alia, permits the share holders to only participate in the profits of the Company in the form of dividends without being required to exercise any participatory involvement in its immovable assets. 8. Therefore, Mr. Kar submits that the fundamentals of the proceeding initiated by the IO unde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ned under Sections 2(8) and 2(9) of the 1988 Act (as amended). Both the statutory provisions are set forth below for the sake of this discussion. "2(8): "benami property" means any property which is the subject-matter of a benami transaction and also includes the proceeds from such property" "9(A) a transaction or an arrangement- (a) where a property is transferred to, or is held by, a person, and the consideration for such property has been provided, or paid by, another person; and (b) the property is held for the immediate or future benefit, direct or indirect, of the person who has provided the consideration, except when the property is held by- (i) a Kqaarta, or a member of a Hindu undivided family, as the case may be, and t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... atisfied that the IO has applied his mind to the facts painstakingly collected and the issue now requires solid factual adjudication at the level of the AA. 16. Fourth, this Court is also satisfied that the preliminary legal objection taken by Mr. Kar is not persuasive for a Writ court to interdict a proceeding under the 1988 Act qua a private limited company where the dominant shareholders are de facto the Company itself and it has become necessary to identify the structure and role of the entities in respect of a transaction which requires exploration at the appropriate factual level on its alleged benami colour. 17. Fifth, the distance claimed by Mr. Kar of the shareholders from any interest in the immovable property of the Company on ..... X X X X Extracts X X X X X X X X Extracts X X X X
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