Benami Property Case: Tribunal Upholds ₹52 Cr Order on Buldhana Co-op Society
In a key ruling under the Prohibition of Benami Property Transactions Act, the Appellate Tribunal upheld the provisional attachment of assets worth ₹52 crore belonging to the Buldhana Urban Co-operative Credit Society. The verdict sharpens the enforcement stance on benami assets and sends a strong message to financial entities across India.
What Was the Case About?
- The Initiating Officer (IO) under the Income Tax Department had provisionally attached these assets under Section 24(3) of the Benami Act.
- Now, the Appellate Tribunal has upheld the order, solidifying the ₹52 crore attachment.
Understanding Benami Transactions – A Quick Refresher
- The real beneficiary is not the one in whose name the asset is held.
- Funds used do not belong to the person in whose name the asset is registered.
Relevant Sections:
- Section 2(9) defines benami transactions
- Section 24 deals with attachment procedures
- Section 26 & 46 relate to adjudication and appeals
Key Legal Highlights in This Case
✅ Evidence-Based Confirmation: The society failed to explain the source of funds and beneficiary ownership.
✅ Judgment Impact: The tribunal emphasized that even registered cooperative bodies are not exempt if they act as benamidars.
Why This Verdict Matters for Indian Businesses
- Stricter Due Diligence: Auditors and compliance officers need to flag unusual holdings lacking beneficiary disclosures.
- Enforcement Expansion: This ruling shows the reach of benami laws beyond real estate, extending into banking and credit entities.
Expert View: CA Rajeev Agarwal
“This case is a wake-up call. Institutions must go beyond statutory filings and proactively document ownership structures and fund origins to avoid such attachments.”
Compliance Tips for Businesses and Societies
Here’s what financial entities should do to stay compliant:
✔️ Keep KYC records updated for all members/investors
✔️ Respond to income tax notices with proper disclosures
✔️ Train staff to identify suspicious layering of ownership or funds
Related Reading on Efiletax
- Understanding the Prohibition of Benami Property Transactions Act
- How to Respond to Benami Transaction Notices from IT Dept
External Source
- Official Notification: https://incometaxindia.gov.in
- Tribunal Update: Available via recent ITAT bench ruling
Summary
The Appellate Tribunal upheld ₹52 crore attachment against Buldhana Co-op Society under the Benami Act. The case highlights the importance of ownership transparency and fund traceability, even for cooperative credit bodies. Businesses must ensure compliance to avoid similar enforcement actions under Sections 24 and 26 of the Act.
FAQ – Benami Law & Business Impact
Q1: Can a registered society be accused of benami transactions?
Yes. As this case shows, legal status doesn’t shield you from benami scrutiny if actual ownership is hidden.
Q2: What records can protect you from such actions?
Full beneficiary disclosures, fund source trails, and board resolutions can be key defense documents.