Case Details: Deputy Commissioner of Income-tax (BPU) vs. Sara Company [2026] 184 taxmann.com 406 (SAFEMA-New Delhi)
Judiciary and Counsel Details
- Munishwar Nath Bhandari, Chairman & G. C. Mishra, Member
- Manmeet S. Arora, S.P.P, Camran Iqbal & Ms Khushi Gupta, Advs. for the Applicant.
- Ashwani Taneja, Ms Gunjan Chauhan, Siddhant Taneja, Advs. & Ashish Tandon, CA for the Respondent.
Facts of the Case
The Assessing Officer (AO) provisionally attached the property of the assessee-benamidar. AO contended that the assessee was carrying on business from the premises of the alleged beneficial owner without any lease agreement or proof of rent payment and that its accounts were maintained at the said premises. Accordingly, the AO provisionally attached the property.
The Adjudicating Authority, after examining the material on record, found that the essential ingredients of section 2(9)(A) were not satisfied, as there was no evidence that the alleged beneficial owner provided consideration for any property for his benefit. Accordingly, the Adjudicating Authority refused to confirm the provisional attachment. Aggrieved AO filed the instant appeal before the Tribunal.
SAFEMA Held
The Tribunal held that the perusal of the record did not disclose any allegation satisfying the ingredients of a benami transaction. It was not a case where the alleged beneficial owner had transferred the consideration for a property to be transferred or to be held in the name of the benamidar for his future benefit. The perusal of the record would show it to be nothing but a business arrangement between the two parties for the smooth supply of the goods. If the two entities used the common premise for smooth business, it would not constitute a benami transaction unless an allegation of passing the consideration was made.
In the instant case, the AO was unable to make out a case of a benami transaction. Even if it were assumed that there was no rent note or the proof of payment of rent for the use of the premises, this ipso facto would not make out a case of a benami transaction. Allegation of payment of consideration was missing in this case; the AO made no such allegation. Thus, the confirmation of the provisional attachment was rightly denied.
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