1. NEW BENAMI LAW – CRITICAL ISSUES
CA RAJEEV SOGANI
CIRC
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2. “Benami Transaction” [Section 2(9)(A)]
The property is held for the immediate or future benefit, direct or indirect, of the person who has provided the consideration.
Property transferred to or held by a person; and
Consideration or such property has been provided or paid by another person.
AND
TRANSACTION/ARRANGEMENT
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CIRC
CA RAJEEV SOGANI

3. “Benami Transaction” [Section 2(9)(A)]
EXCEPTIONS – PROPERTY HELD BY
FIDUCIARY CAPACITY- Like Executor, Trustee, Partner, Director, Depository
Karta or a member of HUF- for benefit of all and consideration paid by HUF
Spouse/child (Son or Daughter)
Brother, Sister
Lineal Ascendant/Descendant
(Jt. Ownership)
Consideration out of KNOWN SOURCES
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CIRC

4. CASE STUDY - PURCHASE OF HOUSE IN THE NAME OF MOTHER
Transfers Rs 50 Lakhs
Purchased house in her name for Rs 50 Lakhs
Let out
Rajesh (Son)
Kamla Devi (Mother)
Rental Income
Used for education of Ayush (Grand Child)
Enjoyed by Mother
Benami
Not Benami
CA RAJEEV SOGANI
CIRC

5. “Benami Transaction” [Section 2(9)(B)]
A TRANSACTION /ARRANGEMENT in respect of
a PROPERTY carried out or made in a FICTITIOUS NAME
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6. “Benami Transaction” [Section 2(9)(C)]
TRANSACTION/ ARRANGEMENT
a PROPERTY where the OWNER of a property
is not AWARE of, or DENIES knowledge of, such OWNERSHIP
CA RAJEEV SOGANI
CIRC

7. “Benami Transaction” [Section 2(9)(D)]
TRANSACTION/ARRANGEMENT in respect of
PROPERTY where the PERSON PROVIDING THE CONSIDERATION
is not TRACEABLE or is FICTITIOUS
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CIRC

8. COLOUR OF MONEY UNDER BENAMI LAW
BENAMI TRANSACTION
COLOUR OF MONEY
IRRELEVANT
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CIRC

9. CASE STUDY- INVESTMENT IN HP, FOUND IN SEARCH
Purchased HP
Registered
In cash for Rs 50 L
In the name of
Mr. Ram
(Trusted Employee)
Mr. Kamal (Employer)
*Electricity, Local Taxes and other repair expenses paid by Mr. Kamal.
Search conducted u/s 132
Evidence found of UNACCOUNTED MONEY of Mr. Kamal
Evidence found of ACCOUNTED money invested by Mr. Kamal
Income Tax liability on Mr. Kamal
Benami Transaction
No Income Tax implication
Benami Transaction  ×  
CA RAJEEV SOGANI
CIRC

10. “Benami Property” [Section 2(8)]
Any ‘PROPERTY’
SUBJECT MATTER of BENAMI TRANSACTIONS
INCLUDES PROCEEDS from such property
‘property’
-Section 2(26) EXHAUSTIVELY defines ‘PROPERTY’
ASSETS OF ANY KIND
- movable or immovable
- tangible or intangible
- corporeal or incorporeal
- rights or Interest
- legal documents or instruments
evidencing title or interest
property in converted form
proceeds from property
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CIRC
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11. CASE STUDY - INVESTMENT THROUGH SHELL COMPANIES
Kolkata Pvt. Ltd
Pinkcity Pvt. Ltd
having
Cheque issued
Shares alloted
100 Lakhs cash
(unaccounted money)
Deposited cash
Pinkcity Pvt. Ltd. purchased LAND out of share application money.
AO invoked section 68 of the Income Tax Act, 1961 against Pinkcity Pvt. Ltd
Admitted before Settlement Commission
Appeal filed by Pinkcity Pvt. Ltd.
Implication under Benami law- Confiscation or not
Also, what will be Confiscated ?- Shares or Land
CA RAJEEV SOGANI
CIRC

12. CASE STUDY - USING BUSINESS ASSETS FOR PERSONAL PURPOSE
Cheque issued
For purchase of car
Father
(Wealthy & Retired)
Son’ s Company
Purchased car in the name of Company
being completely used by
Benami Law Applicable
Depreciation claimed by the company
CA RAJEEV SOGANI
CIRC

13. CASE STUDY - CASH SEIZED BY POLICE
Mr. Anand
Carrying cash Rs 100 Lakhs in his car
Police Officer
Seized by police and Mr. Anand not able to prove source of funds
Requisition u/s 132A made by the Income Tax Department
Proved to be unaccounted money of ANOTHER PERSON
Admitted as OWN unaccounted money × 
Benami law
Benami law
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CIRC

14. CASE STUDY - CASH DEPOSITED IN EMPLOYEES’ A/C
Rahul (Employer)
Rahul
Purchased land from this loan amount
Distributed old currency lakhs
Transferred as loan
Ram
Shyam
Gopal
Arjun
Benami Law Applicable
Rs. 100 Lakhs
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CIRC

15. RETROSPECTIVE APPLICABILITY SECTION 5
OLD LAW
Properties held Benami shall be subject to ACQUISITION by such authority, in such manner and after following such procedure as may be prescribed.
NEW LAW (Section Replaced)
Any property, which is subject matter of benami transaction, shall be liable to be CONFISCATED by the Central Government.
SECTION 1(3) [UNCHANGED]:
Provisions of SECTIONS 3, 5 AND 8 shall come into force AT ONCE
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16. SECTION 6: Prohibition on Re-transfer of property by Benamidar
Benamidar shall not RE-TRANSFER the Benami Property to the Beneficial Owner, or any person acting on his behalf.
If transferred, it shall be NULL and VOID.
Section not applicable in case of transfer made under INCOME DISCLOSURE SCHEME, 2016.
CA RAJEEV SOGANI
CIRC

17. SOP : “IMPLEMENTATION OF BENAMI LAW”
Issued on , by CBDT
Directions to Income Tax officers :-
“SENSITIVE” to information, during enquiry/investigation (Searches/Survey), which may be relevant under Benami Law
HARMONIOUS INTERPRETATION under Income Tax Act and Benami Law
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CIRC

18. By – CA Rajeev Sogani rsa@soganiprofessionals. com www
By – CA Rajeev Sogani
CA RAJEEV SOGANI
CIRC