Benami Transactions (Prohibition) Amended Act, 2016

Benami Transactions (Prohibition) Act, 1988 is an Act of the Parliament of India that prohibits certain types of financial transactions. The act defines a 'benami' transaction as any transaction in which property is transferred to one person for a consideration paid by another person. Such transactions were a feature of the Indian economy, usually relating to the purchase of property (real estate), and were thought to contribute to the Indian black money problem. The act bans all benami transactions and gives the government the right to recover property held benami without paying any compensation.

The act came into force on 5 September 1988. Although benami transactions are now illegal, the act had limited success in curbing them. Updated versions were therefore passed in 2011 and 2016, seeking to more comprehensively enforce the prohibitions.

In an attempt to curb black money, in July 2016, Modi government decided to amend the original act which was subsequently passed by the Parliament of India as "The Benami Transactions (Prohibition) Amendment Act, 2016". Thereafter, the Government notified the provisions of the act to come into force from 1 November 2016. Mint newspaper reported that the Benami act along with the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015, will help the Government in its fight against black money both within and outside the country. The 2016 Act also has safeguard mechanisms such as the adjudicating authority and the appellate mechanism for appeals.

The act "prohibits illegal benami transactions, and provides imprisonment up to seven years and fine for violation of the Act which may extend to 25% of the fair market value of the benami property

The Benami Transactions (Prohibition) Amendment Act, 2016 came into effect from1st November, 2016. Several benami transactions have been identified since the coming into effect of the amended law. Show cause notices for provisional attachment of benami properties have been issued in 140 cases involving properties of the value of about Rs. 200 crore. Out of these, provisional attachment has already been effected in 124 cases. The benami properties attached include deposits in bank accounts and immovable properties.











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  • India has a new law on Benami Transactions - STRINGENT Law:

    Highlights of the Act:

      Up to seven years' imprisonment and fine for indulging in Benami transactions.
      Furnishing false information is punishable by imprisonment up to five years and fine.
      Properties held Benami are liable for Confiscation by government without compensation holding the property and may then refer case to Adjudicating Authority.
      Adjudicating Authority will then examine evidence and pass an order.
      Appellate Tribunal will hear appeals against orders of Adjudicating Authority.
      High Court to hear appeals against orders of Appellate Tribunal.

      Legislature Background:
      The Benami Transactions (Prohibition) Amendment Act, 2016 is an amendment of the older Benami Transactions (Prohibition) Act 1988.

        The Amendment Bill, 2015 was first introduced in the Lok Sabha last year, on May 13, 2016 by Finance Minister Arun Jaitley.
        Then referred to by a Standing Committee on Finance.
        The Committee submitted its report on April 28, 2016.
        Then amendments proposed by Government to the Amendment Bill, 2015 on July 22nd , 2016.
        Amendment Bill Passed by the Lok Sabha on July 27, 2016
        Approved by the Rajya Sabha on August 2, 2016

        The Amendment Bill received the presidential assent on August 10, 2016 and the Benami Transactions (Prohibition) Amendment Act, 2016 (hereinafter referred as the “Amendment Act, 2016”) was brought into force

        What is Benami?
        Benami essentially means property without a name. The term “Benami” has its origin from the Persian language. Benami property or assets, therefore, is a reference to property/assets whose actual owner is not the person in whose name it is.
        Benami deals have been quite common in India; cases date back to the late nineteenth century, So the practice has got judicial recognition. Not all Benami transactions are illegal.

        Benami transactions proliferated during India’s socialist past. Large scale Benami deals happened when land reforms entailed the abolition of zamindari, giving tillers rights to own the land as well as imposition of agricultural land ceilings. (In urban areas, this became quite rampant after the passage of the now-scrapped Urban Land (Ceiling and Regulation) Act, 1976.
        The concern on Benami transaction comes into light with full energy, in the year 2014 “in the election manifesto of the political party now in power at the Centre, i.e., the Bharatiya Janata Party”

        Meaning of Benami as per ‘Merriam Webster” dictionary: made, held, done, or transacted in the name of (another person) —used in Hindu law to designate a transaction, contract, or property that is made or held under a name that is fictitious or is that of a third party who holds as ostensible owner for the principal or beneficial owner
        Denotation of Benami property:
        As per Clause 2(8) of Benami Transactions (Prohibition) Amendment Act, 2016 Benami Property “means any Property which is the

          subject matter of a Benami transaction and
          also includes the proceeds from such property”

          Legal Meaning of Property: As per clause 2(26)
          “Property" means assets of any kind, whether

            movable or immovable,
            tangible or intangible,
            corporeal or incorporeal and

            includes any right or interest or legal documents or instruments evidencing title to or interest in the property and where the property is capable of conversion into some other form, then the property in the converted form and also includes the proceeds from the property;

            Factual Gist:
            The word Benami property means the property which has purchased in the name of some person other than the person who has financed it. The person who has rendered the required money for the said purchase has not purchased it in his name but in the name of some other person’s name. The person who financed the property has not really purchase and/or purchased it to the benefit of the person on whose name he has purchased it.

            Legal impact:

              The beneficial ownership vests on the real owner.
              The Benamidar bears the ostensible title as described in the Tranfer of Property Act,1882.
              There is no intention to benefit the person in whose name the transaction is made by the person who has financed the purchase of the said Benami property.
              The name of that person, Benamidar, is an alias for that of the person beneficially interested the real owner.

              Rationale of hold the Benami property:
              There are numerous purposes mainly of those are illegal ones and only to accomplish the illegal intentions of the populace:

                The Benami transactions were made in order to find a way with the land ceiling laws, so the real owner can have more landed properties than provided in the abovementioned laws.
                The abovementioned transactions are made to transfer the property in the name of the relatives of the real owner or some other’s name to evade taxation as provided by the tax laws.
                Benami transactions were also used as a way to conceal black money obtained through corrupt practices.

                What is Benami transaction?
                As per Section Clause 2(9) of Benami Transactions (Prohibition) Amendment Act, 2016 Benami Transactions are as follow:
                Table-A

                S. No.
                TRANSACTIONS CONSIDERED AS Benami TRANSACTION


                a)
                (i) A Transaction or an arrangement:

                  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

                  (ii)The property is held for the immediate or future benefit, direct or indirect, of the person who has provided the consideration
                  There are some exemptions in point (ii) as given below in Table – B


                  b)
                  A transaction or an arrangement in respect of a property carried out or made in a fictitious name.


                  c)
                  A Transaction or an arrangement in respect of a property where the owner of the property is not aware of, or, denies knowledge of, such ownership;


                  d)
                  A transaction or an arrangement in respect of a property where the person providing the consideration is not traceable or is fictitious



                  Table-B

                  S. No.
                  TRANSACTIONS NOT CONSIDERED AS Benami TRANSACTION


                  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 Karta, or a member of a Hindu undivided family,
                  as the case may be, and the property is held for his benefit or benefit of other members in the family and the consideration for such property has been provided or paid out of the known sources of the Hindu undivided family



                  ii.
                  a person standing in a fiduciary capacity for the benefit of another person towards whom he stands in such capacity and includes a trustee, executor, partner, director of a company, a depository or a participant as an agent of a depository under the Depositories Act, 1996 and any other


                  iii.
                  any person being an individual in the name of his spouse or in the name of any child of such individual and the consideration for such property has been provided or paid out of the known sources of the individual


                  iv.
                  7any person in the name of his brother or sister or lineal ascendant or descendant, where the names of brother or sister or lineal ascendant or descendant and the individual appear as joint-owners in any document, and the consideration for such property has been provided or paid out of the known sources of the individual


                  v.
                  any transaction involving the allowing of possession of any property to be taken or retained in part performance of a contract referred to in section 53A of the Transfer of Property Act, 1882, if, under any law for the time being in force:
                  (i) consideration for such property has been provided by the person to whom possession of property has been allowed but the person who has granted possession thereof continues to hold ownership of such property;
                  (ii) stamp duty on such transaction or arrangement has been paid; and
                  (iii) the contract has been registered.




                  Penalty
                  Anyone entering into a Benami transaction for whatever reason – to defeat the law, avoid payment of statutory dues or creditors – or abetting such a transaction is liable for rigorous imprisonment for a period between one and seven years as well as fine up to 25 per cent of the fair market value of the property.
                  Anyone providing false information or providing false documentation can get rigorous imprisonment of six months to five years and may also have to pay fine up to 10 per cent of the fair market value of the property.
                  Conclusion:
                  This new Benami Transactions (Prohibition) Act 2016 offers a wider scope. With its wider scope the new act will be a great help to deal with this social fallacy i.e. Benami properties. Due to the narrow and ambiguous scope of the earlier Act many such cases regarding Benami properties could not be solved. But now with the wider and specific scope of the said such cases can be easily proved in the court of law.
                  The popular perception of “Benami property” has now undergone to sea change and it will include all transactions and arrangements beyond the transactions in respect of immovable property.
                  There is a saying of Justice Holmes “Taxes are what we pay for civilized society. I like to pay taxes, with them I buy civilization .”
                  The Benami Transactions (Prohibition) Amendment Act is certainly a very comprehensive piece of legislation and also very stringent. There could be scope for harassment but how that plays out remains to be seen.
                  ---------------------------------------------------------------------------------------
                  http://www.merriam-webster.com/dictionary/Benami
                  According to The Black’s Law Dictionary the term ostensible owner means “apparent owner”
                  The term `property’ is not confined to a piece of real estate. The definition covers assets of any kind – moveable or immoveable, tangible or intangible, corporeal or incorporeal.
                  The transactions relating to shares, securities in limited companies or in partnership firms or the sale proceeds of such shares will also attract the provisions of the new law.
                  As per Clause 2(24) Person shall include- (i) an individual, (iI) a Hindu undivided family, (iii) a Company, (iv) a firm an association of persons or a body of individuals, (v) whether incorporated or not, every artificial juridical person, not falling under sub-clauses (i) to (v)
                  As per Merriam Webster law dictionary fictitious meaning “a supposed but in fact nonexistent person referred to in some legal documents or proceedings”.
                  In other words “A fictitious name is an assumed name that differs from an individual's actual name”
                  mean to refuse to accept as true or valid
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  • CBDT forms 30 special units to catch benami properties, crackdown to begin in June

    At least 25-30 special units across India has been formed by the CBDT to implement its next action-plan against benami properties in India


    The Central Board of Direct Taxes (CBDT) is all set with its special units to implement its next action-plan against benami properties in India.

    These special units are formed only to investigate and take action against all those individuals and entities related to undisclosed domestic and foreign properties. Sources within I-T department said that at least 25-30 special units in 16 regional/zonal offices, across India has been formed.

    Each unit will have four - five members, including 3-4 IT officers, one deputy commissioner and one additional commissioner. "Each unit would be headed by the additional commissioner. He would be reporting to the respective Director General (DG) in that city, who would be in coordination with CBDT chairperson on real time basis", the source said. It is less known, but the entire operation and the action details would be shared with Revenue Secretary (RS) and Prime Minister Office (PMO) too. In the first week of this month, after review meeting with IT officials, the Prime Minister Narendra Modi had asked taxmen to take required steps against owners of benami properties.

    Few days back, a detailed notification on the formation of special units was circulated within the department. "It would take few more weeks. Required infrastructure, training and other facilities would be provided to these special officers. Hence, action would begin by the first week of June", the source said.

    As per the CBDT press release, till mid-February, the IT department had identified 235 benami properties. The main focus would be benami properties that include flats, apartments, bungalows, plots, bank accounts, jewelleries etc.

    In the public interest, the department had informed through advertisements in newspapers, warning that benami properties would get attached and confiscated with (optional) rigorous imprisonment of up to seven years.

    Post-demonetisation, the central government had already enacted the Benami Transactions (Prohibition) Amendment Act, with a fine which may extend to 25 per cent of the market value of the benami property.

    http://indiatoday.intoday.in/story/benami-properties-cbdt/1/947129.html?utm_campaign=crowdfire&utm_content=crowdfire&utm_medium=social&utm_source=twitter#398149620-tw#1494064766180
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  • Crackdown on benami property begins in Madhya Pradesh BHOPAL: After the demonetisation drive that led to seizure of thousands of crores in illegal wealth in Madhya Pradesh, the Income-Tax department has launched a fresh crackdown, this time on benami properties.

    Insiders say 'benami' properties worth hundreds of crores of rupees have been identified in all 51 districts of the state, the majority being in Bhopal, Jabalpur, Gwalior, Indore, Vidisha and Rewa. Sources say they are under scrutiny and the process is on for attachment.

    I-T officials have issued notices to more than 300 people in the state, including some bureaucrats under the Benami Transactions (Prohibition) Amendment Act, 2016, which came into effect on November 1, 2016, said sources. Hush-hush investigations are also underway against a section of politicians and bureaucrats, who have disclosed 'extra income' from roses at their poly houses and farms, said sources in the agency.

    This action marks the next phase of crackdown on black money after demonetisation. "This is the first time we have used this law after it came into force three months back," said a top income tax department official.

    Six new posts have been created within the I-T department specifically to deal with benami properties. Three of these officers are headquartered at Bhopal and three in Raipur. A letter in this regard was sent by the office of the principal commissioner of income tax on Tuesday.

    I-T sleuths have approached municipal corporations seeking details of properties that have been declared 'benami' for nonpayment of property taxes. "Once we get the details of benami properties we will decide upon further action," an officer told TOI. All such properties would be attached.

    The Narendra Modi-led NDA government has been targeting black money holders and their properties, keeping the promises BJP made in the run-up to the general elections 2014. Authorities pointed out that the government gave enough opportunities to evaders in the form of two income disclosure schemes to come clean.

    The Benami Transaction (Prohibition) Act was first enacted in 1988, but it was not notified due to some infirmities. Rules under the law were never framed. The UPA government had introduced a Benami law in 2011 but it lapsed with the dissolution of Lok Sabha. To provide an effective regime for prohibition of benami transactions, the said Act was amended through Benami Transaction (Prohibition) Amended Act, 2016.

    http://timesofindia.indiatimes.com/city/bhopal/crackdown-on-benami-property-begins-in-mp/articleshow/58306318.cms
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  • Benami property: Linking Aadhaar to land records will lead to wrongdoers undoing

    Though India is still far from guaranteeing title, considerable progress has been made in digitisation of land records.

    Under the Digital India Land Records Modernization Programme (DILRMP) which was launched by the Union government in August 2008, out of the country’s 560,717 revenue villages, computerisation of land records has been completed in 86% cases.

    Though India is still far from guaranteeing title, considerable progress has been made in digitisation of land records. Under the
    Digital India Land Records Modernization Programme (DILRMP) which was launched by the Union government in August 2008, out of the country’s 560,717 revenue villages, computerisation of land records has been completed in 86% cases. Once this is done in all, presumably there could be more movement in the Conclusive Land Titling System (CLTS) that has been completed as a pilot in Chandigarh. Under this, the government stands by the authenticity of all data in its municipal records. So, if the records show Land A belongs to Person B, when Person C buys this and then finds B does not own the land, the government will compensate C.

    What has happened, meanwhile, is that Haryana, Madhya Pradesh, Maharashtra, Chhattisgarh, Andhra Pradesh and Telangana have agreed to make their land records available online and link them to the Aadhaar number of the owner. Once complete, this will be a valuable step in catching those with benami properties across the country. What it will require, though, is for PAN to also be linked with Aadhaar. Linking of properties to an Aadhaar numbers, in itself, will also be a big step since the municipal authorities will clearly know who the owner of the property it. In itself, however, it may not yield much since, in many cases, the owner may be a benami one, say a domestic servant. Once the authorities are able to link all PAN with Aadhaar numbers and then link the databases, they can find out that the owner of a particular property does not have a PAN, or perhaps is declaring an annual income which does not match the cost of the property—upon investigation, chances are, the authorities will find out that the property is benami. Indeed, once the twin seeding with Aadhaar is done, the taxman can do searches to match property values with annual incomes declared. The entire process could take a year or two, but once done, will be a big step in India’s fight against
    black money.

    http://www.financialexpress.com/opin...ndoing/616834/
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  • I-T dept tightens tax noose Amdavadis Amdavadis are on tenterhooks. The government’s income-declaration scheme has ended, and the Income-Tax department has launched another crackdown to bring tax evaders to task. This time, though, the department is expected to take severe action against erring assessees. Till now, the I-T department had been trying to get people to declare their money under the Pradhan Mantri Garib Kalyan Yojana (PMGKY), which closed on March 31. I-T officers verified financial documents and if satisfied with the explanation, they simply left the assessees alone. However, tax evaders caught in the second phase will have to face severe action ranging from heavy taxation to imprisonment for up to 7 years under the new Benami Act.

    Evading taxes
    The government gave a chance to the people by letting them deposit their money under Pradhan Mantri Garib Kalyan Yojana, 2016 (PMGKY) but most of them decided against doing so, thinking that I-T officials would not come after them, said chartered accountants from the city. “Thousands of people deposited large sums of money showing it was cash on hand, obtained from sales or was loaned to a relative who now gave it back. People created fictitious cash balance by drawing new cash books and faking entries. All these people who abused the system will now be under scrutiny,” said Sunil Talati, former national President of the Institute of Chartered Accountants of India (ICAI). For example, a city-based textile firm owner whose company earns a profit of Rs 1 crore annually showed a profit of Rs 60 lakh by September. However, he deposited Rs 3 crore of unaccounted money in November. The owner is now looking for a way to somehow justify the deposit to the I-T department, in case he receives a notice. Similarly, a jeweller deposited Rs 98 lakh during demonetisation. Usually, he doesn’t deposit more than Rs 30-35 lakh usually in his bank account. He is now anxious that the I-T may end up finding about all the illegal transactions he carried out by back-dating his receipts. During the first phase, the department had sent online queries to the people so that they could explain the source of cash deposits. In the second phase, people are going to directly receive notices and summons. A source in the I-T department said, “The list is being compiled and the department will soon start sending out notices. Searches and surveys have been going on round the clock. After builders, jewellers are to be the next likely target. The Sensitive Transactions Intelligence Unit (STIU) of the department is specifically looking after such cases.”

    Strict action
    Former chairman of ICAI (Ahmedabad chapter) Vikas Jain said, “Those found guilty will not only face heavy taxation in the range of 77%-128% but might also face criminal prosecution under Section 276C of the I-T Act. The Act pertains to wilful attempt to evade taxes and could lead to imprisonment for up to 7 years. People who used dormant bank accounts of other individuals to deposit their money will face a crackdown under the newly enforced Benami Transactions Act.” He added that under the Act, violators could be sentenced to a jail for seven years and in cases of property involvement they shall also be liable to a fine which may extend to 25% of the fair market value of the property.

    Looking for big fish
    The I-T department has launched Operation Clean Money-II at a national level in which more than 60,000 people have been identified for investigation. While phase 1 of the operation launched on January 31, was aimed at people who deposited Rs 10 lakh or more, phase two launched last week was expected to target people who deposited between Rs 5 and Rs 10 lakh. However, recent searches on some of the city’s biggest real estate groups, who are believed to have committed tax evasion of several crores, has given rise to theories that the department is going to focus on the big businessmen. The tax agency is reported to have used Advanced data analytics to detect suspect cash deposits. A data analytics firm has already started the analysis of such cash deposits made during demonetisation drive.

    The data analytics firm has been analysing the deposits in bank accounts before and after November 8 last year — the day the government decided to junk 86 per cent of the currency in circulation. This exercise will also attempt to link individuals with multiple accounts or PAN numbers who have deposited large sums of money. The I-T Department has begun analysing accounts which show a pattern of deposits or have some common linkage like common address, PAN, telephone number, email address or name. The income-tax department statement said that since demonetisation, it has detected Rs 9,334 crore of undisclosed income across the country and referred about 400 cases to the Enforcement Directorate and the Central Bureau of Investigation.

    http://ahmedabadmirror.indiatimes.com/ahmedabad/others/i-t-dept-tightens-tax-noose/articleshow/58248632.cms

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  • Harsh punitive actions to be taken against the deviant Shell Companies including freezing of Bank Accounts, striking off the names of dormant companies, invocation of Benami Transactions (Prohibition) Amendment Act, 2016;


    A Task Force set-up under the Co-chairmanship of the Revenue Secretary and Corporate Affairs Secretary with members from various regulatory Ministries and Enforcement Agencies to monitor the actions taken against deviant shell companies by various agencies.


    A Meeting was held today in Prime Minister’s Office (PMO) along with the Senior Officers of various Departments to review the functioning of ‘Shell Companies’ (companies which does not conduct any operations and indulge in money laundering) in India, so as to prevent their misuse for money laundering and tax-evasion, especially in the context of unearthing black money post demonetization. There are about 15 lakh registered companies in India; and only 6 lakh companies file their Annual Return. This means that large number of these companies may be indulging in financial irregularities.

    In the initial analysis, it has been found that ‘Shell Companies’ are characterized by nominal paid-up capital, high reserves & surplus on account of receipt of high share premium, investment in unlisted companies, no dividend income, high cash in hand, private companies as majority shareholders, low turnover & operating income, nominal expenses, nominal statutory payments & stock in trade, minimum Fixed Asset.

    In a small sample analysis of such companies, it has been found that Rs.1,238 crore cash has been deposited in these entities during November-December period. Serious Fraud Investigation Office (SFIO) has filed criminal prosecution for cheating National Exchequer after investigation of entry operators running a group of 49 Shell Companies and other proprietorship concerns. It has been found that 559 beneficiaries have laundered money to the extent of Rs.3900 Crore with the help of 54 Professionals who have been identified. These information has been shared with SIT, Income Tax Department, Enforcement Directorate, SEBI and The Institute of Chartered Accountants of India (ICAI). Income Tax Department has reopened completed assessment in these cases and Enforcement Directorate has initiated action under Prevention of Money Laundering Act (PMLA), 2002. ICAI has also initiated disciplinary proceedings against its members. Winding up process has been initiated in respect of 49 Shell Companies.
    In order to create a credible deterrence a “Whole of Government Approach” will be adopted through coordinated efforts and by leveraging technology. It has also been decided that appropriate red flag indicators would be used for identifying shell companies, and a data base of such companies and their Directors would be built by pulling in information from various agencies. The data base will also capture Aadhar number of individual Directors in the companies.

    Harsh punitive actions will be taken against the deviant shell companies which will include freezing of Bank Accounts, striking off the names of dormant companies, invocation of Benami Transactions (Prohibition) Amendment Act, 2016.

    A Task Force with members from various regulatory Ministries and Enforcement Agencies has been set-up under the Co-chairmanship of the Revenue Secretary and Corporate Affairs Secretary to monitor the actions taken against deviant shell companies by various agencies. The concerned regulatory Ministry will ensure that disciplinary actions are initiated against the professionals indulging in mal practices and abetting the entry operators of the shell companies.

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  • Enforcement Directorate raids 300 shell companies across 16 states

    Official sources said the action is part of the mandate given to the ED under a Special Task Force created by the government last month on the directions of the Prime Minister's Office.

    In one of its biggest crackdown on shell companies, the Enforcement Directorate on Saturday conducted simultaneous raids on around 110 premises and 300 shell companies across the country that were suspected to be involved in dubious and illegal transactions during demonetisation, officials said. The country-wide operation was carried out across 16 states with multiple teams of the agency raiding premises of about 300 shell firms in prominent places like Delhi, Chennai, Kolkata, Chandigarh, Patna, Ranchi, Ahmedabad, Bhubaneswar and Bengaluru among others.

    “Several top business houses being searched in various cities such as Mumbai, Delhi, Chennai, Bengaluru and Kolkata,” the official told IANS.

    The raids are being carried out under the Prevention of Money Laundering Act (PMLA) and the Foreign Exchange Management Act (FEMA) to investigate instances of money laundering and illegal foreign exchange transactions.

    Official sources said the action is part of the mandate given to the ED under a Special Task Force created by the government last month on the directions of the Prime Minister’s Office.

    The task force was created under the co-chairmanship of the Revenue Secretary and Corporate Affairs Secretary to monitor the actions taken against shell companies by various agencies from regulatory ministries and Enforcement Agencies.

    In a statement, the Finance Ministry said last month that harsh punitive action will be taken against shell companies, including freezing of bank accounts, striking off names of dormant companies and invoking Benami Transactions (Prohibition) Amendment Act, 2016.
    Shell Companies are companies that exist only on paper, and can be used for money laundering.

    The statement said there were about 15 lakh registered companies in India and only six lakh of these file their annual returns.



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  • Income Tax Dept Identifies 400 Benami Transactions...
    
    Teams provisionally attach properties worth Rs 600 crore in more than 240 cases
    Income tax authorities have launched a crackdown on benami properties and identified more than 400 such transactions, including deposits in bank accounts, plots of land, flats or jewellery.

    The Central Board of Direct Taxes, apex direct taxes body, set up 24 dedicated benami prohibition units or BPUs across India last week.

    These units will be under principal directors of investigation to enable swift action.

    Provisional attachment of properties under the law has been carried out in more than 240 cases. The market value of properties under attachment is more than `600 crore.Immovable properties have been attached in 40 cases, with a total value of more than `530 crore, in Kolkata, Mumbai, Delhi, Gujarat, Rajasthan and Madhya Pradesh, an official statement said on Wednesday.

    In one case, a driver was found to be owner of land worth ` 7.7 crore and the beneficial owner was a Madhya Pradesh-based listed company. His employer, a professional, was found to be holding several immovable properties in the name of shell companies that exist only on paper.

    In another case, a jeweller in Sanganer, Rajasthan, was found to be the beneficial owner of nine immovable properties in the name of his former employee, a man of no means.

    Certain properties purchased through shell companies have also been attached by the income tax department in Kolkata. The Benami Transactions (Prohibition) Amendment Act, 2016 came into effect from November. Benami property, as per the Act, includes movable or immovable property, tangible or intangible property, corporeal or incorporeal property.

    The Act empowers provisional attachment and subsequent confiscation of benami properties. It also allows for prosecution of the beneficial owner, the benamidar, the abettor and the inducer to benami transactions, which may result in rigorous imprisonment up to seven years and fine up to 25% of fair market value of the property.





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  • 300 Benami Assets of Netas in Kolkata Under I-T Lens
    
    Within six months of the Benami Property Act coming into force, the Income Tax department of the Kolkata circle has made a list of 300 such properties belonging to several politicians.

    Sources in the department told ET that confiscation of the properties in the city, and prosecution of the owners are likely . They further said that the Income-Tax department would prepare another list of Benami properties belonging to politicians, especially those from the districts across West Bengal.

    Raids are expected once the ongoing investigation ends, said a highly ranked official.

    “A special team from the Income Tax department is working on Benami properties. We have already stumbled upon cases where senior politicians have bought properties in the names of their associates. Out of 300 properties identified in the city, many are in south Kolkata,“ the official told ET.

    The department has formed a special unit called Benami Properties Unit (BPU) to identify and probe such assets. Apart from politicians, there are hundreds of such properties belonging to some top businessmen in the city, he added.According to the Act, government agencies can confiscate the properties and prosecute the Benamidaar (the person in whose name the property has been purchaser
    ]
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  • Tax lens on cash dealings


    I-T Dept says those receiving over `2 lakh in cash transactions will be penalised.

    The Income Tax Depart ment has warned peo ple against indulging in cash transaction of `2 lakh or more. It has said that the receiver of the amount will have to cough up an equal amount as penalty. It also advised people who have knowledge of such dealings to tip-off the tax department by sending an email to blackmoneyinfo@incometax.gov.in. The government banned cash transactions of `2 lakh or more with effect from 1 April 2017.

    The newly inserted section 269ST in the Income Tax Act bans such cash dealings on a single day, in respect of a single transaction or transactions relating to one event or occasion from an individual.

    “Contravention of Section 269ST would entail levy of 100% penalty on receiver of the amount,“ the tax department said in a public advertisement in leading dailies.

    In the last Budget, Finance Minister Arun Jaitley had proposed to ban cash transaction of over `3 lakh. This limit was lowered to `2 lakh as an amendment to the Finance Bill, which was passed by the Lok Sabha in March.

    The restriction is not applicable to any receipt by government, banking company, post office savings bank or cooperative bank. The move to ban cash transaction above a threshold was aimed at curbing black money by discouraging cash transaction and promoting digital economy.

    The tax department had started the email address blackmoneyinfo@incometax.gov.in in December last year post the demonetisation of `500 and `1,000 notes.

    It had then asked people with knowledge about conversion of black money into blackwhite to inform the government through this mail id.

    Post the demonetisation, people with unaccounted wealth had illegally converted their black money held in old notes to new rupee notes.

    The government had come out with a tax amnesty scheme under which people holding unaccounted cash could come clean by declaring their wealth and pay 50% as tax and penalty. A deposit of 25% of the black money was to be made in a zero-interest account for four years.

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  • Fight against benami properties may affect homebuyers, banks
    Attachment of real estate projects under development to dredge out benami properties will trigger a chain of defaults, says top banker

    Laws prohibiting benami transactions came into force in 1988, but the government gave them teeth only last year. Indranil Bhoumik/Mint
    Kolkata: As the income-tax (I-T) department digs deeper to dredge out so-called benami properties—ones held through proxies of the real owners—it is facing the unpleasant prospect of attaching real estate projects under implementation, affecting developers, customers and even banks.

    Some of the properties under the department’s scanner for which provisional attachment notices have been issued may be under development, admitted four officers in the tax department. These officers, who asked not to be identified, added that they have just started the physical verification of properties they have identified as benami.

    Attachment of properties under development will be an “unmitigated disaster” for both lenders and the embattled real estate sector, said a top banker who asked not to be named. “It will trigger a chain of defaults and cause a lot of inconvenience to homebuyers,” he added.

    The department understands the implications for common people, said one of the I-T officers cited above. There was a lot deliberation internally, but the department concluded that there was no way out.

    Sadly for lenders and homebuyers, it is almost impossible to identify a benami property from routine record searching.

    The department, which has formed separate teams across India to investigate benami properties, has issued provisional attachment notices for over 400 properties, and attached properties worth Rs600 crore across 240 deals, according to a 24 May statement from the Central Board of Direct Taxes. Most of these 400 properties are land and buildings, although bank deposits and jewellery are also included.

    In Kolkata, a key land aggregator is also under the department’s scanner, and several properties owned by it in the city and its suburbs have already been attached, according to the I-T officers.

    It isn’t immediately known whether its under-construction residential complex in north Kolkata has been attached, but tax department officers said the group has been identified as “a proxy for unknown beneficiaries”, and any property owned by it is likely to be attached.

    Mint is withholding the name at the request of the officers who fear naming the group and its interests could disrupt the ongoing investigation.

    The man behind the group in Kolkata said the allegations were “completely baseless” and that he would legally challenge them at the appropriate time. “There was no concealment, and I have shown these properties in my books for at least 10 years,” this person claimed. “If they are questioning the source of funds, it is also quite clearly mentioned in my books.”

    This instance is important because it highlights the larger issues involved in the taxman’s fight against benami properties.

    Among the properties of the Kolkata-based group that have been attached is a large 17-acre plot in the city’s suburbs, where the group was looking to develop a 3.1 million sq. ft commercial-cum-residential complex, according to documents reviewed by Mint. It isn’t immediately clear if the group had started to take bookings for this project.

    But a leading real estate developer in West Bengal has already started to build the residential complex in north Kolkata on another 3-acre plot owned by this group, under a development and marketing contract.

    “The project was sold out within hours,” said the chief executive officer of the developer, clarifying that his enterprise didn’t have any ownership in the land. Construction has started and a “fair amount of money” has already been invested in the project, he added.

    Asked how he would deal with potential attachment of the property by the department, the developer said the government should attach the “proceeds from the sale” and not the property itself.

    “If the property is attached, construction will have to be halted, which, to my mind, is beyond reason,” this developer said.

    He and his company are not being named because that will immediately disclose the identity of the group being investigated by the taxmen.

    Section 6 of Benami Transactions (Prohibition) Act says that a property acquired through a proxy cannot be transferred back to the actual beneficiary or another proxy, but does not restrict sale to a third party.

    But sale in this case means transfer by way of registration. If a benami property is sold to a third party and the transaction concluded by way of registry of the sale, the department can only attach the proceeds from the sale, not the property.

    “Shouldn’t the department follow the same principle even in the case of a project under development?” asked the CEO cited above. “Though, technically speaking, title has not been transferred, seeds of third party interest have already been sown.”

    I-T department officers said that if a benami transaction is identified, and the property in question is found to have been transferred to a third party, the department will send notices to current owners seeking clarifications. The current owners will only have to establish through evidence that they were not the original beneficiaries of the benami transaction or proxies, the officers added.

    Only if the I-T department allows the developer to buy out the land, can the project in north Kolkata be rescued, according to a lawyer in Kolkata, who advises several real estate developers and who spoke on condition of anonymity.

    But the department must be taken into confidence even if no attachment notice has yet been issued, and the consideration for the sale deposited in a frozen account, this person added.

    But if a property is under development by its disputed owner itself, delays are inevitable. Some projects may even have to be scrapped, according to the lawyer.

    A spokesperson for CBDT declined comment for this story. A detailed questionnaire sent to her remained unanswered till press time.

    Asked about the implications of the attachment of projects under implementation, Nandu Belani, a leading real estate developer in Kolkata and president of lobby group Confederation of Real Estate Developers Associations of India in West Bengal said there is no option but to move court. And only through judicial intervention will this law get streamlined, he added.

    Laws prohibiting benami transactions came into force in 1988, but the Union government gave them teeth only last year. Not only were the laws made more stringent through key amendments, the I-T department was made the implementing agency.

    “There was no implementing agency previously, so no one cared much,” said the lawyer.

    http://www.livemint.com/Companies/BQn0HksCpMqNAiIPL7ecFL/Fight-against-benami-properties-may-affect-homebuyers-banks.html?facet=amp&utm_source=googleamp&utm_medium=referral&utm_campaign=googleamp
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  • Digitalization of land records, mutation records, sale & purchase records from 1950 and linking to Aadhaar till 14th August 2017.

    http://pib.nic.in/newsite/mberel.aspx?relid=165745

    ​​​​​​Clarification regarding Fake Letter on Aadhaar attributed to Cabinet Secretariat

    JQMJXX6R0_4

    https://youtu.be/JQMJXX6R0_4
    Attachments:
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  • Fight against benami properties may affect homebuyers, banks
    Attachment of real estate projects under development to dredge out benami properties will trigger a chain of defaults, says top banker


    Laws prohibiting benami transactions came into force in 1988, but the government gave them teeth only last year. Indranil Bhoumik/Mint
    Kolkata: As the income-tax (I-T) department digs deeper to dredge out so-called benami properties—ones held through proxies of the real owners—it is facing the unpleasant prospect of attaching real estate projects under implementation, affecting developers, customers and even banks.

    Some of the properties under the department’s scanner for which provisional attachment notices have been issued may be under development, admitted four officers in the tax department. These officers, who asked not to be identified, added that they have just started the physical verification of properties they have identified as benami.

    Attachment of properties under development will be an “unmitigated disaster” for both lenders and the embattled real estate sector, said a top banker who asked not to be named. “It will trigger a chain of defaults and cause a lot of inconvenience to homebuyers,” he added.

    The department understands the implications for common people, said one of the I-T officers cited above. There was a lot deliberation internally, but the department concluded that there was no way out.

    Sadly for lenders and homebuyers, it is almost impossible to identify a benami property from routine record searching.

    The department, which has formed separate teams across India to investigate benami properties, has issued provisional attachment notices for over 400 properties, and attached properties worth Rs600 crore across 240 deals, according to a 24 May statement from the Central Board of Direct Taxes. Most of these 400 properties are land and buildings, although bank deposits and jewellery are also included.

    In Kolkata, a key land aggregator is also under the department’s scanner, and several properties owned by it in the city and its suburbs have already been attached, according to the I-T officers.

    It isn’t immediately known whether its under-construction residential complex in north Kolkata has been attached, but tax department officers said the group has been identified as “a proxy for unknown beneficiaries”, and any property owned by it is likely to be attached.

    Mint is withholding the name at the request of the officers who fear naming the group and its interests could disrupt the ongoing investigation.

    The man behind the group in Kolkata said the allegations were “completely baseless” and that he would legally challenge them at the appropriate time. “There was no concealment, and I have shown these properties in my books for at least 10 years,” this person claimed. “If they are questioning the source of funds, it is also quite clearly mentioned in my books.”

    This instance is important because it highlights the larger issues involved in the taxman’s fight against benami properties.

    Among the properties of the Kolkata-based group that have been attached is a large 17-acre plot in the city’s suburbs, where the group was looking to develop a 3.1 million sq. ft commercial-cum-residential complex, according to documents reviewed by Mint. It isn’t immediately clear if the group had started to take bookings for this project.

    But a leading real estate developer in West Bengal has already started to build the residential complex in north Kolkata on another 3-acre plot owned by this group, under a development and marketing contract.

    “The project was sold out within hours,” said the chief executive officer of the developer, clarifying that his enterprise didn’t have any ownership in the land. Construction has started and a “fair amount of money” has already been invested in the project, he added.

    Asked how he would deal with potential attachment of the property by the department, the developer said the government should attach the “proceeds from the sale” and not the property itself.

    “If the property is attached, construction will have to be halted, which, to my mind, is beyond reason,” this developer said.

    He and his company are not being named because that will immediately disclose the identity of the group being investigated by the taxmen.

    Section 6 of Benami Transactions (Prohibition) Act says that a property acquired through a proxy cannot be transferred back to the actual beneficiary or another proxy, but does not restrict sale to a third party.

    But sale in this case means transfer by way of registration. If a benami property is sold to a third party and the transaction concluded by way of registry of the sale, the department can only attach the proceeds from the sale, not the property.

    “Shouldn’t the department follow the same principle even in the case of a project under development?” asked the CEO cited above. “Though, technically speaking, title has not been transferred, seeds of third party interest have already been sown.”

    I-T department officers said that if a benami transaction is identified, and the property in question is found to have been transferred to a third party, the department will send notices to current owners seeking clarifications. The current owners will only have to establish through evidence that they were not the original beneficiaries of the benami transaction or proxies, the officers added.

    Only if the I-T department allows the developer to buy out the land, can the project in north Kolkata be rescued, according to a lawyer in Kolkata, who advises several real estate developers and who spoke on condition of anonymity.

    But the department must be taken into confidence even if no attachment notice has yet been issued, and the consideration for the sale deposited in a frozen account, this person added.

    But if a property is under development by its disputed owner itself, delays are inevitable. Some projects may even have to be scrapped, according to the lawyer.

    A spokesperson for CBDT declined comment for this story. A detailed questionnaire sent to her remained unanswered till press time.

    Asked about the implications of the attachment of projects under implementation, Nandu Belani, a leading real estate developer in Kolkata and president of lobby group Confederation of Real Estate Developers Associations of India in West Bengal said there is no option but to move court. And only through judicial intervention will this law get streamlined, he added.

    Laws prohibiting benami transactions came into force in 1988, but the Union government gave them teeth only last year. Not only were the laws made more stringent through key amendments, the I-T department was made the implementing agency.

    “There was no implementing agency previously, so no one cared much,” said the lawyer.
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  • Goodbye, old laws: Modi government scraps 1,200 redundant Acts, 1,824 more identified for repeal

    The Narendra Modi government "is determined to relegate several archaic Acts to history. Laws need to be consonant with the times. 1,200 redundant Acts have been scrapped. 1,824 more have been identified for repeal," said law minister Ravi Shankar Prasad.




    HIGHLIGHTS

      1 Before Modi govt, only 1,301 obsolete laws were removed
      2 Repealing obsolete laws was a BJP poll promise
      3 1,200 redundant Acts have been weeded out in the last three years
      Under the Indian Motor Vehicles Act 1914, an inspector in Andhra Pradesh must have well-brushed teeth, and will be disqualified if he has a pigeon chest, knock knees, flatfeet and hammer toes.

      This is one among a tangle of bizarre, archaic laws, which survived for years like a relic in a museum but with no relevance in modern India.

      Many of these rules put up obstacles to running smooth administration and ease to do business. The Narendra Modigovernment had made it clear at its inception that it was time for these dinosaurs to go extinct.

      Among the myriad laws in India, there are those that made strange demands. A century-old one said the toll tax for boats ferrying passengers across the river Ganga cannot be more than two annas - a denomination not in use any more.

      According to another one, policemen in some states have to ensure that air-dropped pamphlets do not fall in their areas. This was aimed to foil the propaganda campaign during World War II.

      A 200-year-old law allowed the British monarch to review decisions of all Indian courts. But these Acts are now history.

      OLD LAWS SWIFTLY SCRAPPED

      The Modi government is creating a record of sorts in scrapping these old, redundant and archaic laws from statute books.

      While successive governments could remove just 1,301 obsolete laws which came in the way of smooth administration and economic growth in 65 years, the present central government has managed to weed out as many as 1,200 Acts in just three years. As many as 1,824 more obsolete central Acts have been identified for repeal.

      The Opposition-dominated Upper House too played its part when it passed the bills concerning repeal of 1,159 central laws. The Rajya Sabha passed four such bills.

      "The Modi government is determined to relegate several archaic Acts to history. Laws need to be consonant with the times. 1,200 redundant Acts have been scrapped. 1,824 more have been identified for repeal," said law minister Ravi Shankar Prasad.

      Before this, under the Indian Aircraft Act, 1934, kites were also aircraft and you needed to obtain a permit as required for an aeroplane.

      Under the Indian Treasure Trove Act, 1878 you could have been jailed if you found anything worth more than Rs 10 and did not report it to a revenue officer.

      POLL PROMISE

      During the 2014 election campaign, Modi promised that if the BJP came to power, for every law passed, his government would repeal 10 obsolete ones.

      Laws on licence to kill and capture of wild elephants in certain circumstances, segregation and medical treatment of lepers, regulating the grant of titles to qualified persons in western medical science and prohibition of pledging of labour of children (child slavery) are among those abolished.

      Also have been dumped some archaic rules regulating recruitment of foreigners during pre-Independence period, agreement with Pakistan on exchange of prisoners, continuation of use of courts in Bengal, Assam and Punjab for those who migrated to Pakistan and power to regulate prices of newspapers. There were many more laws in the statute books which had been of no use as provisions of most of the old Acts had already been incorporated in new legislation.

      But time is running out for such laws. The government had formed a committee headed by R Ramanujam, secretary to the prime minister's office, to re-examine all Acts recommended to be repealed by the earlier committee on Review of Administrative Laws set up by the Atal Bihari Vajpayee government in 1998.

      After taking the help of the Law Commission, the panel is submitting periodic reports.


      http://indiatoday.intoday.in/story/n.../1/984539.html
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  • Registration of 1 lakh cos cancelled, 37,000 shell firms identified: PM Modi

    xZs6sgQoScw

    Prime Minister Narendra Modi today said that the government is committed to more tough action against firms helping in hiding black money.
    NEW DELHI: Speaking on Foundation Day of Institute of Chartered Accountants of India, Prime Minister Narendra Modi today said that the government is committed to more tough action against firms helping in hiding black money.

    He revealed that over 37,000 such shell firms have been already detected and registrations of more than 1 lakh others have been cancelled. Giving details of action taken post demonetisation, he said data mining shows that over 3 lakh registered companies indulged in suspected dealings. "Government has cancelled registration of over 1 lakh companies in a single stroke and more than 37,000 shell firms have been identified for strong action," he said.

    He called chartered accountants a "big pillar" of the Indian economy and urged them to bring technological innovations to meet global standards.

    Addressing CAs at an event organised by the Institute of Chartered Accountants of India (ICAI), Modi said "You (CAs) take care of the economic health of the country and you are famous world over for your knowledge and financial skills. You are a big pillar of the Indian economy."

    Modi said it was a good coincidence that July 1 was the foundation day of ICAI and the launch day of the Goods and Services Tax ( GST) regime.

    Modi launched a new CA course at the event.

    "I am hopeful the new course will boost the financial skills of people joining this profession. We need to develop a dynamic system in our institutions and human resources to meet the global benchmarks and requirements," Modi said.

    "We will have to see how we can bring technology in the CA field. If chartered accountant firms think of technological innovation, new software, it will open a new market for you."

    Here are the key highlights of his speech:

    * Govt has cancelled registration of over 1 lakh companies and more than 37,000 shell firms have been identified for strong action

    * Post- demonetisation, data mining shows that over 3 lakh registered companies indulged in suspected dealings

    * If you know anyone with black money, warn them that they would not be spared

    * People with blackmoney will face more difficulties when Switzerland begins automatic information exchange with India in 2 yrs

    * Your signature is more powerful than PM's and government also believes the accounts signed by you

    * It's a bitter truth that only 32 lakh Indians have declared over Rs 10 lakh income, despite crores being in high-end professions

    * Impact of our steps to check blackmoney is clear from latest figures of Swiss banks, where Indians' money has dipped to record low

    * Just like doctors don't want people to be ill to get more business, CAs too need to safeguard society's economic health

    * CAs have a big responsibility to ensure that society's #economic health remains good

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