Benami Transactions: Supreme Court strike to benami property holders! Property taken in the name of relatives is in danger

• Supreme Court strikes benami property holders!
• Property taken in the name of relatives is in danger
• The Supreme Court gave a strong message

Benami Transactions: If you have purchased property in the name of a driver, domestic servant, relative or financially weak person, there is a possibility of such property being confiscated. The Supreme Court has given a stern message to those who try to hide black money through ‘Benami’ i.e. assets in other’s name. In a landmark judgment on Friday, the court made it clear that the Income Tax department has powers to seize assets even in cases of benami transactions that took place before 2016. What exactly is the result “text-align: justify;”> Can interest rate on credit card be reduced? Save your money by using these simple tricks

According to ‘The Economic Times’, the verdict has brought under scrutiny individuals who hid their land, houses or financial assets in the names of their drivers, cooks or other middlemen.

Key points in the judgment of the court

While interpreting the ‘Benami Amendment Act’, 2016, the Supreme Court has issued several important directions. Among them the key directives are as follows:

1. Implementation with retrospective effect

The Supreme Court has ruled that the 2016 amendments to the ‘Benami Assets Act’ of 1988, particularly those relating to procedure, investigation and confiscation of assets. It can be applied retrospectively. This means that the government can now also seize properties involved in benami transactions that took place before November 2016.

2. Penal provisions

The court made it clear that while assets involved in ‘benami’ transactions made before November 2016 could be confiscated, the seven-year jail term prescribed under the amended law would not apply in such cases. Under the old law, a maximum sentence of three years’ imprisonment could be imposed; However, no financial penalty will be levied.

3. Transactions through will also under scrutiny

People often used Wills as a means of giving legal form to ‘benami’ assets. The court held that if a property is ‘benami’, the transfer of the property to the actual owner whether by will or by inheritance will be considered illegal. The court further asserted that the court would not remain a mere silent spectator in such cases.

Why is this result important?

According to experts, the verdict empowers the Income Tax department to re-investigate dubious cases dating back two to three decades. The department will no longer rely on paper records alone, but will instead conduct a thorough investigation into the true nature of the transaction. Rahul Garg, Managing Partner, Asayre Consulting, explained that the message is now clear: even if a person manages to escape prosecution, the assets belonging to that person remain at risk of seizure or prosecution.

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