Jodhpur: The Rajasthan High Court has set aside the attachment of 79 immovable properties belonging to M/s Alishan Complex Pvt. Ltd., holding that the authorities failed to prove that the properties were benami or that businessman Mahaveer Lunia was their real owner.
The Division Bench of Justice Arun Monga and Justice Sandeep Shah ruled that suspicion and uncorroborated statements cannot take the place of legal proof in proceedings under the Prohibition of Benami Property Transactions Act.
The case arose from an Income Tax search conducted on the Maharani Group in June 2022, during which officials recovered a list of 79 properties standing in the name of Alishan Complex Pvt. Ltd. and some original sale deeds from Mahaveer Lunia’s residence.
Relying on these documents and the statement of Chartered Accountant Anil Sanklecha, the Benami Prohibition Unit alleged that Lunia had routed unaccounted money through shell companies to purchase the properties in the company’s name, making the company merely a benamidar while Lunia remained the beneficial owner.
The properties were subsequently attached, and the attachment was upheld by the Adjudicating Authority as well as the Appellate Tribunal.
Challenging these orders, Alishan Complex argued that it is a genuine real estate company and had purchased all the properties during 2017-18 using its own accounted funds through banking channels. It also submitted that Mahaveer Lunia became a director only in 2020, nearly three years after the purchases, making the allegation that he was the beneficial owner unsustainable.
The company further relied on a crucial Income Tax assessment order passed during the pendency of the appeal.
The Assessing Officer accepted that the investments were duly recorded in the company’s books, backed by registered sale deeds, made through banking channels and that the source of funds had been satisfactorily explained. As a result, no addition was made for unexplained investment under the Income-tax Act.
Examining the record, the High Court found that the Benami authorities had failed to establish the two essential requirements of a benami transaction, that Mahaveer Lunia had actually paid the consideration for purchasing the properties and that the company was merely holding them for his benefit.
The Bench observed that merely recovering sale deeds from a person’s residence or his subsequent association with the company does not automatically make him the real owner of the company’s assets.
The Court also noted that the authorities had heavily relied on the statement of Chartered Accountant Anil Sanklecha, even though it had later been retracted. It held that a retracted statement, without independent corroborative evidence, could not be the sole basis for declaring valuable immovable properties as benami.
Allowing the appeal, the Rajasthan High Court set aside the orders of the Benami authorities and held that they had failed to prove the 79 properties were benami. The Court said such serious action cannot be based on suspicion alone and must be supported by clear evidence