Mumbai News: HC Quashes Benami Assets Complaint Against Chhagan Bhujbal, Son & Nephew

Mumbai News: HC Quashes Benami Assets Complaint Against Chhagan Bhujbal, Son & Nephew

The Benami Prohibition Unit and Income Tax (Benami prohibition unit) Department had lodged a complaint against Bhujbals and their firms – M/s. Armstrong Infrastructure.

Urvi MahajaniUpdated: Tuesday, December 12, 2023, 10:02 PM IST
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Chhagan Bhujbal | PTI

Mumbai: In a relief for NCP (Ajit Pawar faction) Chhagan Bhujbal, his son Pankaj and nephew Sameer, the Bombay High Court recently quashed an alleged  “benami assets” complaint filed against them and their firms in 2021.

The Benami Prohibition Unit and Income Tax (Benami prohibition unit) Department had lodged a complaint against Bhujbals and their firms – M/s. Armstrong Infrastructure

The Benami complaint

Private Limited, Parvesh Constructions Private Limited and M/s. Devisha Constructions Private Limited – under the amendment to Prohibition of Benami Property Transactions Act. The department alleged that the assets were allegedly created by them using a maze of about four dozen shell companies. Based on the complaint, the magistrate had initiated criminal proceedings against them on November 17, 2021. 

Bhujbals and the three firms approached the HC seeking quashing of the complaints and the magistrate’s order. 

Justice RN Laddha, on December 8, quashed the case against them noting that the issue raised in their petitions was “squarely covered” by the judgment in the case of Union of India & others  v/s. Ganpati Delcom Pvt. Ltd. 

The Supreme Court had held that the Prohibition of Benami Property Transactions Act, 1988, as amended by the Benami Transactions (Prohibition) Amendment Act, 2016, cannot have retrospective effect. The Central Board of Direct Taxes (CBDT) has filed a review petition before the SC judgement against its judgment which is pending. 

The HC said that the same reasoning was applicable to Bhujbals’ case and quashed the complaints. 

Justice Laddha, however, granted liberty to the authorities to revive the proceedings in case the review petition pending before the Supreme Court filed by the CBDT is allowed.

In 2017, a provisional attachment notice was issued under Section 24(3) of the Benami Transactions (Prohibition) Act, 2016 [where the tax authority thinks the person in possession of the property held benami may alienate the property]. 

Assets and properties attached by authorities

The authorities attached Girna sugar mills in Nashik valued at over ₹80.97 crore and multi-storeyed residential building Solitaire in Mumbai’s Santacruz West area valued at more than ₹11.30 crore. Other assets attached included the Habib Manor and Fatima Manor building in Bandra West area valued at over ₹43.61 crore (benamidar: Parvesh Construction Pvt Ltd) and a plot of land in Panvel in Raigad valued at over ₹87.54 crore (benamidar: Devisha Infrastructure Pvt Ltd).

The total cost of attached properties was valued at over ₹223 crore. However, the department claimed that the market  value of these was more than ₹300 crore.

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