In fresh trouble for the jailed former deputy chief minister of Maharashtra, the Income Tax (I-T) Department has issued notices for the provisional attachment of assets of Bhujbal, his son Pankaj and nephew Sameer Bhujbal and has identified them as ‘beneficiaries’ of the alleged benami assets. The department said the assets were allegedly created by them using a maze of about four dozen shell companies.
The attachment notice, accessed by PTI, has been issued under Section 24(3) of the Benami Transactions (Prohibition) Act, 2016 (where the taxman thinks the person in possession of the property held benami may alienate the property).
The immovable assets attached under the order include Girna Sugar Mills in Nashik, valued at over Rs 80.97 crores and a multi-storeyed residential building, ‘Solitaire’, in Mumbai’s Santacruz west area, valued at more than Rs 11.30 crores. While the mills are in the name of Armstrong Infrastructure Pvt Ltd, the house is in the name of Parvesh Construction Pvt Ltd.
The attachment also includes the Habib Manor and Fatima Manor building in Bandra west area of the Maharashtra capital, valued at over Rs 43.61 crores (benamidar: Parvesh Construction Pvt Ltd) and a plot of land in Panvel in Raigad, valued at over Rs 87.54 crores (benamidar: Devisha Infrastructure Pvt Ltd). While the total cost of the attached ‘benami’ assets has been valued at over Rs 223 crores, the department has said the market value of the assets is more than Rs 300 crores.
The department has identified a total of 44 shell companies, which ‘invested’ funds in two of the three firms identified as ‘benami’ in the order. The order, issued after over four months of investigations by a special I-T team, said the probe ‘clearly shows that the properties were acquired out of unexplained funds of the Bhujbal family, which was routed in guise of share at high premium in the group of companies of the Bhujbals, through a web of shell companies based out of Kolkata, Mumbai and other locations’.
The department has held that the source of funds of these companies of the Bhujbals’, is ‘fictitious’ and ‘unexplained cash credit’ under sections of the Income Tax Act, 1961. The order also relied upon the statements recorded by the ED, under the Prevention of Money Laundering Act (PMLA), of ‘dummy operators’ and chartered accountants of the Bhujbal Group, to establish the benami assets charges. The I-T Department will now move for confiscating these assets after getting approval from the Adjudicating Authority of the Act.
Violators of the benami assets law, enacted in 1988 but implemented from November, 2016, attract a rigorous imprisonment of up to seven years and fine up to 25 per cent of the fair market value of the property.
Benami properties are those, in which the real beneficiary is not the one in whose name the property has been purchased. The act allows for prosecution of the beneficial owner, the benamidar, the abettor and the inducer to benami transactions. It also says that the assets held benami, after final prosecution, are liable for confiscation by the government without payment of compensation.
Chagan Bhujbal, the MLA from the Yeola assembly constituency in Nashik and Sameer, are at present lodged in the Arthur Road jail in Mumbai, after they were arrested by the Enforcement Directorate (ED) in 2016, in a money laundering case. The tax department, in June 2017, had also charged six family members of RJD chief Lalu Prasad Yadav, including his wife, son and daughters, under the benami assets law, in connection with its probe into land deals worth Rs 1,000 crores. As per official data till May 23, 2017, the I-T Department had identified 400 benami transactions in the country and provisional attachment of assets was done in about 240 cases.