Representative image.

MUMBAI: In the first such order in Mumbai, attachments of Rs 2.15 crore in demonetised currency notes deposited by two businessmen in someone else’s bank accounts have been ratified by the adjudicating authority of the Prohibition of Benami Property Transactions Act .

The income tax (I-T) department may initiate criminal action against those who allowed themselves to be used as benami. This includes an agent’s mother in whose account Rs 1.23 crore in demonetised notes belonging to a company was deposited.

Shirt Company India Ltd had allegedly given Rs 1.23 crore to Mihir Desai, an agent, who deposited it in the bank account of his mother, Ragini. Ragini claimed that she had received the money from the company for selling materials to it. I-T investigation directorate officials said there was no such transaction. Subsequently, Desai allegedly tried to fake evidence by creating false entry in the books of accounts, I-T officials claim. Desai and Shirt Company did not respond to TOI’s calls and text messages.

After demonetisation , the I-T department scrutinised several bank deposits after learning that many people got their demonetised currency notes converted by paying 25 to 30% as commission.

In the second case, Mahindra Jain, a benamidar, had deposited Rs 92 lakh in demonetised money in his bank account after government scrapped Rs 500 and Rs 1,000 notes in November 2016. The I-T department learnt that the money belonged to a Sewri-based jeweller. In his statement to the I-T department, Jain said he received the money after selling goods to Bhandari Jewellers, whereas the latter claimed he earned the money by selling goods to other customers. The investigators found their claim to be false as there was no delivery of any goods between Jain and Bhandari. The adjudication authority refused to accept the explanation provided by Jain and the jewellers. When contacted, Jain told TOI he had provided his explanation to the authority concerned.

Under the Prohibition of the Benami Property Transactions Act, all attachments have to be ratified by the adjudicating authority, which is headed by an official of the level of I-T commissioner.

I-T investigation directorate officials said the confirmation of the two provisional attachments by the adjudication authority will boost their confidence as they are still trying to overcome the glitches encountered while handling cases under the new law. The directorate can provisionally attach benami properties and confiscate them after the adjudication process. An offence under this Act attracts up to seven years imprisonment and fine which can extend up to 25 % of the market value of the property.

Since the Act was amended in November 2016, the I-T investigation directorate has probed 187 benami transactions, including those pertaining to illegal conversion of demonetised currency notes, in Mumbai and attached properties worth Rs 950 crore—120 immovable (land, flats) and 67 movable (cash, vehicles, jewellery, bank deposits and others). The department has has attached properties worth Rs 3,500 crore across the country.

