Benami ads leave property owners jittery
This could be a precursor to a clampdown on such properties
For scores of chartered accountants (CAs) and tax experts across the country, their phones did not stop ringing since Wednesday morning. It all started off with an advertisement by the income-tax( I-T) department in leading national dailies on Wednesday, sen si ti sing people about the pit falls of entering into ben ami property transaction.
“Many clients have expressed their concern and apprehensions around implementation of the Ben ami Transactions Act ,” said a Delhi-based CA, conceding he and his team have received at least a dozen-odd such enquiries in the course of the day. Similar was the case with many other tax experts.
Some experts said this could be a precursor to the government seeking more information from people about the ownership status of immovable properties .“The government may build a database of suspected ben ami properties before acting on them ,” said a tax consultant. The advertisement titled Keep Away from Ben ami Transactions talks about the pen al provisions if a person is caught purchasing or selling abe na mi property. Citing the provisions of the Ben ami Transactions( Prohibition) Amendment Act, 2016, the advertisement said any person who a bets and induces ben ami transaction is prosecutable and may face rigorous imprisonment up to seven years. While the concerned property maybe confiscated, a person indulging in such a transaction is liable to pay a fine up to 25 percent off air market value of the property, the advertisement added.
“The move is inline with the government’ s concerted efforts to clamp down on black money ,” said Riaz Thingna, director, Grant Thornton. Pavan Kumar Vi jay, MD, Corporate Professionals, agreed that the issue of ben ami transactions has gone live .“I expect the next step would be to solicit information about such transactions from the people ,” he added.
However the implementation of the Act may not be easy. “There is likely to be a legal pushback to defend and delay the implementation,” said a lawyer. Legal experts noted that the tax department has to follow the due process of law for the issue of notification against suspected benami properties. “The process of confiscation of such properties and the time taken to act against offenders could be time-consuming,” added another legal expert. Real estate and tax experts expect several benami property holders to transfer ownership of such properties back to their own name. This may not save them from the scrutiny by tax officers, but allow them to get their books in order, said experts.