The Prohibition of Benami Property Transactions Rules, 2016[1]
In exercise of the powers conferred by section 68 of the
Prohibition of Benami Property Transactions Act, 1988 (45 of 1988), the Central
Government hereby makes the following rules, namely:—
1. Short title
and commencement
(1) These
rules may be called the Prohibition of Benami Property Transactions Rules,
2016.
(2) They
shall come into force on the 1st day of November, 2016.
2. Definitions
(1) In
these rules, unless the context otherwise requires,-
(a) "Act" means
the Prohibition of Benami Property Transactions Act, 1988 (45 of 1988);
(b) "Chapter"
means a Chapter of the Act;
(c) "Form" means
a Form appended to these rules; and
(d) "Section"
means a section of the Act.
(2) Words
and expressions used and not defined in these rules but defined in the Act, the
Indian Trusts Act, 1882 (2 of 1882), the Indian Succession Act, 1925 (39 of
1925), the Indian Partnership Act, 1932 (9 of 1932), the Income-tax Act, 1961
(43 of 1961), the Depositories Act, 1996 (22 of 1996), the Prevention of
Money-Laundering Act, 2002 (15 of 2003), the Limited Liability Partnership Act,
2008 (6 of 2009) and the Companies Act, 2013 (18 of 2013) or the rules made
under those Acts, shall have the same meanings respectively assigned to them in
those Acts and rules.
3. Determination of price
in certain cases
(1) For
the purposes of sub-clause (ii) of clause (16) of the section 2 of the Act, the
price shall be determined in the following manner, namely:-
(a) the price of unquoted
equity shares shall be the higher of,-
(I) its cost of
acquisition;
(II) the fair market value
of such equity shares determined, on the date of transaction, by a merchant
banker or an accountant as per the Discounted Free Cash Flow method; and
(III) the value, on the date of transaction, of such equity shares
as determined in the following manner, namely:-
The fair market value of unquoted
equity shares = (A + B - L) × (PV)/ (PE) where,
A = book value of all the assets
(other than bullion, jewellery, precious stone, artistic work, shares,
securities and immovable property) as reduced by,- (i) any amount of income-tax
paid, if any, less the amount of income-tax refund claimed, if any, and (ii)
any amount shown as asset including the unamortised amount of deferred
expenditure which does not represent the value of any asset;
B = the price that the bullion, jewellery,
precious stone, artistic work, shares, securities and immovable property would
ordinarily fetch on sale in the open market on the date of transaction;
L = book value of liabilities, but
not including the following amounts, namely:-
(i) the paid-up capital in respect of equity shares;
(ii) the amount set apart for payment of dividends on preference
shares and equity shares;
(iii) reserves and surplus, by whatever name called, even if the
resulting figure is negative, other than those set apart towards depreciation;
(iv) any amount representing provision for taxation, other than
amount of income-tax paid, if any, less the amount of income-tax claimed as
refund, if any, to the extent of the excess over the tax payable with reference
to the book profits in accordance with the law applicable thereto;
(v) any amount representing provisions made for meeting
liabilities, other than ascertained liabilities;
(vi) any amount representing contingent liabilities other than
arrears of dividends payable in respect of cumulative preference shares;
PE = total amount of paid up equity
share capital as shown in the balance-sheet;
PV = the paid up value of such
equity shares;
4. Furnishing of
Information
For the purpose of sub-section (2)
of section 21, the income-tax authority referred to in sub-section (1) of the section
285BA of Income-tax Act, 1961 (43 of 1961) or such other authority or agency
which is prescribed under sub-section (1) of section 285BA shall electronically
transmit a copy of statement received by it under sub-section (1) of section
285BA of that Act to the Initiating Officer or such authority or agency
authorized by the Initiating Officer on or before fifteen days from the end of
the month in which said statement is received.
5. Provisional attachment
For the purposes of sub-section (3)
of section 24, the Initiating Officer shall provisionally attach any property
in the manner provided in the Second Schedule of Income-tax Act, 1961 (43 of
1961).
6. Confiscation of
property under second proviso to sub-section (1) of section 27
(1) Where
an order of confiscation of property under sub-section (1) of section 27 has
been made, the Adjudicating Authority shall send a copy of the order to the
Authorized Officer.
(2) Where
an order referred to in sub-rule (1) has been received by the Authorized
Officer in respect of any immovable property, he shall,-
(i) forthwith issue notice
to the authority of the Central Government or a State Government, as case may
be, having jurisdiction for the purposes of registration of such immovable
property, intimating about the confiscation of the property;
(ii) arrange to place copy
of the notice at some conspicuous part of the immovable property for the
benefit of general public mentioning clearly therein, in English and in
vernacular language, that the property has been confiscated under the Act and
vests absolutely in the Central Government;
(iii) arrange to make a
proclamation for the confiscation of immovable property at some place on or
near such property by beat of drum or other customary mode.
(3) Where
an order referred to in sub-rule (1) has been received by the Authorized
Officer in respect of any movable property, he shall,-
(i) forthwith issue a
notice to the authority or person having the custody of such movable property
informing him about the confiscation of such property; or
(ii) sell the property, if
the property is liable to speedy and natural decay or the expenses for
maintenance is likely to exceed its value, with the leave of the concerned
Adjudicating Authority, and deposit the sale proceeds in the nearest Government
Treasury or branch of the State Bank of India or its subsidiaries or in any
nationalized bank in fixed deposit and retain the receipt thereof:
Provided that where the owner of the
property furnishes the fixed deposit receipt of State Bank of India or its
subsidiaries or a nationalized bank equivalent to the value of property in the
name of Administrator, the authorized officer may accept and retain such fixed
deposit receipt as security:
Provided further that where the
movable property is a mode of conveyance of any description, the authorized
officer, after obtaining its valuation report from the Motor Licensing
Authority or any other authority, as the case may be, may accept and retain the
fixed deposit receipt of State Bank of India or its subsidiaries or a
nationalized bank, equivalent to the value of the movable property as security
in the name of Administrator;
(iii) cause to deposit the property consisting of cash, Government
or other securities or bullion or jewelery or other valuables in a locker in
the name of the Administrator or in the form of fixed deposit, as the case may
be, in State Bank of India or its subsidiaries or in any nationalized bank and
retain the receipt thereof;
(iv) cause to get the
property in the form of shares, debentures, units of Mutual Fund or instruments
to be transferred in favour of Administrator;
(v) issue a direction to
the bank or financial institution, as the case may be, to transfer and credit
the money to the account of the Administrator, where the property is in the
form of money lying in a bank or a financial institution.
Explanation.- For the purposes of this rule, an
"Authorized Officer" means an Income Tax Officer who is authorized by
the Adjudicating Authority in this behalf.
7. Receipt of confiscated
property under sub-section (1) of section 28
The Administrator shall, at the time
of receiving the confiscated property, ensure proper identification of such
property with reference to its particulars mentioned in the order made under
sub-section (1) of section 27.
8. Management of
confiscated property under sub-section (1) of section 28
(1) Where
the property confiscated is of such a nature that its removal from the place of
attachment is impracticable or its removal involves expenditure out of
proportion to the value of the property, the Administrator shall arrange for
the proper maintenance and custody of the property at the place of its
attachment.
(2) If
the property confiscated consists of cash, Government or other securities,
bullion, jewellery or other valuables, the Administrator shall cause to deposit
them for safe custody in the nearest Government Treasury or a branch of the
Reserve Bank of India or the State Bank of India or its subsidiaries or in any
authorized bank.
(3) The
Administrator shall maintain a register containing the details in Form No. 1
annexed to these rules for recording entries in respect of moveable property,
such as cash, Government or other securities, bullion, jewellery or other
valuables.
(4) The
Administrator shall obtain a receipt from the Treasury or the bank, as the case
may be, against the deposit of moveable properties stated in sub-rule (2).
(5) The
Administrator shall maintain a register containing the details in Form No. 2
annexed to these rules for recording entries in respect of property other than
the properties referred to in sub-rule (2).
9. Disposal of
confiscated property under sub-section (3) of section 28
Where the Central Government directs
that the property vested in it under sub-section (3) of section 27 be disposed
of, then, the administrator shall arrange to dispose of the property in the
manner provided in the Second Schedule to the Income-tax Act, 1961(43 of 1961).
10. Appeals to the Appellate
Tribunal
(1) An
appeal to the Appellate Tribunal under sub-section (1) of section 46 of the Act
shall be filed in Form 3 annexed to these rules.
(2) At
the time of filing, every appeal shall be accompanied by a fee of ten thousand
rupees.
(3) The
appeal shall set forth concisely and under distinct head the grounds of
objection to the order appealed against and such grounds shall be numbered
consecutively; and shall specify the address of service at which notice or
other processes of the Appellate Tribunal may be served on the appellant and
the date on which the order appealed against was served on the appellant.
(4) Where
the appeal is preferred after the expiry of the period of forty-five days
referred to in sub-section (1) of section 46, it shall be accompanied by a
petition, in quadruplicate, duly verified and supported by the documents, if
any, relied upon by the appellant, showing cause as to how the appellant had
been prevented from preferring the appeal within the period of forty-five days.
FORM 1
[See rule 8(3)]
MANAGEMENT OF CONFISCATED PROPERTY REGISTER (MOVEABLE)
Order number:
Date of receipt of properties:
Description of properties (quantity,
amount, estimated value):
Name(s) and address(es) of the
benamidar and beneficial owner, if his identity is known:
Name and address of the Treasury or
bank where the properties are deposited for safe custody:
Date and time of deposit of
confiscated properties in the Treasury or bank:
Receipt number with date of the
receipt obtained from the Treasury or bank:
Remarks of the Administrator:
…………………………………….
(Signature of the Administrator)
…………………………………
Name of the Administrator
Date: ……………….
(Seal)
FORM 2
[See rule 8(5)]
MANAGEMENT OF CONFISCATED PROPERTY REGISTER (IMMOVEABLE)
Order Number:
Date of receipt of properties:
Description of properties:
(In case of land:- area, survey
number, plot number, location and complete address. In case of building: house
number, location and complete address)
Name(s) and address(es) of the
benamidar and beneficial owner, if his identity is known:
Remarks of the Administrator:
……………………………………
(Signature of the Administrator)
……………………….…………
Name of the Administrator
Date: …………….
(Seal)
FORM 3
[See rule 10(1)]
From__________________________________________________________________________
(Mention name and address of the appellant here).
To
The Registrar,
Appellate Tribunal
(Address)
Sir,
The above-named appellant, begs to prefer this appeal under
section 46 of the Prohibition of Benami Property Transactions Act, 1988 against
order Number ______________ dated _________ passed by the authority (address
of Adjudicating Authority) under the said Act on the following facts and
grounds.
FACTS
(Mention briefly the facts of the
case here. Enclose copy of the order [passed by the authority] and copies of
other relevant documents, if any.)
GROUNDS
(Mention here the grounds on which
appeal is preferred).
PRAYER
In the light of what is stated
above, the appellant prays for the following relief:-
RELIEF SOUGHT
(Specify the relief sought)
DECLARATION
The fee payable for this appeal as
mentioned in sub-rule (2) of rule 10 has been deposited in the form of demand
draft with the Registrar, Appellate Tribunal, …………….. (Address) ………………… vide
receipt number____________ dated __________.
……………………………….
(Signature of the Appellant)
………………………………
(Name of the Appellant)
VERIFICATION
I........................... the appellant, do hereby declare that
the facts stated above are true to the best of my information and belief.
Verified today the .................................... day of
...........................
………………………………..
(Signature of the Appellant)
………………………………
(Name of the Appellant)
List of documents:
Place: …………….
Date: ……………..
[1]. Vide GSR 1004(E), dated 25.10.2016,
published in the Gazette of India, Extraordinary, Pt. II, Sec 3(i), dt. 25.10.2016.
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