The SAFEMA Appellate Tribunal ruled that purchasing flats under third-party names using one's own funds constitutes a benami transaction. This interpretation relates to Section 2(9)(A) of the amended Benami Act.
Benami Transactions Involving Real Estate
The SAFEMA Appellate Tribunal has ruled that flats bought in the names of third parties, with the buyer's own self-funded consideration, are classified as benami transactions. This interpretation directly pertains to Section 2(9)(A) of the amended Benami Act, which covers situations where payment is made by one individual while the property is held in another's name.
This decision reinforces the strict enforcement of the Benami Act and clarifies the legal framework around property transactions. The tribunal established that the possession of the property being divorced from the ownership of the funds is a key characteristic of a benami transaction, thereby subjecting such transactions to scrutiny under the Act.
Practitioners must be aware of this ruling as it will significantly impact property purchases, especially in real estate dealings where ownership and funding arrangements are not straightforward. Legal advice should be sought to navigate potential benami implications in similar transaction scenarios.
Citations
- SAFEMA Appellate Tribunal (2026) [unreported]
