Tax authorities seize Mehul Choksi’s assets worth more than Rs 150 crore under Benami law

Fugitive diamond dealer Mehul Choksi. (File photo)

New Delhi: In a major move, Income Tax (IT) authorities took physical control of real estate worth more than Rs 150 crore belonging to Mehul Choksi, the fugitive diamond merchant and uncle of Nirav Modi, in under the Benami Transactions (Prohibition) Amendment Act (BTPA) which came into force on November 1, 2016 to curb the generation of black money through real estate transactions.

A person familiar with the matter said HEY: “On May 27, 2022, a team from the Benami unit traveled to Balwantnagar and Mundhegaon, Igatpuri to take possession of several plots of land held in the name of benamidar Nashik Multi Services SEZ Ltd, where M/s Geetanjali Gems is held as beneficial owner. Signs were placed at locations identified by the land surveyor in the presence of Tehsil officials and independent witnesses. Possession was taken over of a total of 52 parcels identified and confirmed during of the panchnama procedure.

In addition, the IT department confiscated other properties, including three office spaces in the Bandra Kurla complex in Mumbai.

Choksi who is wanted in the Rs 13,000 crore Punjab National Bank fraud case promoted Geetanjali and these benami assets are linked to him.

The main idea is to return the proceeds of crime to the bank through an auction, but the final decision rests with the board, the financial daily said citing a senior tax official.

Earlier, tax sleuths auctioned off some of the Benami properties of Choksi and Nirav Modi, and this is the first time the IT department has completed the confiscation of real estate under the Benami law.
Lawyer and former member of the Income Tax Appeals Tribunal (ITAT), Ashwani Taneja, told the publications: “Under the new Benami law, the asset forfeiture stage does not come that when the Appeals Tribunal has decided on his appeal and thereafter, the case must be heard again by the adjudicating authority.Now the Appeals Tribunal is not functional due to lack of quorum for 2 years. In cases where the parties whose assets have been seized have not preferred to lodge an appeal, an action for confiscation is initiated.

Interestingly, under the Prevention of Money Laundering Act, possession of property can be taken by ED immediately upon confirmation by the contracting authority under the PMLA.

Last year, Choksi-related properties were provisionally seized under the BTPA after an investigation by Mumbai tax authorities found the assets to be benami, with Choksi the sole beneficial owner.

As Choksi did not contest the said order in court within the time limit set by law, the properties were confiscated and physical possession was taken.

“Possession was taken after duly informing the AA that the assessee (in this case Choksi) had failed to exercise the legal remedy provided by law,” another official told the daily on condition of anonymity. .

In March, the Center told the Rajya Sabha that assets worth Rs 19,111.20 relating to fugitives Vijay Mallya, Nirav Modi and Mehul Choksi had been seized so far.

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