Dhaka, Mon, M 26 Deecember 2016 http://www w.thefinancialexpress-bd.com m/2016/12/25/57434/Benami--transactions-gaalore
Benaami trransacctions galoree M S Siiddiqui n Section 2 (c) ( of the traansfer of propperty Act as property off any kind, Property is defined in whether movable m or immovable, i tangible or intangible, and a includes any right orr interest in such s property.. The wordd 'Benami' has h its origin in Persian vocabulary v a it literallyy means 'prooperty without a and name'. Benami purch hase of propeerty is done in the name of a person who does noot pay the consideraation but meerely lends his name, whhile the real title t vests in another persson who actuually purchasees the propertty and is thee real owner. This is a traansaction or arrangemennt in respect of o a property where the owner of the property is not n aware off, or, who deenies knowleedge of, suchh ownershiip. In a benaami transactiion a propertty is transferrred to surroggate owner to t gain unduue advantagee. The benami trransactions are a made in order to circcumbent the land ceilingg laws, so thaat the real owners can c have morre landed prooperties thaan provided in i laws. Som me persons allso transfer propertiees in the nam me of any cloose relatives to evade taxxation and coonceal blackk money obtaained through corruption. c One O of the motives m for a benami deaal is often as much to keeep property out o of the reaach of other members off one's own extended e fam mily. The mootive for a beenami deal is often as much m to keep p property out o of the reaach of other members m off one's own extended e fam mily, as from officialdom. o There aree a few exceeptions as thiis applies to a benami traansaction enntered into byy any personn in the namee of his (a) sp pouse, (b) brrother or sistter, or (c) anny lineal asceendant or desscendant. Thhis also appllies in the caase of a persoon standing in i a fiduciaryy capacity foor the benefiit of anotherr person toowards whom m he stands in i such capaacity and inccludes a trusttee, executorr, partner, aggent, director of o a company or legal addviser, a depository or a participant as a an agent of o a depositoory under thee Depositoriees Act, 19966 and any othher person as may be notified by thee Governmennt for this purpose. Howeveer, if the connveyance is to t the wife or o child of thhe purchaser,, then the presumpttion under th he English laaw is the othher way rounnd, namely, that t the purchaser intendded to benefit thhe child or wife. w Persons having h the possession off black moneey take advaantage of bennami transactions by purchasinng properties in the nam mes of their nearest n relativves and suchh transactionns increase corruptioon in society.
Many countries have laws for prosecution and blocking generation and holding of black money in the form of benami properties, especially in real estate. In many countries, it provides that a benami property arising out of prohibited Benami transaction is liable to confiscation by the Government and such property shall vest absolutely in the Government without paying any compensation, prohibits right of the 'benamidar' to recover property held benami. The properties held benami are acquired by the Government or confiscated to indicate the deterrence of the legislation and if any person enters into a benami transaction in order to defeat the provisions of any law or to avoid payment of statutory dues or to avoid payment to creditors. The beneficial owner, benamidar and any other person who abets or induces any person to enter into such benami transaction, are also charged for committing a punishable offence. Benami transactions have been practised in the Sub-continent before the advent of the British. Though was not considered harmless, it was a legally recognised concept. Benami transactions were often used to resort to furthering illegal or questionable objects, including the evasion of taxes. These were sometimes also resorted in order to defeat creditors. Modern methods of record-keeping, initiated by the British, were dictated by the need for revenue. Tax on agricultural land, an important source of government revenues, required identification of those responsible for paying it. The record, updated to reflect changes of ownership, was and continues to be maintained by land registration department and National Board of Revenue (NBR). The British rulers had no intention to address the issue of benami transactions. The person shown on the records is responsible for paying land revenue or property tax, and is, consequently, presumed to be the owner, unless it can be proved to the contrary. Sections 81 and 82 of Trusts Act, 1882, as adapted by Bangladesh, give legislative recognition to the practice of benami transactions and but it is barred in the Land Reform Ordinance, 1982, Section 5 (1) of which states that no person shall purchase any immovable property for his own benefit in the name of any other person/persons. But Bangladesh has two unique laws. After the liberation, a law has passed to limit the ownership of land with a ceiling by the government. The main points of the Land Reform Policy of 1972 were as follows: (i) the ceiling of maximum land ownership was reduced again to 33.33 acres (100 bighas) from 125 acres (375 bighas1); (ii) surplus land was to be acquired by the government and distributed amongst landless peasants; (iii) new diluvia and accreted land would be acquired by the government and treated as khas (public state-owned) land; (iv) land owners holding less than 25 bighas or 8.33 acres were exempted from paying land revenue (tax). Subsequently, the Land Reforms Ordinance of 1984 was promulgated following a long struggle by the country's landless people's movement and was based on the recommendations of a specially formed committee, which emphasised the distribution of khas land among landless families. The main features of the 1984 reform were as follows: (i) the maximum land ceiling was reduced from 33.33 acres to 20 acres; (ii) "benami" transactions i.e. the purchase or transfer of land in the name of another person to conceal the actual possession of the land holding were prohibited. Unfortunately, the Income Tax law permits the haze transaction for purchase and sell of
properties. It does not ask for source of money but legalises the untaxed or illegal money for 10 per cent "penalty tax". The benami deals are widespread and are one of the main causes for proliferation of black money. Benami transactions are one of the most notorious sources of circulation and investment of black money. The 10 per cent tax is lower than the regular tax paid by the honest taxpayers. It gives opportunity of purchasing properties under name of any person. The law has apparently made the land reform act non-effective. Section-2 of the Bangladesh Transfer of Immovable Property (Temporary Provisions) Order, 1972 states that "In this Order, unless there is anything repugnant in the subject or context, 'transfer' includes transfer by sale, exchange, gift, heba, will, mortgage, lease, sub-lease or any other manner of transfer or any agreement for such transfer or change of management through a power of attorney or otherwise." The Transfer of Property Act 1882 allowed deals in the name of wife or unmarried daughter. We need a law prohibiting benami transition and also transfer by sale, exchange, gift, heba, will, mortgage, lease, sub-lease or any other manner of transfer or any agreement for such transfer or change of management through a power of attorney or otherwise. The writer is a Legal Economist.