notification no. 99/2016 f. no. 149/144/2015 tpl part ii / g.s.r. 1004 e prohibition of benami property transactions rules 2016

[TO BE PUBLISHED IN THE GAZETTE OF INDIA, EXTRAORDINARY, PART–II, SECTION 3, SUB-SECTION (ii)] GOVERNMENT OF INDIA MINISTRY OF FINANCE (DEPARTMENT OF REVENUE) NOTIFICATION New Delhi, the 25th October, 2016. G.S.R. 1004(E).—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 authorised 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 Authorised Officer. (2) Where an order referred to in sub-rule (1) has been received by the Authorised 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 jurisdication 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 Authorised 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 nationalised 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 nationalised bank equivalent to the value of property in the name of Administrator, the authorised 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 authorised 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 nationalised 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 jewellery 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 nationalised 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