'A', an individual, by a transaction, purchased a house in the name of his wife. Consideration of transaction was paid by 'A' out of his known sources. Government seized the house claiming it to be a benami property. Dec

According to Section 2 (8) of the Benami Transactions (Prohibition) Act, 1988 'Benami Property' means any property which is the subject matter of a benami transaction and also includes the proceeds from such property. As per Section 2 (9)(A) of the Benami Transactions (Prohibition) Act, 1988 "benami transaction" means-a transaction or an arrangement- where a property is transferred to, or is held by, a person, and the consideration for such property has been provided, or paid by, another person; and the property is held for the immediate or future benefit, direct or indirect, of the person who has provided the consideration, except when the property is held by- any person being an individual in the name of his spouse or in the name of any child of such individual and the consideration for such property has been provided or paid out of the known sources of the individual; In the present case transaction falls in the category of Section 2 (9)(A)(b)(iii) of the Benami Transactions (Prohibition) Act, 1988 and is an exception to what constitutes Benami Transaction. Therefore, the house purchased by A in the name of his wife known sources does not fall in the Benami Transaction. So the action of seizure of the house by the Government is not justified.