**Case Study: 3** Mr. Shaswat Mishra is a dynamic young professional who moved from India to Boston in 2019. Shaswat, who holds an Indian passport moved abroad for higher studies and research in the field of material sciences and advanced Nano technology. After completing his studies, he was offered a role, as a teaching assistant at the Stanford University, which he gratefully accepted. There he met Ms. Shobs Rachel, a research scholar in bio-mechanics who is a British resident. Both got married to each other in September, 2020 in the US. The family of Shaswat belongs to Bihar. Despite the fact that Shobs has never been to India, she was tempted by the Indian culture and traditions and wanted to settle in India. So, Shaswat purchased an apartment in Noida in the joint name of himself and Shobs, after around six months of their marriage. The payment was made through a debit entry to a non-resident account maintained by Shaswat. This apartment is their first owned immovable property. Dr. Rekha Mishra, who is the sister of Shaswat, is working as a medical professional in RIMS, Jaipur. Shaswat visited his sister on her birthday and finds the PG house where she was staying was not fully equipped and did not have the required facilities. Considering an investment perspective and the comfort for his sister, Shaswat bought a studio apartment in Jaipur by making payment of ₹25 Lakh, registered in the name of Rekha. The price of the apartment is equal to the fair market value. Shaswat purchased another house in Patna, his hometown in the name of his mother because after retirement he also wishes to settle in Patna. He finalized the home for 125 Lakh, due to mild recession whereas the fair market value of such house is ₹140 Lakh on the date of registration, but now the same has fallen to ₹130 Lakh. Shaswat also purchased 50,000 shares of a private company, Dynamic Medical Devices Private Limited (DMDPL), which was founded by one of his friends, and held the same in the name of Shobs. DMD PL, in addition to trading on medical devices, also performed medical IT development and it exported its latest medical coding software to one of its customers over the electronic media on 30th June, 2020 for which the invoice was raised on 5th July, 2020. During January, 2019, DMDPL had acquired medical devices from Switzerland for a value of EUR 1,000,000 under ·its EPCG license and payment was made. The goods were imported but kept in the bonded warehouse since the Bill of Entry was not made and therefore, DMDPL did not take delivery of the same within 6 months from the date of import/payment made. Once Shobs acquired the shares of DMD PL in January, 2020, she took over the operations of the Company as the Managing Director from that date. However, the goods continue to be retained in the bonded warehouse. In June, 2021, a show cause notice was sent to Shobs stating that there is a contravention of the provisions of FEMA and Shobs is liable for levy of penalty under the relevant regulations. Evaluate the following questions:
Sub-questions (8)
Evaluate and identify whether any of the below mentioned are Benami 2 transactions under the PBPT Act assuming
(A) Purchase of property by Rekha worth ₹80 Lakh by paying ₹70 Lakh through bank transfer and ₹10 Lakh in cash. The registration was done for ₹70 Lakh.
(B) Purchase of property by Shobs (paid for by DMDPL) holding it in fiduciary capacity.
(C) Purchase of property by Shaswat in his name by using money of his friend.
(D) Purchase of property by Shaswat in the name of his mother and himself.
What is the latest date by which DMDPL must realize the full value of the medical coding software exported by it through electronic mode?
(A) 5th April, 2021.
(B) 5th January, 2021.
(C) 30th March, 2021.
(D) 31st December, 2021
Whether the immovable property purchased by Shaswat in Noida, in the 2 joint name of himself and his wife is valid under PBPT Act, 2016?
(A) Valid, because the payment was made through a debit entry to the non-resident account of Shaswat.
(B) Valid, because the property is acquired jointly.
(C) Valid, since this is the only property, they own.
(D) Invalid, since it is a Benami transaction.
When evaluating the character of the transaction and the intention of the 2-person contributing the money to acquire a property, and identifying it is a Benami transaction or not, which of the following is not a relevant criterion:
(A) Motives goveming their actions for making the transaction.
(B) Relationship between the parties.
(C) The basis of the surrounding circumstances.
(D) The difference, if any, between the actual consideration and value at which the registration is made.
Assuming that Shaswat purchased the shares in the name of his wife out of 2 sale proceeds of the immovable property purchased by Shaswat in Patna and not held jointly with his mother, then whether shares can be termed as Benami Property?
(A) Yes.
(B) No.
(C) Partially yes, partially no.
(D) Need more information to conclude
Evaluate with reasons whether Shobs could be made liable for a contravention committed - by the erstwhile management of the DMDPL.
Rekha is of the view that Shobs has violated the requirement of FEMA by acquiring a property in India. Evaluate.
Which of the following persons may be considered as a Benamidar? Discuss with reasons. (a) Shaswat Mishra (b) Rekha Mishra (c) Mother of Shaswat (d) Husband of Rekha