Benami share ownership cannot rest on unproved assertions, and inconsistent tax returns can support gift-tax treatment.

A finding that shares were held benami cannot rest on an unproved understanding or a self-serving statement alone; evidence is required, and conjecture or surmise cannot sustain such a conclusion. The assessee's wealth-tax return, which treated the shares as his own, was also a relevant and inconsistent earlier position that could not be ignored when assessing the nature of the holding. On that reasoning, the contrary Tribunal view was disapproved and the transfer was treated as falling within section 4(1)(a) of the Gift-tax Act, 1958.

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Issues: (i) Whether the Tribunal was justified in treating the assessee as only a benamidar and the real owners of the shares as his father, mother and brother. (ii) Whether the assessee's treatment of the shares as his own in the wealth-tax return could be ignored as a militating factor.

Issue (i): Whether the Tribunal was justified in treating the assessee as only a benamidar and the real owners of the shares as his father, mother and brother.

Analysis: The finding of benami purchase was held to be unsupported by material. The alleged understanding that the shares were purchased for relatives and were to be transferred at cost price rested only on the assessee's statement and on a letter not shown to have been proved by evidence. A self-serving statement by itself was held not to be proof, and the Tribunal's conclusion was treated as based on conjectures, surmises, and a misdirection in law.

Conclusion: The finding of benami ownership was not sustained and the issue was decided against the assessee.

Issue (ii): Whether the assessee's treatment of the shares as his own in the wealth-tax return could be ignored as a militating factor.

Analysis: The Court held that the wealth-tax return showed the shares as belonging to the assessee and represented the earliest opportunity to assert any benami or temporary holding case. The later plea before the gift-tax authorities was inconsistent with that return. Such contradictory positions could not be accepted, and the Tribunal was wrong in treating the wealth-tax disclosure as irrelevant.

Conclusion: The wealth-tax return did militate against the assessee and the issue was decided against the assessee.

Final Conclusion: The reference was answered in favour of the Revenue, the Tribunal's contrary findings were disapproved, and the transfer was held liable to be dealt with under section 4(1)(a) of the Gift-tax Act, 1958.

Ratio Decidendi: A finding of benami ownership cannot stand where it rests only on unproved assertions or a self-serving statement and not on evidence, and a party cannot rely on an inconsistent position taken in another return to displace the legal effect of the transaction.

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