Benami ownership burden requires direct or circumstantial proof; mere disbelief is insufficient and claim failed, while unpaid commission deductions are disallowed.

The text addresses two tax issues: first, whether the revenue proved that the assessee was beneficial owner of half the Sarup Nagar property. The principle applied is that where property is in an ostensible owner's name, the revenue must prove benami ownership by direct or circumstantial evidence; mere disbelief of the ostensible owner's explanation is insufficient, and on the facts the finding of half ownership was not sustained. Second, whether a 25% commission claimed as a deduction is allowable where the commission calculated on additional profits assessed by the officer was not actually paid; deduction requires actual payment, so unpaid additional commission is disallowed.

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Issues: (i) Whether there was sufficient material for the Tribunal to find that half of the purchase price of the Sarup Nagar house was contributed by the assessee thereby making half of its income assessable to the assessee; (ii) Whether 25% of net profits payable as commission to an employee should be allowed as a deduction under Section 10(2)(x) or 10(2)(xv) of the Income-tax Act on the basis of profits determined by the Income-tax Officer when the actual payment was computed on book profits.

Issue (i): Whether material supported finding that assessor contributed half of the purchase price and was beneficial owner of half the income.

Analysis: The property stood in the name of the ostensible owner and part of the purchase consideration was conclusively shown to have been provided by her. The burden to prove that the ostensible owner was a mere benamidar lay on the revenue. The appellate finding rested on rejection of the ostensible owner's explanation without adducing supporting facts or circumstantial evidence from which a reasonable inference of the assessee's contribution could be drawn. Prior authority establishes that mere disbelief of an explanation, absent supporting circumstances, does not constitute positive proof of the revenue's case.

Conclusion: There was no material to justify the finding that half of the purchase price was contributed by the assessee; the finding that half the income was assessable to the assessee is not sustained.

Issue (ii): Whether the deduction for 25% commission to the employee can be computed on amounts added by the Income-tax Officer when the assessee had not actually paid that additional amount to the employee.

Analysis: Deductibility under the cited provisions requires amounts actually expended by the assessee. The assessee did not establish payment of the commission calculated on the additional profits determined by the Income-tax Officer; the claim was that liability to pay would arise only in future. A deduction cannot be allowed for amounts not actually paid.

Conclusion: The 25% commission is deductible only to the extent actually paid; no deduction is allowable in respect of the additional amount not paid.

Final Conclusion: One issue is decided in favour of the assessee (no material to assess half the Sarup Nagar income to the assessee) and the other against the assessee (no deduction for unpaid commission); the reference is answered accordingly.

Ratio Decidendi: Where property stands in the name of an ostensible owner, the revenue bears the burden of proving benami ownership by direct or circumstantial evidence and mere rejection of the ostensible owner's explanation, without supporting facts, cannot be treated as proof; likewise, statutory deduction for payments requires actual payment by the assessee to qualify.

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