Benami business finding upheld on evidence; protective assessment cancelled after income was attributed to the real owner.

Evidence of control, execution of books and contracts, insurance and overdraft arrangements, transfer of advances, and seized correspondence supported the Tribunal's finding that the business carried on in the name of U. G. Krishnaswami Naidu was in substance that of Ramaswami Naidu. That finding was treated as one of fact and was not open to interference in reference proceedings absent proof that it was unsupported by evidence or perverse. Once the business income was attributed to Ramaswami Naidu, the protective assessment on Krishnaswami Naidu could not stand, and its cancellation was justified.

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Issues: (i) Whether the business carried on in the name of U. G. Krishnaswami Naidu belonged in substance to Ramaswami Naidu for the assessment years in question. (ii) Whether the cancellation of the protective assessment made on U. G. Krishnaswami Naidu was justified in law.

Issue (i): Whether the business carried on in the name of U. G. Krishnaswami Naidu belonged in substance to Ramaswami Naidu for the assessment years in question.

Analysis: The surrounding circumstances, including the introduction of Krishnaswami Naidu as the ostensible operator, the role played by Ramaswami Naidu in signing books and contracts, his control over the arrangements for insurance and overdrafts, the transfer of advances, and the seized correspondence, established a close nexus between Ramaswami Naidu and the business. The Tribunal's inference that the business was carried on by Ramaswami Naidu in the name of Krishnaswami Naidu was supported by adequate material and was treated as a finding of fact.

Conclusion: The business was rightly held to belong to Ramaswami Naidu and not to Krishnaswami Naidu.

Issue (ii): Whether the cancellation of the protective assessment made on U. G. Krishnaswami Naidu was justified in law.

Analysis: Once the business income was held to be that of Ramaswami Naidu, the protective assessment against Krishnaswami Naidu could not survive. The challenge to the Tribunal's finding on the benami character of the business was not open on reference in the absence of any showing that the finding was unsupported by evidence or perverse.

Conclusion: The cancellation of the protective assessment was justified.

Final Conclusion: The reference concerning ownership of the business was answered for the Revenue, while the reference concerning the protective assessment was answered against the Revenue, leaving the Tribunal's substantive conclusion undisturbed.

Ratio Decidendi: A Tribunal's finding that a business is benami, when supported by evidence, is a finding of fact not open to interference in reference proceedings unless it is shown to be unsupported by evidence or perverse.

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