Book entries and benami ownership: interest payments failed, but property income could not be taxed without proof of benami title.

Mere book entries showing interest payable to the assessee's wife did not, without title documents or other supporting evidence, establish a real liability; the taxing authority could treat those amounts as not genuine, and they were included in assessable income. By contrast, where property stood in the wife's name, the burden lay on the Revenue to prove that she was only a benamidar before taxing the income as the assessee's own; that burden was not discharged, so the property income was excluded from the assessee's assessable income. The discussion therefore affirms that book entries alone are insufficient to prove liability, while benami ownership must be proved by the Revenue.

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Issues: (i) whether interest amounts shown in the assessee's books as payable to his wife could be included in the assessable income where the claim rested only on book entries and no supporting evidence established a real liability; (ii) whether income from property standing in the wife's name could be assessed as the assessee's income without proof that the wife was only a benamidar.

Issue (i): whether interest amounts shown in the assessee's books as payable to his wife could be included in the assessable income where the claim rested only on book entries and no supporting evidence established a real liability.

Analysis: The entries in the assessee's books, standing by themselves, were not proof in his favour. In the absence of title documents, affidavits, or other evidence showing that the wife was truly a creditor, the taxing authority was entitled to treat the alleged interest payments as not genuine. The earlier treatment of similar items in assessment proceedings could also be considered in deciding whether the claimed payments were real.

Conclusion: The interest items were rightly included in the assessee's assessable income.

Issue (ii): whether income from property standing in the wife's name could be assessed as the assessee's income without proof that the wife was only a benamidar.

Analysis: Where the documents of title stood in the wife's name, the burden lay on the Department to show that she was not the real owner and that the property was benami for the assessee. On the materials before the Court, that burden was not discharged. The ownership standing in the wife's name therefore had to be accepted for tax purposes.

Conclusion: The property income was not taxable as the assessee's income and had to be excluded from his assessable income.

Final Conclusion: The reference was answered by sustaining the assessment of the interest items and excluding the property income standing in the wife's name, leaving the assessee only partly successful.

Ratio Decidendi: Mere book entries do not establish a genuine liability in favour of the assessee, while title standing in another's name shifts the burden to the Revenue to prove benami ownership before taxing the income as the assessee's.

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