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of <h1>Income tax case: Rent income inclusion ruled, burden of proof on department, costs awarded.</h1> <h3>K.B. Sheikh Mohammad Naqi Versus Commissioner of Income Tax, Punjab.</h3> The Lahore High Court ruled in the case of Commissioner of Income Tax v. Sheikh Mohammad Sadiq that the rent income of the petitioner's wife should be ... - Question (1): Inclusion of Rs. 3,041 received by the petitioner's wife as rent was held legally justified. The Court applied sub-section (3) of Section 16 of the Income Tax Act, following In re Sardarni Narain Kaur and Others, and answered this question in the affirmative. Question (2): The finding that properties stood benami in the names of the petitioner's three sons was negatived. The Court held that sub-section (3) of Section 16 does not apply to adult sons and that the department must have 'proper material' to 'go behind the sales.' Quoting authority, 'the onus in such cases lies upon the department to show that the ostensible owner was not the real owner.' The Commissioner conceded no evidence of transfer by the assessee; his reliance on the sons' limited income and the assessee's admission of paying maintenance was insufficient. The Court emphasized that widespread benami practice alone cannot prejudice an ostensible owner, particularly in Mohammadan families where an individual may 'hold the property for himself and not for the family.' The second question was answered negatively; half costs awarded to the assessee.
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