TaxTMI 
TaxTMI 
1985 (3) TMI 125
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....to have been provided for by the assessee by way of loan and, that this arrangement would continue till the repayment of the loan. The assessee has also produced a copy of the corporation receipt according to which the property stood in the name of the assessee's wife Smt. Vatsala. It was submitted that the income from this property should not be assessed in the hands of the assessee, since the acquisition was by means of a borrowal from the husband and not by way of a gift by the husband to the wife. The assessee submitted that the amount borrowed from him had been paid back during the year out of the loan received from the Canara Bank, to whom the property was mortgaged and let out. The building itself was demolished during the year in order to construct a new building out of advances received from the Canara Bank. According to the assessee, whatever be the position prior to January 1980, subsequent to January 1980, the income should not be included in his hands as the loan has been cleared. 2. During the assessment proceedings, the ITO has noted that the assessee while explaining the source for the acquisition of the property in the assessment year 1968-69 by his letter addre....
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....ed loan to the appellant, there is no case at all for assessing the income. However, on considering the facts arising in this case and after hearing the parties, the AAC confirmed the view taken by the ITO. 4. Not satisfied with the order passed by the AAC the assessee is in appeal before us. Before us, the learned counsel for the assessee submitted that the AAC was wrong in holding that the property bearing door No. 131, Usman Road, T-Nagar, Madras-17, belonged to the appellant and the assessment of income in the hands of the appellant was correct and was to be upheld. It was submitted that this conclusion is not based on evidence on record and cannot be supported. He further submitted that the authorities below were wrong in their view that the sum of Rs. 4,972 being the income from door No. 131, Usman Road, Madras-17, belonging to the appellant's wife was liable to be assessed in the hands of the appellant. The learned counsel for the assessee further submitted that the AAC was wrong in holding that even at the time of original investment, the property was meant to belong only to the appellant and consequently the assessment of income in the hands of the appellant was correct....
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....hose name the property stands. According to the appellant, the consideration of Rs. 48,000 paid for the purchase of the above property under document No. 2733 of 1967 dated 5-10-1967 had been given by the appellant by way of loan to his wife Smt. Vatsala. The appellant also produced an agreement dated 16-9-1970 entered into between himself and his wife under which the appellant was entitled to receive rent from the aforesaid property in lieu of interest as long as the loan was outstanding. In support of the claim, the appellant produced the corporation tax receipts, which were in the name of his wife and the correspondence that had passed between his wife and the Canara Bank, to whom the property had been mortgaged and let out. 6. According to the department although the property was purchased and stood in the name of Smt. Vatsala and the evidence produced by the appellant was sufficient to sustain the claim in a Court of law to prove that the property belonged to or was owned by his wife, it would not be sufficient to prove that the property was purchased by her. According to the authorities below nowhere in the income-tax and the wealth-tax return statements till the assessmen....
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....burden of proving that a transaction is benami and the owner is not the real owner always rests on the person asserting it to be so and this burden has to be strictly discharged by adducing legal evidence of a definite character which would either directly prove the fact of benami or establish circumstances unerringly and reasonably raising an inference of that fact. The essence of benami is the intention of the parties and not unoften, such intention is shrouded in a thick veil which cannot be easily pierced through. But such difficulties do not relieve the person asserting the transaction to be benami of the serious onus that rests on him, nor justify the acceptance of mere conjectures or surmises as a substitute for proof. It is not enough merely to show circumstances which might create suspicion, because the Court cannot decide on the basis of suspicion. It has to act on legal grounds established by evidence---Krishnanand Agnihotri v. State of MP AIR 1977 SC 796, Jaydayal Poddar v. Mst. Bibi Hazra AIR 1974 SC 171 and Raj Ballav Das v. Haripada Das AIR 1985 Cal. 2. 9. It is for the department to prove that a house standing in the name of the wife---Ramkinkar Banerji v. CIT [1....
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.... another person and the consideration so flowing for the transfer was not intended to be a gift in favour of the person in whose name the transfer is taken---Syed Abdul Khader v. Rami Reddy AIR 1979 SC 553. At the same time, where the husband purchased the property in the name of his wife with the intention to benefit her and to make her the owner of that property, subsequent change of intention of the husband would not divest the wife of the title acquired by her under the sale deed---Ammaponnammal v. Shanmugam Pillai AIR 1971 Mad. 370. 11. We have already set out the test laid down by the Supreme Court in the matter of determining the benami transaction. We have already seen from the facts of the present case that the property in question was purchased by the wife of the assessee by sale deed dated 5-10-1967 for a consideration of Rs. 48,000. This amount was said to be given as a loan by the assessee to his wife. There was an agreement between the husband and wife dated 16-9-1970, according to which the assessee was to receive the rent from the property purchased in lieu of interest payable by the assessee's wife on the sum of Rs. 48,000. This loan was repaid on 15-1-1980 by c....