COMMISSIONER OF INCOME TAX Vs. K MAHIM UDMA

JUDGEMENT

(1.) Heard.

(2.) ALL the I.T. Rs. are disposed of by this common judgment as the dispute is common. It relates to the levy of tax on certain incomes from house property. The assessee was assessed to tax under the z (hereinafter referred to as 'the Act'). assessing officer was of the view that the assessee derived property income from the building let out on rent treating the income to be from asset owned by the assessee. The assessing officer held that the assessee had purchased a property for consideration of Rs. 80,000 in the names of Shri Abdul Rahiman, Shri K. Abdulla Kunhi and Shri K. P. Abdulla. After purchasing the property in their names, the assessee constructed a compound wall at an estimated cost of Rs. 40,000. The assessee took the stand that he had nothing to do with either the purchase of the property or construction of compound wall. This plea was not accepted. A sum of Rs. 40,000 was added to the income of the assessee as income from undisclosed sources for the assessment year 1972-73 relating to investment in construction of boundary wall. The rental income was added and tax was levied for rest of the years involved, that is; 1973-74, 1976-77 to 1979-80 and 1981-82 to 1983-84. So far as the assessment year 1972-73 is concerned, the Tribunal, Cochin Bench, observed that the revenue have failed to establish that the property in question belonged to the assessee, disbelieving the stand of benami purchase as taken by the revenue. In view of the finding recorded in the assessment year 1972-73, in subsequent periods the rental income included in the assessable income of the assessee was directed to be deleted. On the basis of the direction given by this Court in several original petitions under section 256(2) of the Act, the following common question has been referred for opinion :

(3.) THE conclusions arrived at by the Tribunal are factual. It kept in mind the principles relating to benami nature of transaction, and has recorded finding to the effect that the same was not established. THE decision whether benami transaction was involved is one of facts. THE burden of showing that a particular 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 facts 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 and 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.- (See Krishnanand Agnihotri v. State of M.P., AIR 1977 SC 796, Jayadayal Poddar v. Mst. Bibi Hazra, 1974 AIR(SC) 171). No question of law arises unless the conclusions are perverse and based on surmises and conjectures. THE case at hand does not belong to that category. THE question referred to is answered in the affirmative, in favour of the assessee and against the revenue.