INCOME-TAX OFFICER Vs. MANGAL PD GUPTA

JUDGEMENT

(1.) The department is aggrieved of the order dated 20-3-1982 of the learned AAC.

(2.) The first point involved in this appeal relates to the taxability in the hands of the assessee of the investment in the house property which stands in the name of the assessees wife Smt. Ram Kumar Gupta. The house, which is situated in Mohalla Buxipur in Gorakhpur was purchased on 26-8-1977 from one Viney Bhushan for Rs. 20,000 excluding registration expenses from which were Rs. 2,500. The sale deed stands in the name of Smt. Ram Kumari Gupta. This house was reconstructed and the ground floor was completed in May 1978, whereas the first floor was constructed later. The case of the assessee was that the house did not belong to him but to his wife whose sources of investment consisted of the money which she received from father and other relatives on marriage, her personal savings out of the household and moneys received by her children on different festivals and other ceremonial occasions. However, the ITO was influenced by the following considerations on the basis of which he drew the inference that the assessee was the real owner and in possession of the house which was used for the purpose of the residence and business :

(3.) The assessee, being aggrieved, came up in appeal before the learned AAC. The assessee placed reliance on his own letter and affidavit and the letter and affidavit of his wife. It was pleaded that it was for the department to establish that the transaction was benami. The learned AAC upheld the assessees contention that the onus of proof lay on the department. He observed that since the ITO had chosen not to cross-examine the deponents on their affidavits there was a presumption that he was satisfied with their contents. Reliance was placed by him in this connection on the decision of the Supreme Court in Mehta Parikh & Co. v. CIT, 1956 30 ITR 181. The learned AAC also relied upon the fact that in her affidavit the assessee had stated having taken a loan of Rs. 20,000 from one Mahadeo Prasad and having entered into an agreement dated 5-6-1978 with Gupta & Co. He therefore, took the view that the ITO was not justified in treating the investment of Rs. 22,500 as the unexplained income of the assessee.