CHIMANLAL UMAJI Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THIS order shall also dispose of Miscellaneous Civil Cases Nos. 219, 220, 221, 222, 237, 238 and 239, all of 1976. These are all applications made by the assessee under Section 256(2) of the I.T. Act, 1961,

(2.) FOR the assessment years 1961-62 to 1968-69, the assessee was assessed as an individual. The facts, briefly stated, are that the assessee was previously a partner of the firm, M/s. Chimanlal Umaji & Sons. This firm consisted of the assessee and his two major sons. His minor son, Gulabchand, was admitted to the benefits of the partnership. According to the case of the assessee, this firm was dissolved in the previous year corresponding to the assessment year 1961-62 and a new firm, by name M/s. Gulabchand Chimanlal was constituted. There were three partners in this firm, namely, Hemchand Tarachand, Pratapchand Laxmichand and Smt. Laxmiben. Laxmiben is the wife of the assessee, Chimanlal. Minor Gulabchand was also admitted to the benefits of the partnership. The first two partners are outsiders. The firm applied for registration which was granted and the firm was held to be genuine. The proceedings relating to the registration of the firm terminated by order of the Tribunal dated 7th February, 1970. The Tribunal in that order did not go into the question whether Laxmiben was merely a benamidar for the assessee. The assessee in his returns did not show any income as partner of the firm, Gulabchand Chimanlal. The assessments were, however, re-opened under Section 147 of the Act on the finding that Laxmiben was merely a benamidar for the assessee in the firm of Gulabchand Chimanlal. This was the question which was raised before the ITO, the AAC and the Tribunal. All these authorities held against the assessee. The concurrent finding of all these authorities is that Laxmiben was merely a benamidar for the assessee. In deciding this question, the Tribunal referred to the arguments of both the parties and the relevant material on the said question and observed as follows :

(3.) IN Sree Meenakshi Mills Ltd. v. CIT [1957] 31 ITR 28, the Supreme Court held that an inference from the facts of a case that a transaction is a benami transaction does not involve the application of any principle of law to the facts established in the case and is a pure question of fact which cannot be made the subject of reference under the I.T. Act. It is true that there is no direct evidence that Laxmiben was a benamidar for the assessee; but direct evidence in such cases is impossible unless the parties themselves admit the benami character of the transaction. The finding that Laxmiben was inducted as a benamidar for the assessee is a finding of fact even though it is a finding based on inferences drawn from other facts. IN Meenakshi Mills' case [1957] 31 ITR 28, the Supreme Court observed that "when the finding is one of fact, the fact that it is itself an inference from other basic facts will not alter its character as one of fact." IN Rai Bahadur Mohan Singh Oberoi v. CIT [1973] 88 ITR 53, the Supreme Court again observed that the finding recorded by the Tribunal on the point whether a purchase was made benami or not is one of fact and that such a finding based upon some evidence would have to be accepted by the High Court. Having regard to the facts and circumstances of the case, it cannot be said that the finding reached by the Tribunal in the instant case is such which no reasonable Tribunal would have reached or that the finding is perverse or is based on no evidence. IN our opinion, as the finding reached by the Tribunal is a pure finding of fact based on evidence, no question of law arises and the Tribunal cannot be directed to state a case and refer that question.