DURGADUTTA SAROGI Vs. COMMR OF INCOME-TAX

JUDGEMENT

(1.) In this case the Income-tax Appellate Tribunal has submitted the following question for the opinion of the High Court: "Whether there are materials or legal evidence to justify the finding that the property of Mr. Peppe at Ranchi was purchased by the assessee In the benami of the ladies?"

(2.) The reference came up before the High Court on 5-2-1952. But after hearing arguments of learned counsel for both the parties the Bench was of opinion that the statement of the facts in the case was not sufficient for determining the question raised. The case was therefore referred back to the Tribunal under Section 66(4), Indian Income-tax Act for submitting supplementary statement of the case.

(3.) This case relates to assessment of Durga-dutt Sarawgi and Rekhabchand Sarawgi who are two Hindu undivided families. The two kartas on behalf of the respective joint families have been carrying on a partnership business under the name of Jokhiram Jagannath in which Rekhabchand Sarawgi has nine annas share and Burgadutr, Sarawgi has seven annas share. The case relates to the assessment year 1944-45, corresponding to accounting year 1999-2000 samvat. The dispute in this case is with respect to the ownership of a house property which was purchased by a sale deed on 10-11-1943 by three ladies, vis., Rekhab-chand's wife, Durgadutt's wife and the widow of Sheobhagwan. On behalf of the assessee it was explained that Rekhabchand's wife had five annas share, the widow of Sheobhagwan had five annas share and the wife of Durgadutt has six annas share. It was alleged on assessee's behalf that out of the total amount of consideration a sum of one lac was advanced by the partnership firm to the ladies for purchase of the house property. The three ladies managed to collect a sum of Rs. 1,30,095 out of the sale proceeds of their ornaments. The balance of Rs. 1,61,387 was borrowed by the three ladies from the Bengal Central Bank on security of the house property which they had purchased. The claim of the assessee was, therefore, that the house property belonged to the three ladies but this claim was disbelieved by the Tribunal who came to the finding that the property was actually purchased by the two Hindu undivided families cut of their own funds and partly by borrowing from the Bengal Central Bank. In effect, the finding of the Tribunal was that the purchase of the house property was made benami in the name of the three ladies.