COMMISSIONER OF INCOME TAX Vs. SOHAN SANKHLA

JUDGEMENT

(1.) THESE two applications under Section 256(2) of the Income-tax Act, 1961, which have been filed by the Commissioner of Income-tax, Jodhpur, arise in similar circumstances, raise identical questions and as such they are disposed of together by a common order.

(2.) DR. Sohan Sankhla is an assessee as an individual. He filed his returns of income for the assessment years 1973-74 and 1974-75. The Income-tax Officer found that the assessee had purchased immovable property for a sum of Rs. 60,000 in the name of his minor sons, Anil Kumar and Arun Kumar, during the accounting years relevant to the assessment years 1973-74 and 1974-75. According to the Income-tax Officer, the house property in question was purchased by DR. Sohan Sankhla himself in the name of his minor sons and so the income earned from the house property was added to the income shown by DR. Sankhla in his returns in respect of the aforesaid two assessment years. The order passed by the Income-tax Officer was affirmed on appeal by the Appellate Assistant Commissioner of Income-tax, Bikaner, by his order dated March 5, 1977, and he held that in fact DR. Sankhla had purchased the house property in question in the name of his minor sons from his own money and by taking loans from the Life Insurance Corporation, the State Insurance Department and from other persons.

(3.) AS a matter of fact, the case of the Department is just the contrary, as according to the Department, the assessee was the owner of the house property and the investment for purchasing the said property was made by the assessee, At this stage, we are not called upon to decide as to whether the Tribunal could have come to the conclusion at which it arrived on the basis of the material on record. But there is no doubt that the case of the Department from the beginning has been that the purchase of the house property was made by the assessee in disguise in the name of his minor sons. Thus, although the word " benami " has not been used specifically, there appears to be no doubt from a perusal of the assessment order passed by the Income-tax Officer as well as the order passed by the Appellate ASsistant Commissioner that both the aforesaid authorities were of the view that the house property in question was purchased by Dr. Sankhla "benami" in the name of his minor sons and that the real owner of the said house property was the assessee, while the minor sons were mere benamidars. The Tribunal, instead of examining the aforesaid pleas on merits, merely went on to assume that it was not the case of the Department that the transaction was "benami". We are of the view that the Tribunal should have arrived at a finding as to whether the transaction relating to the purchase of house property was "benami" or not, on the basis of the primary facts proved on the record and not merely on an assumption that it was not the case of the Department that the loans were bogus and the transaction was "benami ". It appears to us that the Tribunal has committed a grave error in making an assumption in the case without any basis and in misconceiving and misconstruing the case set up by the Department. There can be no doubt that, in the aforesaid circumstances, a question of law arises out of the order of the Tribunal, when the conclusion arrived at by it is influenced by the application of unfounded inferences (see Champaran Cane Concern v. State of Bihar, [1963] 49 1TR (SC) 152).