1961 (7) TMI 80 - HC - Income Tax

Summary

Issues:
1. Ownership of money-lending business by the assessee's wife
2. Burden of proof in establishing benami transaction

Ownership of Money-Lending Business:
The case involved determining the ownership of a money-lending business carried out by the assessee's wife. The Income-tax Officer assessed the income as belonging to the assessee, despite the business being in the wife's name. The Appellate Tribunal upheld this assessment. The Tribunal found that the nucleus of the business funds belonged to the assessee, based on detailed analysis of various transactions and evidence. The Tribunal also noted that the nature and scale of the business indicated it could not have been solely managed by the wife. The assessee's contentions regarding the origin and growth of the business funds were refuted based on specific items and their history, leading to the conclusion that the business was actually owned and operated by the assessee.

Burden of Proof in Benami Transaction:
The second issue revolved around the burden of proof in establishing a benami transaction. The burden lies on the party alleging the benami nature of the transaction, in this case, the income-tax authorities. The authorities successfully discharged this burden by presenting substantial evidence and information. The court cited a previous ruling emphasizing that the burden of proving income sources lies with the assessee, who is in a better position to know the details. In this case, the material presented by the income-tax authorities, including information provided by the assessee himself, supported the conclusion that the business in the wife's name was, in fact, owned and controlled by the assessee. The court found no other points raised before them and ruled in favor of the income-tax authorities, upholding the assessment.

In conclusion, the judgment determined that the money-lending business was owned by the assessee, despite being operated in his wife's name. The burden of proof in establishing the benami nature of the transaction was successfully discharged by the income-tax authorities, leading to the affirmation of the assessment. The court ordered the applicant to pay the respondent's costs.