1984 (4) TMI 48 - HC - Income Tax

Summary

Issues:
1. Whether the Tribunal was justified in deleting the addition of Rs. 48,479.
2. Whether the Tribunal's finding on the benamidar status of Shri Harish Chandra was correct.

Analysis:
The Commissioner of Income-tax moved an application under s. 256(2) of the I.T. Act, seeking a statement of case from the Tribunal regarding the deletion of an addition of Rs. 48,479 in the assessment of the assessee. The ITO had included this amount in the total income, alleging it was earned by Harish Chandra, the son of the assessee, as a benamidar. The AAC upheld this decision, but the Tribunal reversed it on the grounds that the Revenue failed to prove Harish Chandra's benamidar status. The Tribunal emphasized that Harish Chandra was of legal age and had used his own funds for the transactions in question. The Commissioner challenged this decision, but the Tribunal rejected the application, stating that the finding was a fact and not perverse. The High Court concurred, citing the Supreme Court's ruling that a finding of benami is a finding of fact. As the Tribunal's decision was not perverse or against the evidence, no legal question arose, leading to the dismissal of the application.

The primary issue revolved around the Tribunal's deletion of the addition of Rs. 48,479 in the assessee's income, alleging it was earned by Harish Chandra as a benamidar. The Tribunal's decision was based on the lack of evidence proving Harish Chandra's benamidar status and the fact that he used his own funds for the transactions. The Commissioner sought a statement of case, arguing that the Tribunal's finding was incorrect. However, the High Court held that the finding was a matter of fact, following the Supreme Court's precedent that a benami finding is factual, not legal. As the Tribunal's decision was not perverse or unsupported by evidence, the legal challenge was dismissed.

The second issue centered on whether Shri Harish Chandra was correctly determined to not be a benamidar of the assessee. The Tribunal's decision to delete the addition in question was based on the lack of substantiating evidence from the Revenue. The High Court emphasized that determining benami transactions is a factual matter, as established by the Supreme Court. The Court reiterated that the Tribunal's finding regarding Harish Chandra's status was a factual conclusion, not a legal question. As the Tribunal's decision was deemed factually sound, the challenge to this finding was dismissed by the High Court.