1980 (10) TMI 17 - HC - Wealth-tax

Summary

Issues Involved:
1. Whether the Tribunal's finding that the properties were purchased benami by the assessee was justified in law.
2. Whether the properties could be included in the total wealth of the assessee.

Issue-wise Detailed Analysis:

1. Tribunal's Finding on Benami Purchases:
The central issue in the income-tax references was whether the properties were purchased by the assessee benami. The Tribunal had concluded that the assessee purchased the properties in the names of his wife, his mother-in-law, and his father-in-law. This conclusion was based on circumstantial evidence, including the financial status and dependency of the in-laws on the assessee, and the fact that the assessee admitted to purchasing another property in his wife's name benami.

The court examined various precedents, emphasizing that the burden of proof lies on the party alleging benami. The source of the purchase money is the most crucial factor. The court found that the Tribunal's reliance on circumstantial evidence was flawed. The rejection of the in-laws' explanation about their funds did not automatically imply that the properties were purchased by the assessee. The Tribunal's conclusion lacked direct evidence and was based on misinterpretations and irrelevant considerations.

2. Inclusion in Total Wealth of the Assessee:
The wealth-tax reference questioned whether the properties could be included in the assessee's total wealth, assuming they were purchased benami. The court reiterated that the finding of benami was crucial. Since the Tribunal's finding on benami was not justified, the properties could not be included in the assessee's total wealth.

Legal Principles and Precedents:
- Burden of Proof: The onus to prove benami lies on the party alleging it. The source of the purchase money is the primary test.
- Evidence and Inference: Mere rejection of an explanation does not justify an inference of benami. There must be direct evidence or substantial circumstantial evidence.
- Judicial Findings: A finding of fact cannot be questioned unless it is without evidence or is perverse. The Tribunal's conclusion must be based on relevant and substantial evidence.

Conclusion:
The court concluded that the Tribunal's finding of benami was not supported by evidence and was based on irrelevant considerations and misinterpretations. Therefore, the properties could not be included in the assessee's total wealth. The questions were answered in the negative, in favor of the assessee, and against the department. The assessee was entitled to costs for each reference.