1981 (10) TMI 57 - AT - Income Tax

Summary

Issues Involved:
1. Addition of Rs. 32,281 representing the value of Flat No. 85.
2. Determination of whether the deceased's wife was a benamidar for Flat No. 85.
3. Inclusion of the outstanding rent of Rs. 6,625 in the deceased's estate.

Issue-wise Detailed Analysis:

1. Addition of Rs. 32,281 Representing the Value of Flat No. 85:
The Assistant Controller added Rs. 32,281 to the deceased's estate, asserting that the deceased was the actual owner of Flat No. 85, with his wife acting as a benamidar. The Tribunal examined the records and found no concrete evidence to support the claim that the wife was a benamidar. The deceased's will stated that he had no interest in properties gifted to his wife, which contradicted the revenue's stance. The Tribunal concluded that the value of Flat No. 85 should not be added to the deceased's estate.

2. Determination of Whether the Deceased's Wife was a Benamidar for Flat No. 85:
The Tribunal emphasized that it is settled law that the burden of proving a benami transaction lies on the party alleging it. The revenue failed to provide sufficient evidence to prove that the deceased's wife was a benamidar. The Tribunal noted that the rental income was shown in the deceased's assessments, but this alone did not prove the benami nature of the transaction. The Tribunal held that the deceased was not the real owner of Flat No. 85, and his wife was not his benamidar.

3. Inclusion of the Outstanding Rent of Rs. 6,625 in the Deceased's Estate:
The Tribunal found that the revenue did not adequately prove that the outstanding rent should be included in the deceased's estate. The wife's will and the fact that tenants paid rent to her supported the conclusion that she was the actual owner. The Tribunal ruled that the outstanding rent should not be included in the deceased's estate.

Separate Judgments Delivered by the Judges:

Per Shri K.S. Vishwanathan, Accountant Member:
Shri K.S. Vishwanathan disagreed with the majority opinion. He argued that the purchase consideration came from the deceased, the asset was shown in the deceased's balance sheet, and the rent was also shown as an asset. He believed these facts were sufficient to prove the department's case. He cited legal precedents supporting the presumption of benami transactions when the property is in the wife's name but purchased by the husband. He concluded that the property should be included in the deceased's estate.

Per Shri B.B. Palekar, President:
Shri B.B. Palekar was called to resolve the difference of opinion. He noted that the department had to prove the benami nature of the transaction. He reviewed the facts and found that several circumstances could support either the benami claim or the wife's ownership. He emphasized that the balance sheets prepared by the deceased were not conclusive evidence of beneficial ownership. He concluded that the department had not succeeded in proving that the property was benami and ruled in favor of excluding the property and rent from the deceased's estate.

Conclusion:
The Tribunal ultimately dismissed the revenue's appeal, holding that the deceased was not the real owner of Flat No. 85, nor was his wife a benamidar. Consequently, the value of the flat and the outstanding rent were not includible in the deceased's estate.