1982 (3) TMI 135 - AT - Wealth-tax

Summary

Issues:
1. Inclusion of the value of a house in the net wealth of the assessee for assessment years 1970-71 to 1972-73.
2. Ownership of the house situated at Jhinjhana Road, Shamli, in the name of the assessee's wife.
3. Valuation of the house for wealth tax assessment purposes.

Detailed Analysis:
1. The Wealth Tax Officer (WTO) included the value of a house at Jhinjhana Road, Shamli, in the net wealth of the assessee based on the belief that the assessee was the real owner and his wife was a name-lender. The WTO concluded that the investment in the house was made by the assessee, not his wife. The Appellate Assistant Commissioner (AAC) upheld the inclusion of the house's value but reduced the valuation from Rs. 1 lakh to Rs. 81,000 for each year. The assessee appealed against this decision.

2. The main contention revolved around the ownership of the house. The assessee argued that the investment in the house was made by his wife, Smt. Lahar Kaur, and not by him. The burden of proof regarding benami ownership was discussed, emphasizing that the burden lies on the party alleging benami and that sufficient evidence must be presented to establish the same. The assessee cited a decision by the Allahabad High Court in support of his claim.

3. The Income Tax Appellate Tribunal (ITAT) analyzed the evidence and contentions presented. They found that there was no concrete evidence to support the claim that the house was held benami by the assessee in his wife's name. The ITAT referred to legal principles regarding benami transactions and emphasized the importance of proving the actual source of funds for the purchase. Since no substantial evidence was provided to establish benami ownership, the ITAT ruled in favor of the assessee, deleting the inclusion of the house's value in the net wealth calculation for the relevant assessment years.

In conclusion, the ITAT allowed all three appeals filed by the assessee, ruling that there was insufficient evidence to support the claim that the house was held benami by the assessee in his wife's name. The burden of proof regarding benami ownership was not met, leading to the exclusion of the house's value from the net wealth calculation.