Estate Duty - Passing of benami property. - Income Tax - 1304/CBDT

INSTRUCTION NO. 1304/CBDT Dated: February 1, 1980 The Board have examined the question as to when a property standing 'benami' passes, i.e., on the death of the benamidar or on the death of the real owner. 2. The Board have been advised that the property standing in the name of a benamidar passes on the death of the benamidar who is the ostensible owner. The ostensible owner has certain powers of disposition in regard to property standing in his name, though he may not be the real owner of the property. Hence, such property would be includible under section 6 of the Estate Duty Act, 1953, on the death of the ostensible owner. This view is supported by the decision of the Punjab and Haryana High Court in the case of Controller of Estate Duty Vs. M. L. Manchanda (93 ITR 173). 3. The Board have also been advised that the property standing in the name of a benamidar will also be held to pass on the death of the real owner in terms of section 5 of the Estate Duty Act. This view is supported by the Full Bench of the Allahabad High Court in the case of O.S. Chawala Vs. C.E.D. (90 ITR 68).