9911796707
TMI Blog1997 (7) TMI 75X X X X Extracts X X X X X X X X Extracts X X X X ..... ich the previous year ended on 31st March, 1973 the assessee, Vijay Bahadur Singh filed his return of income in the status of an individual from two sources, viz., (i) salary income as an employee of M/s Friends Automobiles, a partnership concern in which his wife Smt. Durgawati Singh was a partner and (ii) income from a proprietary business known as Sanjay Trading Corporation which held an agency from M/s Super Speed (P) Ltd. for purchase and sale of its product. Smt. Durgawati Singh, the wife of assessee, had set up her proprietary business, M/s Friends Automobiles, on 8th April, 1970 as dealer of Suvega Motorcycles, manufactured by M/s Moped India Ltd., Coimbatore. The capital invested by her was Rs. 4,000 only which she had received as gift from her father. The books of account for the first time were closed on 31st March, 1971 but return of income was filed, nor any assessment was made. However, for the asst. yr. 1972-73 an assessment was completed in her hands on an income of Rs. 28,767 as the proprietor of M/s Friends Automobiles. In the previous year relevant to the asst. yr. 1973-74 which is in dispute, the said business continued as a proprietary business upto May, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... benamidar of the assessee as held by the Tribunal. 4. We have heard learned counsel for the parties. The only submission urged by the learned counsel for the assessee was that the findings recorded by the Tribunal and other tax authorities that the wife of the assessee was benamidar for him, were vitiated in law, inasmuch as the Revenue had not produced any cogent evidence in support of its case on the basis of which any such finding could have been recorded. In continuation of that contention it was urged that the Revenue had failed to discharge its burden that the apparent was not real and under these circumstances there was no justification to bring to tax the amount in dispute in the hands of the assessee. 5. We have considered these submissions carefully. It may be observed that the agency agreement with the manufacturer of Suvega Motorcycles viz., M/s Mopeds India (P) Ltd. was signed by the assessee. There is no dispute on this factual position. Probe into the matter about the ownership of the business in the name of Friends Automobiles came to be made for the first time in the course of the assessment proceedings in the case of assessee's wife in the asst. yr. 1973-74 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... receipt of your letter C. No. 120-D dt. 28th Oct., 1975 and would like to inform you that the dealership agreement referred to in our letter was signed by Mr. V. Singh (Vijay Singh) for and on behalf of the proprietor and witnessed by Mr. A.N. Singh, s/o Ram Nadan Singh, Parsipur, Rameshwar, Varanasi (manager of the company). We do not have the details of the proprietor in our records and we have not received any intimation regarding the change of constitution of the firm." We have already observed that the agreement with the Principals was signed by the assessee. On whose behalf that agreement was signed, if not for himself, the assessee or his wife placed no material on record before the tax authorities. 7. Learned counsel for the assessee, however, placed reliance on a certificate dt. 23rd Feb., 1970, a copy of which is contained in annexure 6 to the statement of the case submitted by the Tribunal, to this Court. The said certificate is titled "To whom it may concern". The certificate recites inter alia, that Sri Vijay Bahadur Singh (the assessee in this reference), our senior representative, is fully authorised to represent ourselves with Government Department, Semi Gover ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e reply dt. 18th Nov., 1975 sent by M/s Mopeds India (P) Ltd. : "A perusal of the above letter shows that it was the assessee only who was dealing with the Principals on behalf of the benami concern of M/s Friends Automobiles and that the Principals do not know the details of the alleged proprietor who happens to be the wife of the assessee..., the agreement with the Mopeds India Ltd., also does not indicate the name of the proprietor and the said agreement also had not been signed by the lady though she is alleged to be the proprietor of the Friends Automobile." 8. With regard to the investment in the business, it has come on record that the security deposit amounting to Rs. 20,000 made on 16th March, 1971 for taking the agency was out of the loan which was arranged by the assessee on the strength of his friendship. Further the assessee had set up another identical business under the name "Sanjay Trading Corporation" the capital in which, was invested by withdrawing funds from M/s Friends Automobiles. The connection between the two concerns was too intimate, which adequately suggested that the affairs of the two businesses were being managed by a single individual, namely, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te our repeated questioning the learned counsel for the assessee could not refer to us any material which may go to establish that Smt. Durgawati Singh, wife of the assessee, was in reality the proprietor of the business M/s Friends Automobile. The contention that the Revenue has failed to discharge its onus to prove the benami character of the business on the facts of the case, cannot be accepted. The law does not prescribe any quantitative test to find out whether the onus in a particular case has been discharged or not. It all depends on the facts and circumstances of each case. Again in some cases the onus may be heavy whereas, in other cases it may be nominal. In certain circumstances, the onus can shift from time to time. In a case of benami transaction where an ostensible owner is not the real owner, the Court or authority concerned has to apply its mind to the various material and the evidence available in the case and then to reach a conclusion objectively as to whether it is a case of benami or not. We have already referred to the circumstances which have weighed with the Tribunal and the other authorities in arriving at their findings. Each one of the circumstances of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a proprietory concern. The stock which was in existence as on the date of change over, was taken over by the firm. 11. The learned counsel for the assessee was unable to say that the capital which had been invested in the partnership business in the name of the wife of the assessee had not come out of the business M/s Friends Automobile when it was a proprietary concern. Further, the assessee himself looked after the affairs of the partnership business though allegedly as an employee of the firm. In CIT vs. A. Abdul Rahim Co. (1965) 55 ITR 651 (SC) : TC 33R.1327, the Supreme Court has observed as under : "... If any partner is only a benamidar for another, it can only mean that he is accountable to the real owner for the profits earned by him from and out of the partnership. Therefore, a benamidar is a mere trustee of the real owner and he has no beneficial interest in the property or the business the real owner. But in law, just as in the case of a trustee, he can also enter into a partnership with others. ...If a benamidar possesses the legal character to enter into a partnership with another, the fact that he is accountable for his profits to, and has the right to be ..... X X X X Extracts X X X X X X X X Extracts X X X X
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