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TMI Blog1981 (3) TMI 11X X X X Extracts X X X X X X X X Extracts X X X X ..... of valid and relevant material ? (iv) Whether the burden of proof regarding the benami character of the business of Gopal Agencies has been properly and legally discharged by the Department? (v) Whether, on the facts and in the circumstances of the case, especially in the context of the statement of Shri Jawaharlal and the affidavit of Gopaldas, the Tribunal was justified in holding that the business of Gopal Agencies was the benami business of the assessee-firm ? (vi) Whether, on the facts and in the circumstances of the case, the business of Gopal Agencies could have been at the most held to be the benami business of Jawaharlal in his individual capacity or as a partner of another firm, M/s. Jawaharlal Daryabuxmal, and not that of the assessee-firm ? " Although the applicant has formulated as many as six questions, it was stated by learned counsel for the assessee that only two questions are contemplated by the assessee. These are: " (i) Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the proviso to section 145(1) was rightly applied ? (ii) Whether, on the facts and in the circumstances of the case, the Tribunal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , Shri Choudhary, contended that the Tribunal erred in holding that the proviso to s. 145(1) of the I.T. Act was rightly applied by the ITO. According to the learned counsel the accounts maintained by the assessee were correct and income could be properly deduced therefrom. As such, according to him, the ITO had no jurisdiction to reject the book results and determine the income in some other manner. Paragraphs 4 and 5 of the Tribunal's order contain the necessary material for recording a finding that the nature of the account books maintained by the assessee was such that the income could not be properly determined by the ITO. In para. 4 the Tribunal in great detail reproduced the arguments of the assessee on the point. Thereafter, in para. 5 the Tribunal observed as follows: " We find from the assessee's explanation which was furnished before the ITO and the AAC from time to time that the plea of having maintained a day-to-day record of consumption of raw material and production of finished goods was never taken in the past. In fact the assessee's only contention was that complete quantitative details have been kept. The mere maintenance of quantitative details does not est ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... deduced from the method of accounting regularly adopted by the assessee. There was nothing special about this question of fact, and generally the only question of law that could possibly arise was whether there was any material for the finding." It is clear to us that no question of law could arise out of the Tribunal's order because there was sufficient material before the Appellate Tribunal for taking the view that the book results could not be accepted in view of the defects mentioned by the Tribunal and the proviso to s. 145(1) of the I.T. Act was applicable. This is a finding of fact and no question of law arises therefrom. Next question relates to the Tribunal's finding that the assessee carried on business benami in the name of M/s. Gopal Agencies and the income therefrom was, in fact, the income of the assessee. This finding resulted in an addition of Rs. 12,500 to the income of the assessee. A few facts which led the ITO, the AAC and finally the Bench of the Appellate Tribunal to reach this conclusion may be briefly stated. The flying squad of the Sales Tax Dept. conducted a raid at the business premises at 12, Siyaganj, Indore, which is the address of the assessee- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... premises of the assessee in the name of M/s. Gopal Agencies was the benami business of the assessee-firm. Learned counsel for the assessee, Shri Choudhary, contended that the circumstances listed above might raise a presumption that the business was the benami of Jawaharlal but this material could not constitute sufficient evidence to prove that the business in the name of M/s. Gopal Agencies was the benami business of the assessee. He relied on certain observations in CIT v. Daulat Ram Rawatmull [1973] 87 ITR 349, Kishinchand Chellaram v. CIT [1980] 125 ITR 713 (both of Supreme Court) and Prakash Narain v. CIT [1982] 134 ITR 364 (All). We have gone through these decisions. From time to time in several decisions their Lordships of the Supreme Court have made observations inviting the attention of the courts in respect of the jurisdiction under s. 256 of the I.T. Act. With regard to a finding of the Tribunal on the question of benami business, the following principles are well settled: (a) The burden of proof regarding benami is upon one who alleges benami. (b) To prove benami the most important point is to examine the source of consideration and along with that there are cert ..... X X X X Extracts X X X X X X X X Extracts X X X X
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