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C.I.T. v. Smt. S. Devi - INCOME TAX REFERENCE No. 196 of 1991  RD-AH 571 (28 February 2005)
Income Tax Reference No.196 of 1991
Commissioner of Income Tax, Allahabad vs. Smt. Sadhna Devi, Varanasi.
Hon'ble R.K.Agrawal, J.
Hon'ble Prakash Krishna, J.
The Income Tax Appellate Tribunal, Allahabad has referred the following three questions of law under Section 256(2) of the Income Tax Act, 1961 (hereinafter referred to as "the Act") for opinion to this Court:-
"1.Whether on the facts and in the circumstances of the case, there was material before the Tribunal to hold that no proceedings have been taken in the case of assessee's husband?
2. Whether on the facts and in the circumstances of the case, the Tribunal was justified in holding the assessee as real owner without verifying the correctness of assessee's assertion about her husband's assessment, including the availability of time, available to the Department?
3. Whether on the facts and in the circumstances of the case, the A.T.A.T. was justified in holding that the assessee is the real owner of the property?"
The present Reference relates to the Assessment Year 1982-83.
Briefly stated the facts giving rise to the present Reference are as follows:
The respondent-assessee had filed return of her income for the Assessment Year 1982-83 in which the only source of income shown by her was income from house property. The total income from rent was shown at Rs. 33,000/- out of which a sum of Rs. 12,600/- was claimed as interest on borrowed money for the purposes of investment in the construction of house property. The Assessing Authority had asked the respondent-assessee to prove the nature and source of investment in the house property. After considering her explanation and evidence brought on record the Assessing Authority had held that the respondent is the benamidar of her husband- Lallan Prasad Singh who is the real owner and who had made the investment in the construction of the said house. It was held that the investment had to be considered in the hands of her husband and the assessment in the case of the present respondent was completed on protective basis. The claim of interest was also disallowed. Feeling aggrieved the respondent preferred an appeal before the Appellate Assistant Commissioner who came to the conclusion that the income of the respondent should be assessed as final and not on protective basis. The Revenue, feeling aggrieved preferred an appeal before the Tribunal. The Tribunal has upheld the order of the Appellate Assistant Commissioner on the ground that no material was brought on record to contradict the submissions of act which had been advanced by the learned Advocate of the respondent to the effect that the respondent's husband had not been served with any notice by the Department nor any assessment had been claimed in his case for the Assessment Years 1982-83 and 1983-84 and further the Department had not yet held that her husband is the owner of the property in question in the case of her husband.
We have heard Sri A.N.Mahajan, learned standing counsel for the Revenue and Sri K.Saksena, learned counsel for the respondent.
Learned standing counsel has submitted that as the respondent had been unable to prove the source of investment in construction of house property and further she was not aware of the investment, the Assessing Authority was justified in holding her to be benamidar of her husband and, therefore, making the assessment on protective basis. The submission is misconceived. It is well settled that the person who alleges that the particular property is benamidar of another person is to prove by cogent material and brought on record the material because the respondent is unable to explain the source of investment would not make the property as that belonged to another person, in the present case, namely, her husband.
The Income Tax Act takes care of treating the unexplained investment as the income of that person. As in the present case, we find that the Assessing Authority had failed to bring on record any material and evidence to establish that the property belonged to some other person as not to the respondent, the Tribunal was justified in upholding the order of the Appellate Assistant Commissioner directing for treating the assessment as final assessment of the respondent.
We, accordingly, answer all the questions referred to us in the affirmative, i.e., in favour of the assessee and against the Revenue. However, there shall be no order as to costs.
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