Law: Income Tax Act (XI of 1922)

Section: 13

Income tax Act (XI of 1922)-----   ----- S. 13, proviso Money lending business Carried on in name of wife Benami nature of transactions Onus of proof.   It is settled law that the burden of establishing benami is on the party who alleges. Therefore the burden is on the Income tax Authorities to establish that a business carried on in the name of the assessee's wife was in fact the business of the assessee and that his wife was only a name lender :   Held, on the facts, that this burden had been discharged by the Income tax Authorities.   Raghava Reddi v. Commissioner of income tax (1956) 29 I T R 942 ref. JUDGMENT   NARASIMRAM J. This reference under section 66(2) of the Indian Income tax Act raises the questions   "(1) Whether, on the facts and in the circumstances of the case, there is any material to hold that the applicant is the owner of the money lending business carried on by Srimathi Chandramathi and whether the assessment as upheld by the Appellate Tribunal was legal? and   (2) On whom does the burden lie to establish the benami nature of the transaction and whether the burden has been discharged in this case?"   The facts relevant to these questions are these :   The assessee is one Kurella Pullayya, a businessman of Masulipatam, Krishna District. The assessments relate to assessment years 1943 44 to 1948 49. The assessments have been made by the Income tax Officer, Masulipatam Circle, under section 13, proviso, of the Indian Income tax Act in respect of the income relating to the business of money lending which the Income tax Officer found as belonging to him, though he carried on the said business in the name of his wife, Srimathi Chandramathi. The assessee contended that he had nothing to do with the said business, that it was his wife's own, that the income was hers and that she alone should be assessed. This contention was rejected by the Income tax Officer. On appeal, the Appellate Assistant Commissioner of Income tax confirmed the finding of the Income tax Officer and the assessment orders, with certain modifications. The Income tax Appellate Tribunal agreed with the Appellate…