Law:

Section:

section 256, read with section 27(i), of the income-tax act, 1961-reference-question of law-assessee, an individual, purchased immovable property in the name of his minor sons-ito added income from said property to assessee's income and aac confirmed ito's order on ground that assessee had purchased said property 'benami' in name of minor sons from his own money and by taking loans from life insurance corporation, state insurance department and from other persons-tribunal did not arrive at finding whether impugned transaction was 'benami' or not on basis of primary facts proved on record but merely on assumption that it was not the case of department that loans were bogus, it set aside ito's order-whether any question of law arose from order of tribunal-held, yes Facts The assessee, an individual, purchased immovable property in the name of his minor sons. The ITO added the income earned from the said property to the income returned by the assessee. On appeal, the AAC confirmed the ITO's order on the ground that the assessee had purchased the said property 'benami' in the name of his minor sons from his own money and by taking loans from the Life Insurance Corporation, the State Insurance Department and from other persons. On second appeal, the Tribunal held: (i ) that the property in question was purchased by the minor sons of the assessee after taking loans from different persons and that it was not the case of the department that the loans were bogus; (ii ) that there was no material on record to show that in reality the assessee was the owner of the property in question and investment made in the purchase of the said property was made by him; (iii) that the assessee and his wife helped their minor sons in purchasing the said property; and (iv) that, consequently, income arising out of the said property could not be assessed in the hands of the assessee. The Tribunal also rejected the department's application under section 256(1). On an application under section 256(2): Held The Tribunal should have arrived at the finding as to whether the transaction relating to the purchase of house property was 'benami' or not, on the basis of the primary facts proved on…

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