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2011 (8) TMI 702 - HC - Benami PropertyIssue of notice after the expiry of 4 years - Facts: assessee had paid a sum of ₹ 3,03,435 to Sri Mitra, therefore, 33.85 per cent. of this was ₹ 1,02,712 had escaped the assessment. Payments made on development agreement included an amount of ₹ 3,03,435 paid by the assessee to Sri Mitra during the assessment year 1994-95 - Held That:- Prima facie there was escapement of more than ₹ 1 lakh. Hence the reassessment proceedings were not hit by the provisions of section 149(1)(a) and (b) of the Income-tax Act. Clubbing of income - Benami Transaction versus shame transction - Held That:- A benami transaction is different from a sham transaction wherein the owner of the property executes a conveyance in favour of another without the intention of transferring the title to the property thereunder. In the case of benami transaction, there is an operative transfer from the transferor to the transferee though the transferee holds the property for the benefit of the person who has contributed the purchase money. However, in the case of sham transaction there is no operative transfer at all and the title rests with the transferor notwithstanding the execution of conveyance. It is indeed surprising and unbelievable that a person of virtually no means would get life time gain of ₹ 8 lakhs and would not know where he has used/invested the money. It proves that he has no control over the source or destination of funds passing through his hands. - It proves that he has no control over the source or destination of funds passing through his hands. Thus, he is a benamidar of the assessee-firm. Therefore, on the basis of the statement of Sri Mitra (supra) we are of the view that he was the benamidar of the assessee-firm and his income was rightly clubbed with the assessee-firm. - Decided in favor of revenue.
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