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TMI Blog1976 (10) TMI 152X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessment year 1947-48, was fixed ₹ 1,25,090/11/in March, 1952. A demand was made for its payment, but he neglected to meet it and a certificate was issued on October 8, 1952 to the Collector of Delhi for its recovery as arrears of land revenue. The Collector was asked to attach house No. 15, Keeling Road and house No. 9, Hailey Road in New Delhi, of defendant No. 3. Both the houses were attached on October 13, 1952. Meanwhile, defendant No. 3 appealed against the order of assessment. The Appellate Assistant Commissioner allowed the appeal on May 12, 1953, set aside the assessment and directed a fresh assessment. The order of fresh assessment was made on November 30, 1953 and the incometax demand was reduced to ₹ 1,05,769.13. The assessments for 1944-45 and 1948-49 were completed on March 28 and 31, 1953, respectively, raising a tax demand for ₹ 1,94,738.15. A recovery certificate was issued to the Collector for the same on May 4, 1953 and the house at No. 15, Keeling Road was again attached on August 6, 1953. We are not concerned with the house at No. 9, Hailey Road, for the controversy before us relates to house No. 15, Keeling Road, hereinafter referred t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ive aid, instigation and advice of the 3rd defendant and to subserve and carry out the object of placing his property, viz., No. 15, Keeling Road out of the reach of his creditors". It was further urged as follows,- "The consideration mentioned in the sale-deed of 25th May, 1953 was illusory. In effect and substances the 2nd defendant purported to sell a house to the I st defendant in which company in return was to become a holder of shares . of controlling interest, the shares being the alleged price., Except for the legal fiction of the I st defendant Company being juristic person the 'sale was by the vendor to himself. . None of these devices and subterfuges could divest the 3rd', defendant of his ownership of the property in question. The 1st defendant company by its_promoters directors and office bearers was fully aware of all the facts of the case, including the true state of the title to the property No. 15, Keeling Road, the highly embarrassed financial circumstances of the 3rd defendant the facts that he owed to the plaintiff" alone taxes to the amount of several lakhs of rupees etc. The 1st defendant is not a purchaser in good faith for considerat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... chased with "his own money (₹ 10,000/'by cheque No. 32920 dated 14.11.1946 on the New Bank of India Ltd., New Delhi drawn by his mother K. Rani and ₹ 50,000/paid in cash before Sub-Registrar)". The Company also pleaded that the transaction of sale in its favour was without notice of any body else's claim and was binding. Defendant No. 2 filed a short written statement stating that he was the owner of the house having purchased it with "his own money". He pleaded that he had paid ₹ 10,000/by cheque on New Bank of India Ltd., New Delhi, and ₹ 50,000/were paid before the SubRegistrar. He pleaded further that he had no knowledge of the Collector's order and that his order, if any, was ex-parte. As regards the Company, defendant No. 2 pleaded that it was a real and genuine Company and that out of his shares worth ₹ 90,000/he had sold shares worth ₹ 74,000/-. 12 --1338SCI/76 The trial court found that the house was purchased "benami" in the name of defendant No. 2, by defendant No. 3 with his own money and that the sale of the house to the Company by defendant No. 2, was "sham and was effected in order to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... "in a ease where it is asserted that an assignment in the name 011 one person is in reality for the benefit of another, the real test is the source whence the consideration came" It is also necessary to examine in such eases who actually has enjoyed the benefits of the transfer. Both these tests were applied by this Court in Meenakshi Mills, Madurai v. The Commissioner of IncomeTax Madras.( [1956] S.C.R. 691.] ) It is therefore necessary, in the present case, to find out the source of the consideration for the. transfer, as also to find out who has been in enjoyment of the benefits of the transaction. It is equally well settled that, although the onus of establishing that a transaction is 'benami' is on the plaintiff, 'where it is not possible to obtain evidence which conclusively establishes or rebuts the allegation, the case must be dealt with on reasonable probabilities and legal inferences arising from proved or admitted facts." The burden of proof is, however not static, and may shift during the course of the evidence. Thus while the burden initially rests on the party who would fail if no evidence is led at all after the evidence is recorded, it re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1946, on the New Bank of India Ltd., New Delhi," but it is again significant that while the document states that the payment of ₹ 10,000/was made by the vendee (defendant No. 2)'by the aforesaid cheque, he has stated in the trial court that the cheque for ₹ 10,000/was issued by his mother, in favour of the vendor. He was not able to explain the discrepancy: and merely stated that his written statement (which did not disclose the source and the name of the person who drew the cheque for ₹ 10,000/-) was correct. If it had been a fact that defendant No. 2 really obtained a cheque for ₹ 10,000/from his mother, in the vendor's name, and, if it was not really a cheque drawn by his father, there was nothing to prevent him from establishing that f. act with reference to the counter-foil of his mother's cheque book or her account with the bank. The defendant has also not stated whether he repaid the money to his mother and, if so, when, or whether it was a gift to him and, if so, why, when she had another son also. As it is, it cannot be said that defendant No. 2 has been able to establish that it was he who paid the sum of ₹ 10,000/to the vend ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y based on a mis-appreciation of the law relating to "benami" transactions for, as has been stated, it was necessary to find out whether it was defendant No. 3 who had enjoyed the benefit of the transaction. Moreover, the finding of the High Court is against the evidence on the record, and must be set aside. We have therefore no hesitation in holding that the purchase of the house was "benami" and that its ostensible owner defendant No. 2 was not the real owner but was a "benamidar." The ancillary question is as to who was the real owner of the house for whom defendant No. 2 was the "benamider"?. We have not taken the admissions of defendant No. 3 into consideration so far, but they have a direct bearing on the question now before us. lie recorded a statement Ex. P. 1 dated August 12, 1950 before Puran Chand P.W. 1, Income-tax Officer, which has been proved by the witness. It has been stated there as follows,- "I purchased 15 Keeling Road on 12.12.46 for ₹ 60,000/in the name of my son (Major Krishan Lal). This money was paid out of my bank accounts and I have shown the details and payments from my bank pass books." Then th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ss there has been sufficient opportunity to test the grounds of assertion and the credit of the witness, by cross-examination by the party against whom it is offered (post, 1362); e.g. if Jones had said out of court. "The party--opponent Smith borrowed this fifty dollars", Smith is entitled to an opportunity to cross-examine Jones upon that assertion.. But if it is ,Smith himself who said out of court, I borrowed this fifty. dollars, certainly Smith cannot complain of lack of opportunity to cross-examine himself before his assertion is admitted against him. Such a request would be absurd. Hence the objection of the Hearsay rule falls away, because the very basis of the rule is lacking, viz, the need and prudence of affording an opportunity of cross-examination." Moreover, the defendant No.3 had full opportunity,. to appear and defend himself, but he did not do so and the case proceeded against him ex-parte. The plaintiff even tried to examine him as his own witness, but his appearance could not be secured in spite of the prayer for the issue of summonses and a warrant. There is therefore force in the argument to the contrary. So also, there is no force in the argum ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is whether the sale of the house in favour of the Company (defendant No. 1 ) was a sham transaction and was effected to defeat and delay the creditors of defendant No. 3. This was the subject matter of issue No. 2 and the trial court's finding in affirmative has not even been examined by the High Court. We find that the admitted facts of the case are by themselves sufficient to show that the finding of the trial court is justified and does not call for any interference. Defendant No. 3 was assessed to income-tax for a sum of ₹ 1,25,090/11/for assessment year 1947-48 in March 1952. Defendant No. 3 failed to pay that amount on demand and a recovery certificate was issued on October 8, 1952. The house was therefore attached on October 13, 1952. Defendant No. 2 raised an objection, and prayed for the release of the house. The Collector rejected the objection on March 3,. 1953. No appeal, or other remedy was sought against .that order. The Appellate Assistant Commissioner however allowed the appeal of defendant No. 3 against the assessment of income-tax and ordered a fresh attachment by his order dated May 12, 1953. In the meantime, the Company was incorporated in February, 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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