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TMI Blog1961 (7) TMI 80X X X X Extracts X X X X X X X X Extracts X X X X ..... as 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 t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tors and cinema proprietors among others at high rates of interest. The authorities made detailed enquiries, and while so Srimathi Chandramathi filed voluntary returns of income for the six years commencing from 1943-44. Thereupon, notices were issued under section 23(2) of the Act, calling upon the assessee's wife to produce the accounts and such other evidence as were relied on in support of her returns. She did not produce any cash book but produced only the following: (1) A ledger otherwise known as "Talapeeti" book opened on April 12, 1957; (2) a note book containing advance of a loan of ₹ 3,000 to the assessee's late father, Kurella Brahmayya, on May 7, 1924, at 9 per cent. relating to the assessee's fi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 377; 1,774:--The assessee had advanced ₹ 3,000 which belonged to his first wife to the family business on May 7, 1924, carrying interest at 9% per annum and credited in her name (1st wife's name) with her father as guardian. The amount was transferred to the assessee's account in March, 1930, after his wife's death. The balance on her account on September 16, 1936, was ₹ 1,773-10-0. This amount purported to be transferred to the account of Srimathi Chandramathi, the second wife of the assessee. (2) ₹ 5,124:--The gold ornaments and silver ware belonging to the assessee's first wife, Rajyalakshmi, were not returned by her father after her demise; but in lieu thereof he agreed to pay the assessee a sum of &# ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... about the management and control over the money lending business carried on in the name of his wife, Srimathi Chandramathi, he stated that he was in over-all management and control of the said business assisted by one Venkata Subba Rao and his clerks for the joint family business. The departmental authorities had before them definite evidence of the loans advanced by the assessee. The authorities had examined the witnesses who had given evidence that they borrowed money from the assessee and not from his wife, that the moneys belonged to the assessee, that they were compelled to execute the pronotes in the name of Srimathi Chandramathi and that the discharged pronotes were destroyed by him. There is, therefore, no doubt that the said nucl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the burden does lie on the income-tax authorities to establish that the business carried on in the name of Srimathi Chandramathi is in fact the business of the assessee and that his wife is only a name lender. We find that this burden has been discharged by the income-tax authorities. We refer to the material discussed by us supra in answering question No. 1 of the reference. We have also to notice that the material comprises of the information furnished by the assessee himself in part and the other evidence gathered by the income-tax authorities. The question of onus, however, does not present any difficulty as it would appear that it was not disputed before the Appellate Tribunal that the sum of ₹ 53,319 representing the aggregate ..... X X X X Extracts X X X X X X X X Extracts X X X X
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