TMI Blog1992 (1) TMI 64X X X X Extracts X X X X X X X X Extracts X X X X ..... ations of the said other two independent assessees under section 132(l 1) of the Act pending before the Central Board of Direct Taxes, the Incometax Officer was justified in separately initiating and completing assessments under section 143(3) read with section 147 of the Income-tax Act, 1961 ? (4) Whether, on the facts and in the circumstances of the assessee's case, the Income-tax Officer, Central Circle-III, Nagpur, had jurisdiction over the assessee's case ? (5) Whether, on the facts and in the circumstances of the case, the Tribunal was justified in law in holding that the assessee made investments in house property at Thana, Nagpur and in banks, when all the said investments were in the names of others separately assessed adult assessees in record ? ..... (7) Whether, on the facts and in the circumstances of the assessee's case, the Tribunal's decision in sustaining the assessment made by the Income-tax Officer under section 143(3) read with section 147 which was based on investigation and enquiries made and evidence recorded at the back of the assessee is unreasonable and perverse? (8) Whether, on the facts and in the circumstances of the assessee's case, the order p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stion No. 5 and thus we restrict this application to the following two questions : " (1) Whether, on the facts and in the circumstances of the case, the notice issued by the Income-tax Officer tinder section 148 of the Income-tax Act, 1961, was valid in law? (2) Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that Smt. Koushalya, the wife, and Ramesh, the son, were the benamidars of the assessee and in including the investments made by them and income earned thereon in the total income of the assessee ? " The material assessment years are 1967-68 to 1973-74. The assessee, Shri Lalvaney, was serving as a conductor-guard in the Central Railway. The Commissioner of Income-tax authorised the search of the premises occupied by the family members of the assessee residing at Jaikalpana Building, Ramdaspeth, Nagpur. The Central Excise Department had carried out a search at the assessee's residence at Bhusawal and it seized a number of smuggled goods. The assessee was detained under the MISA and later on tinder the COFEPOSA Act. The family of the assessee consists of himself, his wife, Smt. Koushalya, his son, Shri Ramesh, and his two ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... machines, (ii) her contradictory and unnatural statements about sale and purchase of sewing machines. Considering the fact that the son was aged only 19 years and in the absence of a licence or a qualification in radio repairing, the explanation about the son's income was also not accepted. Huge earnings out of 778 lottery winnings was considered to be unnatural. The story of receiving loans from Shri Gowekar and M/s. Alfa Engineering Company was not accepted since, after making enquiry, it was found that Gowekar was merely a clerk, living in a dilapidated house and there were contradictions about alleged repayments to both. The Income-tax Officer further found that the assessee and his family members had a total bank balance of about Rs. 2 lakhs in 1973, and in this background, the loans appeared to be unnatural. Miss Nanki had as many as six bank accounts and lockers in the Punjab National Bank, though she was serving merely as a clerk. The Income-tax Officer considered the fact that the Central Excise Department had filed a number of cases against the assessee and that the assessee was detained under the MISA and thereafter under the COFEPOSA Act. The Income-tax Officer conside ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al and it cannot be said that, in arriving at the conclusion, the basic relevant principles of law have either been missed or misapplied. A leading case on the point of determination of the benami nature of a transaction is Jaydayal Poddar v. Mst. Bibi Hazra, AIR 1974 SC 171, wherein the Supreme Court observed (at page 172) (paragraph 6) : " Though the question, whether a particular sale is benami or not, is largely one of fact, and for determining this question, no absolute formulae or acid test, uniformly applicable in all situations, can be laid down, yet in weighing the probabilities and for gathering the relevant indicia, the courts are usually guided by these circumstances : (1) the source from which the purchase money came ; (2) the nature and possession of the property, after the purchase ; (3) motive, if any, for giving the transaction a benami colour ; (4) the position of the parties and the relationship, if any, between the claimant and the alleged benamidar ; (5) the custody of the title deeds after the sale ; and (6) the conduct of the parties concerned in dealing with the property after the sale. " Direct evidence about the origin of property or source of money ..... 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