TMI Blog1995 (1) TMI 108X X X X Extracts X X X X X X X X Extracts X X X X ..... having partners as Shri Chandrasekhar Chabada and Mrs. Parvatibai Chabada, being wife of Shri G.L. Chabada, doing the business in the same line had already come into existence on 1-4-1984. The Department conducted two surveys in the premises of these two firms on 23-11-1988 and on 7-12-1988, during the course of which the Department took the depositions of Shri Chandrasekhar Chabada as well as of Shri Bharat G. Chabada about the affairs of the two firms. The assessment orders for assessment year 1986-87 mentions that the cash found at Rs. 32,602 in the business premises of M/s. G.L. Chabada during the course of the survey conducted on 23-11-1988, was said to be inclusive of the cash belonging to M/s. Vishal Traders also but that the said cash could not be bifurcated firm-wise. The assessment order further states that the stock kept in the godown could also not be bifurcated and identified as to which portion of the stock belonged to which firm. It was also found during the survey that a small room said to be the office of M/s. Vishal Traders was used to keep the excess stock of M/s. G.L. Chabada. In the assessment order under consideration, the ITO also relied on some of the answe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... her due to certain disputes, as the CIT(A) found that Shri Chandrasekhar Chabada's wife was a partner in the assessee-firm. The learned counsel for the assessee also drew our notice to the sales-tax assessment orders of both the firms in which it was mentioned that the CTO found the separate existence of M/s.Vishal Traders on 3-9-1988, whereas on 19-8-1988 the firm M/S. G.L. Chabada had already been found as a separate firm by the CTO. Shri Vinod D. Kulkarni, learned counsel for the assessee, furthermore contended that the Department did not have any evidence excepting some vague statements of S/Shri B.G. Chabada and Chandrasekhar Chabada to come to the conclusion that there was no separate existence of the two firms. He also stated that when Shri Chandrasekhar Chabada mentioned in his statement that it was not possible to bifurcate the stock, he did not mean the bifurcation of stock between the two firms but meant division of the stock according to qualities. Shri Kulkarni furthermore argued that the position of capital contribution of the two firms was not at all examined and the contribution of capital in the firm M/s. Vishal Traders was not added in the hands of the partners ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... irectly prove the fact of benami or establish circumstances unerringly and reasonably raising an inference of that fact. The essence of benami is the intention of the parties and not unoften, such intention is shrowded in a thick veil which cannot be easily pierced through. But such difficulties do not relieve the person asserting the transaction to be benami of the serious onus that rest on him, nor justify the acceptance of mere conjectures or surmises as a substitute for proof. It is not enough merely to show circumstances which might create suspicion, because the court cannot decide on the basis of suspicion. It has to act on legal grounds established by evidence." It would thus be evident that the onus is very strong on the Department to prove in this case that M/s. Vishal Traders is actually a benami concern of the assessee-firm. Although for determining an issue relating to benami nature of a property or even a business concern, as in the present case, no absolute formulae or acid tests, uniformally 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: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ers in the business premises of M/s. G.L.Chabada and how the absence of such a board could have led him to the conclusion that M/s. Vishal Traders was nothing but a benami concern of M/s. G.L. Chabada. The other answers about the inability to bifurcate the stock and cash were also rather vague. Shri Chandrasekhar Chabada, however, emphatically asserted the separate existence of M/s. Vishal Traders during the course of this deposition. Factually therefore, we are of the opinion that the Department has got virtually no evidence at all to show that M/s. Vishal Traders was a benami concern of the assessee-firm. It has also not at all been tried to be shown by the Department that the assessee-firm actually enjoys the income of M/s. Vishal Traders. Because of the proximity in relation of the partners of the two firms, it might quite be possible to have part of the stock of the two firms located side-by-side at some particular point of time. Even cash of one firm also might have been brought to the business premises of another firm for various reasons or even for the sake of security. These do not go to prove any thing at all. The case-laws cited by the Departmental Representative do not ..... X X X X Extracts X X X X X X X X Extracts X X X X
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