Pasayat, CJ.
Heard.
2. All the I.T. Rs. are disposed of by this common judgment as the dispute is common. It relates to the levy of tax on certain incomes from house property. The assessee was assessed to tax under the Income Tax Act, 1961 (hereinafter referred to as 'the Act'). assessing officer was of the view that the assessee derived property income from the building let out on rent treating the income to be from asset owned by the assessee. The assessing officer held that the assessee had purchased a property for consideration of Rs. 80,000 in the names of Shri Abdul Rahiman, Shri K. Abdulla Kunhi and Shri K. P. Abdulla. After purchasing the property in their names, the assessee constructed a compound wall at an estimated cost of Rs. 40,000. The assessee took the stand that he had nothing to do with either the purchase of the property or construction of compound wall. This plea was not accepted. A sum of Rs. 40,000 was added to the income of the assessee as income from undisclosed sources for the assessment year 1972-73 relating to investment in construction of boundary wall. The rental income was added and tax was levied for rest of the years involved, that is; 1973-74, 1976-77 to 1979-80 and 1981-82 to 1983-84. So far as the assessment year 1972-73 is concerned, the Tribunal, Cochin Bench, observed that the revenue have failed to establish that the property in question belonged to the assessee, disbelieving the stand of benami purchase as taken by the revenue. In view of the finding recorded in the assessment year 1972-73, in subsequent periods the rental income included in the assessable income of the assessee was directed to be deleted. On the basis of the direction given by this Court in several original petitions under section 256(2) of the Act, the following common question has been referred for opinion :
'Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was justified in deleting the addition on Rs. 40,000 relating to the improvement of the Mangalore Property, in the year 1972-73 and the addition of Rs. 15,000 for the assessment years 1973-74, 1976-77 to 1979-80 and 1981-82 to 1983-84 as the income from the said property.'
3. According to the learned counsel for the revenue, the Tribunal failed to appreciate the factual aspects in their proper perspective and the conclusions are perverse. The assessee's stand is that question of benami is one of facts, giving rise to no question of law.
4. On consideration of the factual aspects, the Tribunal observed that there was no material to show that the assessee made investment for the property in question and/or regarding benami nature of transaction. Certain factual aspects were highlighted by the revenue, which were analysed in detail by the Tribunal to conclude that the revenue had failed to prove that the assessee was the real owner of the concerned properties. The Tribunal considered the relevant factual aspects. In the case at hand, ordinary presumption of law is that the apparent state of facts is real unless the contrary is proved and, therefore, the burden of proving that a transaction is sham or that the person in whose name the property stands is not the real owner but is only a benamidar for another, is on the taxing authorities. For determining the question no absolute formulae or acid test, uniformly applicable to all situations, can be laid down. Yet, in weighing the probabilities and for gathering the relevant indicia, Courts are usually guided by the following circumstances :-
(1) the source from which the purchase money came, (2) the nature and possession of the property, after 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 alleged real owner and benamidar, (5) custody of the title deeds after the sale, and (6) conduct of the parties concerned in dealing with the property after the sale. The above indicia are not exhaustive and their efficacy varies according to the facts of each case. Reference was made to the statements of various persons who claimed to be in possession of the property for the purpose of showing that they were the real owners.
5. The conclusions arrived at by the Tribunal are factual. It kept in mind the principles relating to benami nature of transaction, and has recorded finding to the effect that the same was not established. The decision whether benami transaction was involved is one of facts. The burden of showing that a particular transaction is benami and the owner is not the real owner always rests on the person asserting it to be so and this burden has to be strictly discharged by adducing legal evidence of a definite character which would either directly prove the facts 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 shrouded 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 rests on him, nor justify the acceptance of mere conjectures and 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.- (See Krishnanand Agnihotri v. State of M.P. AIR 1977 SC 796, Jayadayal Poddar v. Mst. Bibi Hazra, AIR 1974 SC 171). No question of law arises unless the conclusions are perverse and based on surmises and conjectures. The case at hand does not belong to that category. The question referred to is answered in the affirmative, in favour of the assessee and against the revenue.