LexMOHAN SINGH OBEROI versus COMMISSIONER OF INCOME-TAX, WEST BENGAL
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A 8 c D E F G II 1057 MOHAN SINGH OBEROI v. COMMISSIONER OF INCOME-TAX, WEST BENGAL November 29, 1972 [K. S. HEGDE, P. JAGANMOHAN REDDY AND H. R. KHANNA• JJ.J Income-tax-Shares standing in tire names of wife and son:r of assuste-Dividend incorru from sl1t1res-When to be includtd 111 total income of asse111e--Burdtn of proof. For the uaeument yem 1953·54 and 1954·55 the appellant showed tbe aross dividend derived by him from shares held by hlm, u hla in· ·come. The Income-tax Officer however included in the asmsee's Income the aross dividend of certain shares held by the asmsee's wi'le and 1001. The Appellate Assistant Commi11ioner confirmed the order. The Appel· late Tribunal held In favour of the asse11ee on the ground that thouah the shares might have been acquired out ol the secreted profits ol the appellant, In the absence of any evidence that the sham remained in substance the property of the assessee, the dividend income could not be included in his total income, and that it was only the wife and the sons of the assessee, who were registered holders of the shares, that could . be assessed for the dividend income from those shares. The High Court, in reference, held against the assessee. Dismissing the appeal to this Court, HELD : (I) The order of the Income-tax Officer showed th1>t it had been admitted by the assessee in the past, before the Department, that the shares in question, standing in the name of the assessee's wife and sons, belonged to the assessee and were his own Investments. The Tri- bunal nowhere observed that the observations o'l the Income-tax Officer were factually incorrect or that the said admission had not been made by the assessee. There was ample material to justily the inference that the assessee was the real owner of the shares and that they were held by him benami in the name of his wife and sons. [1061 E·F, G-HJ (2) If the Tribunal had given " finding that the purchase wu not benami, and if the finding was based on some evidenoe, the same would have to be accepted in proceeding in reference under s. 66(1) of the Indian Income-tax Act, 1922. But the tribunal nowhere dealt with the question as to whether the purchase of shares was or we~ not benami in the name of the wife and sons of the assesse. rtQ63 B-CJ (3) Once it was found that the assessee was the. real owner of the shares and that they had been purchased benami in the names of his wl'fe and sons, it would be presumed that the ownership of the share• con- tinued to remain vested in the assessee, unless it was shown by him that because of some subsequent event, he had ceased to be the owner of the shares. Therefore. even thought the wife. and sons were the registered holders of the shares. the dividend income from those shares should be assessed as the assessee's income. 111e tribunal excluded the dividend income on a ground whld! was not legally tenable. [1062 E·ID Kishanchand Lunidarin11 Bajaj v. Commi.rrioner of Income Tax, [1966] 60 I.T.R. 500 followed. 1058 SUPREME COURT REPORTS [1973] 2 S.C.R. Howrah Trading Co. v. Commissioner of /ncoftti! tax, [19591 36 l.T.R. 215 and Meenakshi Mills v. Commwioner of Income Tax, [1956] S.C.R.· 691 referred to. CIVIL APPELLATE JURISDICTION : Civil Appeals Nos. 2~·~2 and 2493 of 1969. Appeals by special leave from the judgment and order dated November 25, 1969 of the Calcutta High Court in I. T. Refe- rence No. 149 of 1963. B S. T. Desai, T. R. Bhasin, R. N. Banerjee and La/it Bhan~, Ravinder Narain, J. B. Dadachanji and 0. C.· Mathur for thi "·' appellants. c B. Sen, P. L. Juneja, S. P. Nayar and R. N. Sachthey, for the respondent. KHANNA, J. These two appeals by special leave are directed against the judgment of Calcutta High Court whereby it answered the following question referred to it under section 66 ( 1) of the D Indian Income Tax Act, 1922 in the negative in favour of the · revenue : "Whether on the facts and in the circumstances of the case, the Tribunal was justified in excluding from the assessable income of the assessee for the assessment years 1953-54 and 1954-55 the sums of Rs. 56,586 and Rs. 39,542 which were the amounts of dividend received by the assessee 's wife and two sons from shares ac- quired out of the profits of the assessee ?" The matter relates to assessment years 1953-54 and 1954-55, the corresponding previous years for which ended on March 31, 1953 and March 31, 1954 re
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