1. These three appeals have been filed by the assessee against the common order of the AAC objecting to the inclusion of the value of a house situated at Jhinjhana Road, Shamli, standing in the name of his wife Smt. Lahar Kaur, towards the net wealth of the assessee for the assessment years 1970-71 to 1972-73.
2. During the wealth-tax assessment proceedings for the assessment year 1970-71, the WTO came to know through the Survey Report of his Inspector that the assessee constructed a house at Jhinjhana Road, Shamli, in the name of his wife, Smt. Lahar Kaur, and that the said house was let out to NCC at a monthly rent of Rs. 500. The WTO recorded the statement of the assessee on this point on 30-1-1976. In his statement, the assessee stated that his wile purchased a plot of land for Rs. 5,000 in the year 1963 and constructed a house on the said plot during the years 1963 to 1965 and spent a sum of Rs. 20,000. It was stated that the above investment of Rs. 20,000 was made up partly out of the savings of his wife and partly out of an advance of Rs. 10,000 as loan to his wife. The WTO observed that there was no evidence to show that the investment in the said house was made by the wife. The assessee further submitted before the WTO that the lady made a declaration on 25-6-1968 whereby the said house was thrown in the common hotch-potch of a HUF, consisting of the assessee, his wife and a daughter. The WTO did not give any credence to this statement for the reason that the said declaration was filed by the assessee only on 30-1-1976. On the basis of the above facts, the WTO concluded that it was the assessee who was the real owner of the house and that his wife, Smt. Lahar Kaur, was simply a name-lender, Accordingly, the value of the house, which was estimated at Rs. 1 lakh for each of the years under dispute, was included towards the net wealth of the assessee.
3. The assessee went in appeal for all the three years and before the AAC, it was submitted that the house in question belonged to his wife, Smt. Lahar Kaur, who made the necessary investment in the purchase of the plot and construction of the house. It was also submitted that subsequently the assessee's wife declared the house as belonging to a HUF on 25-6-1961. It was also pleaded that the WTO was not justified in taking the value of the said house at Rs. 1 lakh which is highly excessive and arbitrary without any basis. The AAC rejected the assessee's contention with regard to the ownership of the house. He upheld the findings of the WTO that the investment in the year were made by the assessee who was the real owner and that his wife was simply a name-lender. However, on the question of valuation, he reduced the value of the house to Rs. 81,000 for each year as against Rs. 1 lakh estimated by the WTO. Aggrieved by the findings of the AAC, the assessee has come up in these appeals.
4. Before us, the learned counsel of the assessee reiterated the contentions which were made before the authorities below. It was pleaded that there was no evidence or material with the department to come to the conclusion that the lady was benamidar of her husband and that the real owner of the house was the assessee and not his wife, Smt. Lahar Kaur, in whose name the property stood. In this connection, the learned counsel placed reliance on the decision of the Allahabad High Court in the case of Prakash Narain v. CIT/CWT  6 Taxman 159. The learned representative of the department on the other hand placed reliance on the findings of the authorities below.
5. After carefully considering the rival contentions, we are unable to uphold the findings of the AAC that Smt. Lahar Kaur was only a benamidar of her husband in respect of the property situated at Jhinjhana Road, Shamli. Before the WTO as well as the AAC, the assessee's contention was that the investment in purchase of the plot of land for Rs. 5,000 in the year 1963, and the further investment of Rs. 20,000 during the years 1963 to 1965 for the construction of the house was made by the lady partly out of her savings and partly out of the loans advanced by the assessee to his wife. The department rejected the assessee's explanation but the mere rejection of the assessee's explanation does not establish the benami character of the transaction in the construction of the house. It is settled law that the burden of proof regarding benami is upon the person who alleges so, and for that purpose, sufficient material should be brought on record to hold that what is apparent is not the real.
In this connection, we may refer to the decision of the Allahabad High Court in the case of Prakash Narain (supra), wherein their Lordships, after a detailed discussion of the entire case law on the subject, have laid down the following guidelines in this respect : 1. The burden of proof regarding benami is upon the one who alleges benami.
2. To prove benami the most important point is to examine the source of consideration and along with that there are certain other criteria which should be taken into account. Such criteria have been laid down in Jaydayal Poddar v. Bibi Hazra AIR 3. The mere rejection of an explanation would not entitle the department to claim that the consideration for the purchase of the property in the name of a non-assessee was provided by the assessee.
4. Apart, from the relationship between the parties, there must be some material or evidence to support the case of benami nature of the transaction.
In giving the above guidelines, their Lordships relied on the following observation of the Supreme Court in Jaydayal Poddar v. Bibi Hazra (supra) It is well settled that the burden of proving that the particular sale is benami and the apparent purchaser is not the real owner, always rests on the person asserting it to be so. This burden has to be strictly discharged by adducing legal evidence of a definite character which would either directly prove the fact of benami or establish circumstances unerringly and reasonably raising an inference of that fact. The essence of a benami is the intention of the party or parties concerned ; 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 any part of the serious onus that rests on him ; nor justify the acceptance of mere conjectures or surmises, as a substitute for proof.
The reason is that a deed is a solemn document prepared and executed after considerable deliberation, and the person expressly shown as the purchaser or transferee in the deed, starts with the initial presumption in his favour that the apparent state of affairs is the real state of affairs. 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 situation, can be laid down ; yet in weighing the probabilities and for gathering the relevant indicia, the courts are usually guided by these circumstances: (7) the source from which the purchase money came ; (2) the nature and possession of the property, after the purchases ; (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 or the title deeds after the sale, and (6) the 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. Nevertheless No. I, viz., the source whence the purchase money came, is by far the most important test for determining whether the sale standing in the name of the one person, is in reality for the benefit of another.
Their Lordships also placed reliance on various other authorities of the Supreme Court such as Rai Bahadur Mohan Singh Oberoi v. CIT  88 ITR 53, CIT v. Daulat Ram Rawatmull  87 ITR 349, Karnam Properties Ltd. v. CIT  82 ITR 547, CIT v. Durga Prasad More  82 ITR 540, A. Govindarajulu Mudaliar v. CIT  34 ITR 807, etc., apart from the various decisions of the High Courts.
6. Applying the ratio of the above decision to the facts of the present case, we find that apart from disbelieving the explanation furnished by the assessee, no evidence or material has been brought on record to establish that the house property at Jhinjhana Road, Shamli, was held benami by the assessee in the name of his wife, Smt. Lahar Kaur. We, are, therefore, of the opinion that there is no basis or material to include towards the net wealth of the assessee, the value of the house property at Jhinjhana Road, standing in the name of Smt. Lahar Kaur.
The value of the said property included towards the net wealth of the assessee for the assessment years 1970-71 to 1972-73 is, accordingly, deleted.