Aid to a relative for buying assets not a benami transaction
The supply of money is certainly one of the applicable considerations but is now not determinative in man or woman, says SC.
The Supreme Court has held in a recent judgment that mere economic assistance supplied to purchase belongings for the welfare of a circle of relative contributors can’t be classified as a Benami transaction.
HC order upheld
A Bench led by Justice L. Nageswara Rao has upheld a Karnataka High Court order that disregarded a plea that the economic help given by using G. Venkata Rao to his relatives’ circle of relatives individuals to purchase assets changed into a Benami transaction.
Financial help or cash supply cannot be the sole determinative aspect or circumstance to hold that a purchase of assets is Benami.
“The aim of the late G. Venkata Rao became to offer monetary help for the welfare of his sons, but now, it is not beyond that,” the court cited.
Own precedents
The court reiterated its precedents while considering the character of Benami transactions.
“The source of money had never been the only consideration. However, it is simply one of the relevant concerns that is no longer determinative in man or woman,” Justice Rao wrote in the verdict.
Bhim Singh case
It referred to the apex court’s judgment in Thakur Bhim Singh’s case, which held that “while considering a particular transaction as Benami, the aim of the person who contributed the acquisition cash is determinative of the nature of the transaction.”
“It is besides discovered using this court docket as to what the intention of the person who contributed the purchase money needs to be decided on the idea of the encircling circumstance; the connection of the parties; the reasons governing their movement in bringing about the transaction and their subsequent behavior, and so on,” the Bench observed.
The bench held that numerous instances normally guide courts to finish the nature of a transaction like Benami.
Key elements
These elements consist of the source from which the acquisition money came; the nature and possession of the assets after the purchase; the cause, if any, for giving the transaction a Benami coloration; the location of the parties and the connection, if any, between the claimant and the alleged Benamidar; the custody of the title deeds after the sale and the conduct of the events involved in managing the belongings after the sale.
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