Circumstances to be taken as a guide for considering any transaction as a Benami

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The SupremeCourt in the case of  P. Leelavathi vs. V.Shankarnarayana Rao has held that in considering whether a particular transaction is benami, six circumstances can be taken as a guide:

(1) source from which purchase money came;

(2) nature and possession of property, after purchase;

(3) motive, if any, for giving transaction a benami colour;

(4) position of parties and relationship, if any, between claimant and alleged benamidar;

(5) custody of title deeds after sale &

(6) conduct of parties in dealing with the property after sale.

Mere fact that financial assistance was given is not a determinative factor.

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It is well­ settled that the burden of proving that a 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.

Credit: post taken from Facebook post of CA Ved Jain https://www.facebook.com/ved.jain

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