Comtroller of estate duty v aloke mitra case: importance
Importance of Comtroller of estate duty v aloke mitra case?
The case of Aloke Mitra throws light upon the ambit of the property right in case of benami transactions. The prime question which the Supreme Court considered in this matter was whether in case of a benami transaction for a property where the real owner of the property dies, does the value of the concerned property be considered as a part of the estate of the deceased?
The Supreme Court based upon the facts in the said case identified that where a property is purchased by a husband in the name of his wife, or by a father in the name of his son, it must be presumed that they are benamidars. The onus to prove that the said property was a gift lies upon the wife or the son to establish themselves as the actual owners of the property and not a benamidars.
The Supreme Court decision in this matter was not limited to the facts of the case alone but also attempted to clarify the legal nuances associated with benami transactions. The Supreme Court identified that a benami transaction does not vest any title in the benamidar and is merely an ostentatious act by the real owner who enjoys the right to enjoy the benefits derived from the property being actual buyer of the property. The Court distinguished between a benami transaction and a trust, as in a trust, the trustee is the legal owner of the property while in the case of a benami transaction the real owner has got the legal title though the property is in the name of the benamidar with no right over the property.
Considering a series of precedent and distinguishing between a benami transaction and a trust, the Supreme Court identified that a benamidar has no interest at all in the property standing in his name and the real owner can always deal with the property without any reference to the benamidar. This judgment is an important judgment expounding the intricacies associated with a benami transaction and the scope of the right vested upon the real owner of the property in such a transaction.
 (1980) 126 ITR 599
The case Controller of Estate Duty v. Aloke Mitra is on the property right in case of benami transactions. The main issue which the Supreme Court looked in this matter was whether in the case of a benami transaction, the value of the property held by a benamidar passes upon the death of the real owner and is includible in the estate of the deceased? The Hon'ble Supreme Court identified that there can be no doubt now that a purchase in India by a native of India of property in India in the name of his wife unexplained by other proved or admitted facts is to be regarded as a benami transaction by which the beneficial interest in the property is in the husband although the ostensible title is in the wife” On distinguishing between a benami transaction and a trust the court stated the trustee is the legal owner of the property while in the case of a benami transaction the real owner has got the legal title though the property is in the name of the benamidar with no right over the property. The Hon'ble Supreme Court identified “In applying The Estate Duty Act, 1953 to any particular transaction, regard must have to its substance, its true legal effect, rather to the form in which it is carried out" This case is important because it elaborates the benami transaction and the right vested upon the real owner of the property in benami a transaction.You can call me at 09555 507 507 or send me a mail at firstname.lastname@example.org.
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