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Judgment
Deepak Gupta, J.—These two Income Tax appeals are being disposed of by one judgment since they have both been admitted on the following identical questions of law:
Whether the Tribunal was right in law in holding that the appellant was liable to explain the investments made in the properties owned by Prem Singh u/s 69 of the Income Tax Act, in spite of the specific provisions of the benami Transactions (Prohibition) Act, 1988 and repealed Section 281A of the Income Tax Act?
Whether the learned Tribunal was justified in restoring appeal filed by the revenue to Commissioner (Appeals), when nothing has been said about the additions deleted by the Commissioner (Appeals) especially in view of the fact that the said deletion made by the Commissioner (Appeals) have been rather approved by the learned Tribunal?
The brief facts necessary for decision of the appeals are that the Income Tax department carried out search and seizure action u/s 132 of the Income Tax Act at the residential and business premises of the assessee on 14-5-1992. In these operations a cash amount of Rs. 1,56,875 was recovered. According to the observations of the assessing officer the assessee had been carrying on business of purchase and sale of land. The modus operandi alleged by the assessee was that he would obtain general power of attorney in the names of different persons including one Shri Prem Singh alleged to be his servant. The properties were purchased in the name of Prem Singh since he was a Himachali agriculturist.
The dispute in these cases is short. The question that arises is whether the Income Tax authorities can ask the assessee to furnish explanations for the investments allegedly made by him in respect of the property registered in the name of Prem Singh?
The learned Tribunal has held that the department was well within its right to ask for an explanation from the assessee and in case the explanation is not accepted to add the unexplained investments to the income of the assessee. The assessee is only aggrieved by this portion of the order of the learned Tribunal.
We have heard Shri Rajesh Garg, learned Counsel for the appellant and Shri Vinay Kuthiala, learned Counsel for the respondent.
The main argument of Shri Garg is that the appellant cannot be treated as the assessee in the case. According to him under the provisions of the Benami Transactions (Prohibition) Act, 1988 (hereinafter referred to as the Benami Act), the person in whose name the property is registered is for all intents and purposes the true owner of the property and therefore the Income Tax department can only ask him to explain the source from which the property was