JUDGMENT R. M. Sahai, J. - The Income Tax Appellate Tribunal, Allahabad Bench, Allahabad, has referred the following question for the opinion of this Court :
"Whether on the facts and circumstances of the case the Income Tax Appellate Tribunal was right in law in holding that the business carried on in the name of Habib Oil Industrial Corporation belonged to the assessee ?"
The assessee a registered partnership firm consisted of three partners the mother and her two sons-Mist. Sagiran Bibi, Saeed Ahmad and Sareef Ahmad. It carried on the business of edible oil under the name and style of M/s. Saeed Ahmad Sarif Ahmad. A plot of land at Jajmau stood registered in the name of Sharif Ahmad but the investment in the construction of the factory building on the said plot and the installation of the machinery for an oil mill came initially from the assessee firm. The cost of the construction and the machinery later on debited to the two male partners of the firm, namely, Saeed Ahmad and Sareef Ahmad in equal proportion. The dispute between the assessee and the Department was that on the one hand it was alleged by the firm that the said factory building belonged not to the assessee firm but to the said two male partners individually whereas the Income Tax Officer treated the building as belonging to the assessee firm. By a lease deed executed on 13th November 1964 between the assessee firm through Saeed Ahmad and M/s. Habib Oil Industrial Corporation the oil factory at Jajmau was given on lease to the firm on monthly rent of Rs. 400/- for a period of five years commencing from 1st of June 1964. The firm of M/s. Habib Oil Industrial Corporation consisted of Smt. Chaman Are Begam and Smt. Shakila Begum wives of the male partners of the assessee firm. The Income Tax Officer required the assessee firm by a latter dated 28th December 1965 to explain why the income from Habib Oil Industrial Corporation be not included in the income of the assessee. After considering the reply sent by the assessee the Income Tax Officer came to the conclusion that the income of Habib Oil Industrial Corporation should be treated as the income of the assessee firm. The assessee filed an appeal and the Appellate Assistant Commissioner recorded a finding that M/s. Habib Oil Industrial Corporation was only a benami concern of the assessee firm. In coming to this conclusion the Assistant Commissioner found that the factory building belonged to the assessee firm but it was being utilised by M/s. Habib Oil Industrial Corporation for the manufacture of oil which was sold mainly to the assessee firm. The assessee filed an appeal before the Tribunal which was also dismissed.
2. The Tribunal recorded the following finding :
"The admitted facts ar that the new business under the style Habib Oil Industrial Corporation is a partnership concern of two lady partners being wives of Sri Sayeed Ahmad and Sri Sareef Ahmad the two male partners of the assessee firm, that they have contributed a capital of Rs. 10,000/- each available to them partly by making withdrawals from the assessee firm and partly out of their alleged unproved past savings, that they are not working partners and are acting through their respective husbands who hold power of attorney on their behalf, that its most of the sales are to the assessee firm and that the assessee has let out its factory premises costing in all about Rs. 90,000/- to the new firm at a nominal rent of Rs. 400/- per month. The money was available to these ladies from the assessee firm as their mother-in-law also a partner in the assessee firm had given certain gifts to them in the earlier years. It is thus evident that not only the reasons but also the skill of the partners of the assessee firm is employed in the carrying on of the business of the new unit, and that there is no evidence that the benefits arising out of the said unit are really enjoyed by the recorded partners to the exclusion of the assessee."
The circumstances relied on behalf of the assessee that the firm was registered in the Sales Tax Department or that the two ladies of the new unit executed deed of partnership were not considered sufficient in law to change the real nature of transaction which was benami. Reliance has been placed on behalf of the assessee on Commissioner of Income Tax, Bombay vs. Gokul Das Hakim Chand (11 I.T.R. 462), Provident Investment Company Ltd. vs. Commissioner of Income Tax (24 I.T.R. 33 and 184) and Gopi Nath Agrawal vs. Commissioner of Income Tax (28 I.T.R. 753) for the proposition that the mere fact that a business is being carried by means of money obtained from a certain person cannot lead to any conclusion that the business must belong to that person. Counsel for the Department has however relied on two decisions reported in Commissioner of Income Tax, West Bengal vs. Durga More (82 I.T.R. 540) and Karnani Properties Ltd. vs. Commissioner of Income Tax, West Bengal (82 I.T.R. 542). On the strength of these authorities he has urged that the assessee cannot challenge the findings recorded by the Tribunal as no such question has been referred to this court.
3. The assessee has not challenged the finding recorded by the Tribunal on any of the grounds on which it can be assailed in law. The Tribunal has apart from the relationship between the partners of the Habib Oil Industrial Corporation with that of the assessee relied on a number of circumstances and has inferred from that that the business carried on in the name of Habib Oil Industrial Corporation belonged to the assessee. The inference is based on the evidence and circumstances. We agree with the counsel for the Department that on the question as framed we cannot consider the validity of the findings recorded by the Tribunal. As the finding cannot be challenged the question referred is answered in the affirmative the assessee and in favour of the Department. The Department shall be entitled to its costs which we assess at Rs. 200/-.