My father paid part of the price of a flat bought in my name. Does that make it his and not mine?
No. Financial assistance from a parent, standing alone, does not make the purchase benami. The person asserting the benami must prove it, and the Court tests the claim against six circumstances of which the source of the money is only the first. Without evidence that the person who found the money intended to buy for himself or the family, the transaction stands as it appears.
Decided by the Supreme Court (L. Nageswara Rao J and M.R. Shah J (judgment delivered by M.R. Shah J)) on 2019-04-09, reported as Civil Appeal No. 1099 of 2008; AIR 2019 SC 1938; AIR 2019 SC (CIV) 1620; (2019) 6 SCALE 112. It bears on section Benami s.2(9) of the Income Tax Act 1961, in Evidence & Burden of Proof matters.
This is where the Supreme Court now states the six-circumstance test in one place, and it is the form in which High Courts and the Appellate Tribunal apply it when testing an Initiating Officer's case. It is also the cleanest authority for the proposition that funding is not intention.
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P. Leelavathi, a daughter, sued for partition and recovery of a one-fourth share in three properties (item nos. I(a) to I(c)) standing in the names of her three brothers, defendant nos. 1 to 3. Her case was that they were benami purchases funded by her father, the late G. Venkata Rao, who died in 1974. The defendants said the properties were their own. The trial court dismissed the suit. The High Court allowed the appeal at first, and on remand dismissed it. The daughter's legal representatives appealed to the Supreme Court.
The appeal was dismissed, with no costs (para 11). The High Court had rightly held that the plaintiff failed to prove that the purchases in the names of defendant nos. 1 to 3 were benami. Some financial assistance from the father was accepted as a fact, but that could not be the sole determinative factor or circumstance for holding a transaction benami, and none of the other ingredients was satisfied (para 10).
At para 9.1 the Court set out the burden of proof from Jaydayal Poddar v. Bibi Hazra - the burden of proving that a particular sale is benami always rests on the person asserting it. At para 9.2, drawing on Binapani Paul v. Pratima Ghosh and Valliammal v. Subramaniam, the Court recorded that the source of the money has never been the sole consideration, that it is merely one of the relevant considerations and not determinative in character, and listed the six circumstances that can be taken as a guide: (1) the source from which the purchase money came; (2) the nature and possession of the property after the purchase; (3) motive, if any, for giving the transaction a benami colour; (4) the position of the parties and the relationship between the claimant and the alleged benamidar; (5) the custody of the title deeds after the sale; and (6) the conduct of the parties in dealing with the property after the sale. Applying that at para 10, the Court accepted that the father had given some financial assistance but held the plaintiff had miserably failed to establish his intention to purchase for the family. It weighed against her that she never stepped into the witness box and the evidence came from her husband, an outsider to the joint family; that the father had maintained her and her husband, had helped them buy a house at Bangalore and had given her share certificates; and that the pattern showed an intention to provide for his children rather than to acquire for himself. None of the other ingredients of a benami transaction was made out.
that cannot be the sole determinative factor/circumstance to hold the transaction as benami in nature.
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Handle my notice → Ask a CA on WhatsAppNo. Financial assistance from a parent, standing alone, does not make the purchase benami. The person asserting the benami must prove it, and the Court tests the claim against six circumstances of which the source of the money is only the first. Without evidence that the person who found the money intended to buy for himself or the family, the transaction stands as it appears. This was decided by the Supreme Court (L. Nageswara Rao J and M.R. Shah J (judgment delivered by M.R. Shah J)) and bears on section Benami s.2(9) of the Income Tax Act 1961. It is reported as Civil Appeal No. 1099 of 2008; AIR 2019 SC 1938; AIR 2019 SC (CIV) 1620; (2019) 6 SCALE 112. This is where the Supreme Court now states the six-circumstance test in one place, and it is the form in which High Courts and the Appellate Tribunal apply it when testing an Initiating Officer's case. It is also the cleanest authority for the proposition that funding is not intention. If it applies to you, the first step is this: Take the six circumstances one by one on the facts of your case and show which of them the department has no material on.
P. Leelavathi, a daughter, sued for partition and recovery of a one-fourth share in three properties (item nos. I(a) to I(c)) standing in the names of her three brothers, defendant nos. 1 to 3. Her case was that they were benami purchases funded by her father, the late G. Venkata Rao, who died in 1974. The defendants said the properties were their own. The trial court dismissed the suit. The High Court allowed the appeal at first, and on remand dismissed it. The daughter's legal representatives appealed to the Supreme Court. The matter was decided on 2019-04-09 by the Supreme Court (L. Nageswara Rao J and M.R. Shah J (judgment delivered by M.R. Shah J)). On those facts the Supreme Court held as follows. The appeal was dismissed, with no costs (para 11). The High Court had rightly held that the plaintiff failed to prove that the purchases in the names of defendant nos. 1 to 3 were benami. Some financial assistance from the father was accepted as a fact, but that could not be the sole determinative factor or circumstance for holding a transaction benami, and none of the other ingredients was satisfied (para 10).
At para 9.1 the Court set out the burden of proof from Jaydayal Poddar v. Bibi Hazra - the burden of proving that a particular sale is benami always rests on the person asserting it. At para 9.2, drawing on Binapani Paul v. Pratima Ghosh and Valliammal v. Subramaniam, the Court recorded that the source of the money has never been the sole consideration, that it is merely one of the relevant considerations and not determinative in character, and listed the six circumstances that can be taken as a guide: (1) the source from which the purchase money came; (2) the nature and possession of the property after the purchase; (3) motive, if any, for giving the transaction a benami colour; (4) the position of the parties and the relationship between the claimant and the alleged benamidar; (5) the custody of the title deeds after the sale; and (6) the conduct of the parties in dealing with the property after the sale. Applying that at para 10, the Court accepted that the father had given some financial assistance but held the plaintiff had miserably failed to establish his intention to purchase for the family. It weighed against her that she never stepped into the witness box and the evidence came from her husband, an outsider to the joint family; that the father had maintained her and her husband, had helped them buy a house at Bangalore and had given her share certificates; and that the pattern showed an intention to provide for his children rather than to acquire for himself. None of the other ingredients of a benami transaction was made out. In the words reproduced by the source cited on this page: "that cannot be the sole determinative factor/circumstance to hold the transaction as benami in nature." The decision followed or applied Jaydayal Poddar v. Bibi Hazra (1974) 1 SCC 3 - burden of proof applied; Binapani Paul v. Pratima Ghosh (2007) 6 SCC 100 - six circumstances adopted; Valliammal v. Subramaniam (2004) 7 SCC 233 - applied; Thakur Bhim Singh v. Thakur Kan Singh (1980) 3 SCC 72 - referred to.
It was decided by the Supreme Court on 2019-04-09 and is reported as Civil Appeal No. 1099 of 2008; AIR 2019 SC 1938; AIR 2019 SC (CIV) 1620; (2019) 6 SCALE 112. Binding on every court and authority in India. A Supreme Court decision binds every assessing officer, every Commissioner (Appeals), every bench of the Income Tax Appellate Tribunal and every High Court in India. An officer who declines to follow it is acting contrary to law, and that refusal is itself a ground of appeal. On section Benami s.2(9), the practical question is whether the facts of your own notice match the facts of this case closely enough for the same rule to apply.
It helps the taxpayer. The appeal was dismissed, with no costs (para 11). The High Court had rightly held that the plaintiff failed to prove that the purchases in the names of defendant nos. 1 to 3 were benami. Some financial assistance from the father was accepted as a fact, but that could not be the sole determinative factor or circumstance for holding a transaction benami, and none of the other ingredients was satisfied (para 10). It arises in Evidence & Burden of Proof matters, on section Benami s.2(9) of the Income Tax Act 1961, and was decided by L. Nageswara Rao J and M.R. Shah J (judgment delivered by M.R. Shah J). Before relying on it, read the source linked on this page and check whether it has since been distinguished, overruled or overtaken by an amendment to the Income Tax Act. In practice the steps that follow from it are these. Press the point that the source of the money is not determinative in character; it is one relevant consideration among six. Ask what evidence there is of intention. Absent direct evidence, the assertion of benami fails even where funding is admitted. Where the funding is intra-family support, put the pattern on record - other children helped, maintenance provided, other assets bought - as the Court treated that pattern as answering the allegation. Make sure the person asserting the benami actually gives evidence; here the plaintiff never entered the witness box and her husband's evidence was treated as that of an outsider to the family.
Still good law. Applied by the same two-Judge Bench of the Supreme Court a month later in Mangathai Ammal v. Rajeswari, decided 9 May 2019, which adopted the six guiding circumstances in its own reasoning at paras 8.2 and 8.3. No decision doubting or overruling it was located. No source could be cited for that finding. Checking whether an authority still stands matters as much as knowing what it held: a decision may be overruled on one point and survive on another, or the provision it interprets may have been amended since. Read the source and the editor's note on this page before relying on it in a reply to an Assessing Officer or in an appeal.
A caution on the frequently quoted sentence that financial assistance from a father does not by itself make a transaction benami: as printed, that sentence is in para 7.1, which is the defendants' counsel's submission, not the Court's holding. The Court's own formulation is at para 10, that financial assistance cannot be the sole determinative factor or circumstance - quote that paragraph, not para 7.1. The judgment makes no reference to the Benami Transactions (Prohibition) Amendment Act 2016; it is decided on the general law of benami and the 1988 Act. The discovery note listed the section as Benami s.2(9), which is the amended definition and is not what this judgment turns on. This library shows the verification state of every entry openly. This entry has not yet been read in full by a chartered accountant. The summary reflects the sources listed on this page. Read the source before you rely on it in a reply to an Assessing Officer or in an appeal before the Commissioner (Appeals) or the Income Tax Appellate Tribunal.
The appeal was dismissed, with no costs (para 11). The High Court had rightly held that the plaintiff failed to prove that the purchases in the names of defendant nos. 1 to 3 were benami. Some financial assistance from the father was accepted as a fact, but that could not be the sole determinative factor or circumstance for holding a transaction benami, and none of the other ingredients was satisfied (para 10).
TaxSphere, “P. Leelavathi v V. Shankarnarayana Rao”, https://taxnotice.vittsphere.com/caselaw/case/p-leelavathi-v-shankarnarayana-rao-benami-six-circumstances/ (validity last checked 2026-09-16)
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