Is it Benami Transaction ?

Querist : Anonymous (Querist) 17 April 2011 This query is : Resolved
Respected Sirs,

Whether flat purchased by father in 1980 by his own money/savings and payment for the purchase of the said flat has also made from his own bank account, but the said flat was purchased in the name of one of his his son.

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J K Agrawal (Expert) 17 April 2011
If it could be proved that the person in whose name the property stands did not pay for it and some body other paid then the transaction is 'Benami' and all the heirs of father are entitle to the property.

(Do not afraid of Prohibition of Benami Transactions Act unless your fathers motive was not to defraud the creditors.)

M.Sheik Mohammed Ali (Expert) 17 April 2011
yes, i agree MR.JK.A

bhagwat patil (Expert) 17 April 2011
If you prove the consideration was paid from your father"s savings.and the the son in whose name the purchase deed is registered had no means for paying consideration the property can be treated as family owned property.the word benami always associated with some criminal smellwhich is rightly pointed out by JKA sir.you can proceed without using the word benami instead use HUF property.

adv. rajeev ( rajoo ) (Expert) 17 April 2011
Yes it amounts to benami transaction. Others legal heirs may claim their share in that property.

Uma parameswaran (Expert) 17 April 2011
If there is no fraudulent intention then it could not be considered as Binami.

H. S. Thukral (Expert) 17 April 2011
Though the source of funds is a factor to be considered while adjudging whether a particular transaction is a benami or not but other factors are also to be considered such as (1)the nature and possession of the property, after the purchase; (2) motive, if any, for giving the transaction a benami colour; (3) the position of the parties and the relationship, if any, between the claimant and the alleged benamidar; (4) the custody of the title-deeds after the sale; and (5) the conduct of the parties concerned in dealing with the property after the sale.

Regarding consequences :
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.

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