Is it Benami
nitz
(Querist) 09 May 2009
This query is : Resolved
we are family of four living together... i was keen in buying a new house ( property),,Due to shortage of fund, My Father sold our existing house (earned by him) & we brought a new house ( my contribution is around 10% from my account) in the name of my mother & my name ( I'm his only son)....i use to remit money in his account also, 90% of money flew from my father account
Ther was no capital gain.... My Question is "will this property will be consdered Benami"... I was not aware earlier...if yes how to make the title clear in my name..... We are still living together,,,, Since i came to know about the benami act i'm worried about our hard earned money... kindly help, god bless, thanks
A V Vishal
(Expert) 09 May 2009
Why benami, can you clearly state your query, Are you thinking since your father sold his house to finance for this house it has become benami, benami accounts are basically fictious persons on whose names cash is stashed. The folloqing citation could be helpful in order to avail exemption u/s 54 assessee should have invested the amount of capital gain in another residential house. The Madras High Court in CIT vs. V.Natarajan (2006) 287 ITR 271 (Mad) has held that such exemption is allowed to an assessee even in a case where investment in a residential house is made in the name of a spouse.
nitz
(Querist) 09 May 2009
Dear Sir,
Thank you very much for your timely reply,
The new property is in the name of my mother & myself ( Joint). The 90% of the funding came from my father account (after selling his existing property), My contribution is around 10% only ( includind the money i use to remit in to his account ...
My Query is "will this property will be benami" since it is not on the name of my father ( considering his 90% contribution from his account )
The property is duly registered in my & my mother's name ( joint),
kindly reply sir, thank you
A V Vishal
(Expert) 10 May 2009
Dear Nitz
Your father can invest the sale procceds in your mother's name. The Madras HC has passed a judgement in the above case referred by me, that the amount of capital gains can be invested by the assessee in his/her spouse name, which your father has done, so there is no problem unless the whole of the capital gains are not invested under the relevant provision.
nitz
(Querist) 10 May 2009
Dear sir,
Thank you again for your timely reply,
There was no capital gain from my father sale of his existing property, & all the earning from sale was proceeded in the new property,
The shortfall funds was paid from my account ( 10%), savings
Even if i'm joint holder along with my mother. is the title clear for this new property
My doubts is the property benami ( "pls reply by a YES or No!)
God bless u sir,
thanks
nitz
(Querist) 10 May 2009
Dear sir,
Thank you very much for all ur replies,
I really appreciate & value ur involvement in guiding the commaon janta like us.
God bless you!,
adv. rajeev ( rajoo )
(Expert) 10 May 2009
It is not a benami transaction, ur father can invest in ur mother's name there is no wrong. Benami transactions are the transactions when balck money is invested in third persons name, here in your case ur father has sold his house and invested it in mother's name.
