SC: Transaction not benami merely due to payment of stamp duty by other

The Hon’ble Supreme Court, on 9thMay 2019, in the matter of Mangathai Ammal (Died) through LRs and Others v. Rajeswari & Others observed that the payment of part sale consideration or stamp duty at the time of execution of the sale deed cannot be the sole criteria to hold the sale/transaction as benami.

The Hon’ble Supreme Court observed that:

The payment of part sale consideration cannot be the sole criteria to hold the sale/transaction as benami. (Para 9.1)

While considering a particular transaction as benami, the intention of the person who contributed the purchase money is determinative of the nature of transaction. (Para 9.1)

The intention of the person, who contributed the purchase money, has to be decided on the basis of the surrounding circumstances; the relationship of the parties; the motives governing their action in bringing about the transaction and their subsequent conduct etc. (Para 9.1)

By mere contributing the part sale consideration, it cannot be inferred that Sale Deed was benami transaction . (This inference has been drawn on the basis of Para 9.1)

A sale deed cannot be termed as a benami transaction merely because the stamp duty at the time of execution of the sale deed was purchased by some other person. (This inference has been drawn on the basis of Para 9.2)

Copy of judgement:Judgement_09-May-2019

-Tushar Kaushik

Leave a Reply

Your email address will not be published. Required fields are marked *