I have this confusion about nofollow tag. Is there any benefit in terms of search engine optimization of having back links which are nofollow tag. Some pundits seem to suggest that it is beneficial in having back links. Is this true?
Is it better to have nofollow backlinks than having none at all?
Yes because real people can follow them (which is the primary purpose of having links in the first place).
Of greater importance than whether they are nofollow or not is the relevance of the link. If it is a link to a related page that contains more information on the same topic someone is already reading about then people will follow the link. If it is a totally unrelated page then it is unlikely anyone will follow the link and then it may as well not be there even if the search engines can follow it since if they follow it they will then see how irrelevant the page is and value the link accordingly.
Compare with dofollow link, nofollow will not give that much weight for your site on google ranking calculations. but nofollow links also have the capability of providing more traffic.