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TMI Blog1966 (1) TMI 4X X X X Extracts X X X X X X X X Extracts X X X X ..... ing final decision of this court : " Whether, on the facts and in the circumstances of the case, the two owners can be assessed as an 'association of individuals' on the income of the entire area under their joint cultivation ? " One Bhagwati Prasad was the owner of the land in dispute. He granted a lease of 326.1 acres in favour of the assessee, M. L. Bagla, on April 20, 1942, and another lease of 316.3 acres in favour of Puranmal Jaipuria on January 21, 1941. For the Fasli years 1356, 1357, 1358 and 1359, they jointly appointed one person as manager to cultivate the lands of the two leases jointly. The manager cultived the lands of the two leases, maintained one set of accounts of the expenditure incurred over the cultivation of the l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... defined in section 2(11) to mean " an individual or association of individuals, owning or holding property for himself or for any other, or partly for his own benefit and partly for that of another, either as owner, trustee, receiver, manager, administrator or executor or in any capacity recognised by law, and includes an undivided Hindu family, firm or company. " An individual is undoubtedly a person ; two or more individuals are a person if two conditions are fulfilled, (1) that they form an association, and (2) that they own or hold property for themselves or for any other person either as owners or as trustees, receivers, etc. It is not enough that two or more individuals form an association ; they must also own or hold property either ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... forming an association. In our finding that the two individuals formed an association, we are supported by Commissioner of Income-tax v. Smt. Indira Balkrishna. The Supreme Court held in that case that two co-widows succeeding as co-heirs to the estate of their deceased husband did not form an association of persons within the meaning of section 3 of the Indian Income-tax Act. "Association of persons " is not defined in the Income-tax Act just as " association of individuals " is not defined in the Agricultural Income-tax Act. S. K. Das J., speaking for the court, referred to the meaning of " association " given in the Oxford Dictionary as to join in a common purpose, or to join in an action " and observed : "An association of persons ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... same reasoning the two individuals in the instant case formed an association. Mohamed Noorullah v. Commissioner of Income-tax is another decision dealing with the meaning of " an association of persons " occurring in section 3 of the Income-tax Act. Kapur J. applied the test laid down in Indira Balkrishna's case. The learned judge observed that "a combination of persons formed for the promotion of a joint enterprise banded together as if they were co-adventurers " constituted an association. He approved of the statement made in Commissioner of Income-tax v. Dwarakanath Harischandra to the effect that " as soon as there was election to retain the property and manage it as a joint venture the persons so electing became an association of indi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... holding of property belonging to different owners. Just as one individual can own a property and another can hold it, so also two individuals can own parts of a property and an association of them can hold it. Whether an association of them holds it or not is an inference to be drawn from the established facts. The established facts here are that the two individuals jointly allowed the common manager to cultivate their lands and derive profits from them. They pooled their lands and got them cultivated as if they belonged to only one of them. The manager made no distinction between one piece of land and another piece of land ; he managed them jointly. Only at the time of the distribution of the profits he took into consideration the fact th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cognised by law. The positive existence of a law recognising the capacity in which it held the lands is required, but it is totally absent. The manager appointed by the two individuals may be a person within the meaning of section 2(11) but not they themselves as an association. As there is no positive law recognising the capacity in which the association of the two individuals held the lands, the association does not come within the definition of "person". In the result our answer to the question is "No". We direct that a copy of this judgment shall be sent under the seal of the court and the signature of the Registrar to the Revision Board as required by section 24(7) of the U. P. Agricultural Income-tax Act. The question has not be ..... X X X X Extracts X X X X X X X X Extracts X X X X
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