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TMI Blog1968 (5) TMI 10X X X X Extracts X X X X X X X X Extracts X X X X ..... hereafter, the benefits of the agreement with the said cotton mills were transferred to the present applicants, Sunil Krishna Paul and Amar Krishna Poddar, by a deed of assignment dated the 10th December, 1951. The deed of assignment was executed by Anil Krishna Paul and the legal heirs of Jogendralal Nandy. As consideration for the assignment the applicants had to pay a sum of Rs. 50,000. Thereafter, on August 9, 1954, the two assignees, Sunil Krishna Paul and Amar Krishna Poddar, entered into an agreement of partnership to share the aforesaid commission. For the assessment year 1959-60 the assessee-applicants, viz, Sunil Krishna Paul and Amar Krishna Poddar, claimed before the Income-tax Officer that their status should be taken as that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ded by this court in Sunil Krishna Paul's case. So far as the second contention is concerned, the Appellate Tribunal has upheld the conclusions of the Appellate Assistant Commissioner. In these premises, the following question has been referred to us : " Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the assessment made on the two appellants in the status of an association of persons is legal and valid in law ?" Mr. Somnath Chatter ee, learned counsel for the assessee, has argued that a mere association for the purpose of acquisition of a property, which produces income, is not sufficient to make the persons concerned an " association of persons " within the meaning of the Income-ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in any event, the assessees were rightly assessed as owners of the said properties under section 9(1) of the Act. Beaumont C.J., in this case, expressed the view that the words " association of individuals" in section 3 of the Indian Income-tax Act must be construed in their plain and ordinary meaning. They are not ejusdem generis with the word immediately preceding, viz., " firm ". The only limit imposed on the words is such as necessarily follows from the fact that the words appear in an Act imposing a tax on income, profits and gains, so that the association must be one which produces income, profits or gains. The next case on which Mr. Chatterjee relied was In re Dwarkanath Harischandra Pitale. This is also a decision of the Bombay H ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Supreme Court and the Supreme Court's decision is Commissioner of Income-tax v. Indira Balkrishna. Reference was then made to an observation of the Patna High Court in Kumar Taranand Sinha v. State of Bihar B. The Patna High Court has observed that, to constitute an association of individuals, there must be present not merely co-ownership but also other indicia of joint enterprise there must be a combination of persons for promotion of a joint enterprise banded together as co-adventurers. Mr. Chatterjee submits that the evidence of this joint enterprise is lacking in the instant case. Our attention was then drawn to Commissioner of Income-tax v. N. V. Shanmugam Co. The Madras High Court at page 708 observes : " It is clear from th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Annapurna Cotton Mills Ltd., with which we are concerned in the present reference, accrues or arises or is produced to the assessees by virtue of (a) a deed of assignment, and (b) a deed of partnership. That is to say, the two assessees have combined in joint action in obtaining or securing the income and in sharing it between themselves. This joint venture on their part is further borne out by the fact that they have been jointly incurring expenses for earning the commission and these expenses have been claimed by them in their income-tax returns and have been duly allowed. We find from page 8 of the paper-book that in the assessment year 1959-60 the following expenses were allowed : Rs. 1. Conveyance 249 2. Salary 3,600 3. Po ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , ordinary meaning. There is no difficulty about the word 'individuals'. 'Associate' means, according to the Oxford Dictionary, 'to join in common purpose, or to join in an action'. Did these individuals join in a common purpose, or common action, thereby becoming an association of individuals ? In my view, they did. In the first place, they joined together in the purchase of this property on the 9th January, 1920. In the second place, they have remained joint as co-owners of this property from the date of the purchase down to the present time. Thirdly, they have joined together, as the powers of attorney show, for the purpose of holding this property and of using it for the purpose of earning income to the best advantage of them all. Under ..... X X X X Extracts X X X X X X X X Extracts X X X X
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