2004 (12) TMI 39

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..... 2. Whether the Appellate Tribunal is right in law in holding that the assessee should be assessed in the status of body of individuals?" The assessment year is 1982-83 and the relevant accounting period is the year ended on June 30, 1981. The assessee filed its return of income in the status of body of individuals (BOI) and the Assessing Officer accepted the same while framing the assessment under section 143(3) on February 29, 1984. The Commissioner of Income-tax initiated revisional proceedings under section 263 of the Act after issuing show-cause notice to the asses-see. The Commissioner of Income-tax did not accept the explanation tendered by the assessee and set aside the assessment order directing the Assessing Officer to adopt the .....

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..... an organised activity jointly carried on to produce income, it was a clear case of a joint business venture of a few individuals entitling the Revenue to assess the said person in the status of association of persons. Though served, there is no appearance on behalf of the respondent-assessee. The Commissioner of Income-tax can exercise jurisdiction under section 263 of the Act, provided the two prerequisite conditions stand satisfied viz., (i) the order of the Assessing Officer sought to be revised is erroneous; (ii) it is prejudicial to the interests of the Revenue. If one of them is absent, i.e., if the order of the Assessing Officer is erroneous but is not prejudicial to the Revenue, or if it is not erroneous but is prejudicial to the .....

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..... s, but claimed that the income was liable to be assessed in the hands of the widow and the three minor children in equal shares. The Department did not accept the contention and assessed in the status of body of individuals. When the matter was carried up to the apex court, it was held that "It did not make any difference that the widow and the minor sons did not start the business. The business was inherited. But the fact that the business has been continued by the widow on her own behalf as well as on behalf of the minor sons after buying the interest of the mother goes to show that there is an organised activity jointly carried on to produce income. It is a clear case of a joint business venture of a few individuals. The income of this b .....

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