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TMI Blog1932 (1) TMI 24X X X X Extracts X X X X X X X X Extracts X X X X ..... to his widow and to his children, the widow getting one-third share and the children getting equally the remaining two-thirds. They do not constitute a joint family but are tenants-in-common of the estate which has not been divided by metes and bounds. Mrs. Saldhana was originally assessed by the Income Tax officer on the basis that the whole of the income accrued to her. She then objected to the assessment and contended that she was the owner of only one-third of the estate and her children were separate owners of shares in the remaining two-thirds and that they may be liable to Income Tax on their shares separately but that she was liable to pay Income Tax only on her one-third share. This contention was upheld and she was accordingly as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Tax referred the following question to the High Court: Where on the facts of this case, a single assessment should be made on Mrs. Saldhana on (1)the entire income derived from the business carried on by her, and (2) the whole of the one-third share of the profits derived by her from the business conducted by her under the style A. J. saldhana and Sons in partnership with other, or whether separate assessments should be made on her and the other heirs on their respective shares of such income. 3. In his letter of reference he expresses the opinion that Mrs. Saldhana and her children constitute at least an association of individuals. 4. In the argument before us it was contended by the learned advocate for the assesses that the ph ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... artly of the property of her children. But whatever that may be, on the ground that she carries on one business she is assessed to Income Tax Under Section 10, Clause 1. Now it is clear that the existence of Section 40 cannot prevent an assessment Under Section 10, Clause 1 if it is otherwise justified. In a case where guardians or trustees do not carry on business but merely receive incomes on behalf of wards or beneficiaries and there is no question of any business being carried on by guardians or trustees it may be that Section 10 will not be available to the Crown and in such a case the incomes of the various minors or beneficiaries cannot be added and each must be separately assessed whether directly or through the guardians or trustee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as one business carried on by an association of individuals within the meaning of Section 3 of the Act. This is the view taken in Hotz Trust of Simla v. Commissioner of Income, tax A.I.R. 1930 Lah. 929. There the business was the business of an hotel in Simla. The original owner died after leaving a trust deed by which the hotel business was to be carried on for the benefit of his children. The children there were tenants-in-common as in this case but it was held that the whole business can be assessed as one business carried on by the trustees on behalf of the beneficiaries. The learned Judges relied on Williams v. Singer 7 T.C. 387 where it was pointed out by Sankey, J., as he then was that Section 41, English Act (corresponding to Sectio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eriving the benefit of the business may be some wards or beneficiaries, or as in this case partly the guardian and partly the minors, the business can be regarded as a business carried on by the trustees or guardian and can be assessed as a single business. This virtually amounts to saying that where the business is carried on by one person on behalf of a number of individuals, the whole group of individuals, on whose behalf the business is carried on can be assessed through the person who carries on the business. 8. It is true that all these considerations will not be available in a case where no business is carried on and the trustees or guardians act as bare trustees or guardians merely receiving the incomes and handing them over to t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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