9911796707
TMI Blog1989 (10) TMI 21X X X X Extracts X X X X X X X X Extracts X X X X ..... e two Parsi ladies, assessees under the Income-tax Act. One of them died during the pendency of the reference in this court in August 1989. Her legal heirs, already in the party array, have been recorded as her legal heirs, by accepting the memo filed by the Revenue dated September 26, 1989. The matter relates to the assessment year 1969-70. The assessees are sisters of one Pestonji Dalal who had considerable properties. Shri Dalal made a will on September 30, 1954. He died in 1955. The will was probated in 1956. The administration of the estate was completed and the executors of the estate released in 1963. The property inherited by the two sisters consisted of house properties, shares, fixed deposits and certain forest lands in Malabar a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ounsel for the assessees submitted that from the mere fact that the assessees leased out forest lands and received the income therefrom, it cannot be said that the assessees constituted an "association of persons Counsel submitted that in order that the co-owners should be considered to be an association of persons, the members of the association must join together for the purpose of producing income ; the members should voluntarily combine together for the said purpose and that volition on the part of the members of the association, in that behalf, is essential. The mere fact that the assessees jointly owned one or more assets and jointly received the income therefrom is neither sufficient nor conclusive to hold that the assessees should b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hem. It also observed that no details relating to the manner in which the forest land was being enjoyed earlier was available. Finally, the Tribunal concluded thus : "....We are inclined to take the view that the assessees will not constitute themselves as an association of persons merely because they leased out the forest land. Leasing out of forest lands and agricultural lands is normal method of enjoying the land. In fact, much more concerted action by the two heirs would have been required if they were to manage the forest lands directly to exploit the same. Leasing out the forest land will be a method of collecting the income with the least amount of trouble and organisation. It will, therefore, be a case of the assessees just continu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... join together for the purpose of producing an income. An I association of persons' can be formed only when two or more individuals voluntarily combine together for a certain purpose. Hence, volition on the part of the members of the association is an essential ingredient. It is true that even a minor can join an 'association of persons' if his lawful guardian gives his consent. In the case of receiving dividends from shares, where there is no question of any management, it is difficult to draw an inference that two or more shareholders function as an 'association of persons' from the mere fact that they jointly own one or more shares, and jointly receive the dividends declared. Those circumstances do not by themselves go to show that they a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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