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TMI Blog2006 (5) TMI 85X X X X Extracts X X X X X X X X Extracts X X X X ..... er. P. C. Jain for the assessee. JUDGMENT 1. In terms of direction given by this court in I. T. C. Nos. 80 to 82 of 1997, vide order dated October 14, 1998, the following question of law arising out of common order dated May 14, 1996, in I. T. A. Nos. 709 to 711 (ASR)/1990, passed by the Income-tax Appellate Tribunal, Amritsar Bench, Amritsar (for short "the Tribunal"), for the assessment years 1983-84, 1984-85 and 1987-88, was referred to this court for opinion : "Whether, on the facts and in the circumstances of the case, the learned Income-tax Appellate Tribunal is right in law in holding that the Departmental authorities were not justified in framing the assessment for the assessment years 1983-84, 1984-85 and 1987-88 in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me of Sehgal Oil and General Mills. The Assessing Officer completed the assessments and the matter was agitated by the assessee before the learned Commissioner of Income-tax (Appeals). The learned Commissioner of Income-tax (Appeals) uphold the order of the Assessing Officer and dismissed the appeal filed by the appellant. The matter was adjudicated upon the Income-tax Appellate Tribunal. The Income-tax Appellate Tribunal decided the issue in favour of the assessee and gave finding that the Revenue was not justified in framing the assessments for all the three years in the name of Sehgal Oil and General Mills as association of persons because no such association of persons was in existence." 3. It is further evident from the reply filed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... association of persons (AOP) or not, the principles have been laid down in the judgment of the hon'ble Supreme Court of India in CIT v. Indira Balkrishna [1960] 39 ITR 546, which was followed in G. Murugesan and Brothers v. CIT [1973] 88 ITR 432 (SC). Counsel has further stated that these principles still hold the field and have not been disturbed by the apex court. The relevant part of the judgment in G. Murugesan and Brothers v. CIT [1973] 88 ITR 432 (SC) is extracted below (page 437) : "For forming an 'association of persons', the members of the association must join together for the purpose of producing an income. An ' association of persons' can be formed only when two or more individuals voluntarily combine together fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. Leader Valves P. Ltd. was not even actually received either by the assessee-firm/association of persons or the alleged partners of the assessee. 8. From the facts found by the Tribunal it is evident that after the death of Sh. D. D. Sehgal there was no act of volition on the part of the rest of the partners of the respondent, to continue with a common purpose to produce income, profits and gains. In the absence thereof, the principles laid down in the judgments of the hon'ble Supreme Court of India in CIT v. Indira Balkrishna [1960] 39 ITR 546 and G. Murugesan and Brothers v. CIT [1973] 88 ITR 432 are not satisfied and the respondent cannot possibly be termed as an association of persons. 9. In view of our above discussio ..... X X X X Extracts X X X X X X X X Extracts X X X X
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