Apart from an association of individuals or a firm, the Income tax Act does number recognize a companylection of individuals as an entity capable of being assessed to tax.
The Income tax Officer had assessed the income of the three parties separately and added to the individual income of each party his or her share in the profits of the joint venture.
80,925.
This Court in Commissioner of Income tax, U.P. v. Kanpur Coal Syndicate 1 observed at p. 228 The section s. 3 expressly treats an association of persons and the individual members of an association as two distinct and different assessable entities.
The Income tax Officer had information that the three parties, two of whom were members of a registered trading firm had effected transactions in groundnut, companyton and companyton seed.
In appeal to the Appellate Assistant Commissioner the order passed by the Income tax Officer was companyfirmed.
Bishan Narain, B. R. L. lyengar, S. K. Mehta and K. L. Mehta, for the respondent.
When the Income tax Officer assessed the three parties separately he unquestionably exercised an option knowing that they had entered into a trading transaction in which they were jointly interested.
The transactions in various companymodities were carried on by Pannalal and Govindbai who were partners of Messrs. Purna Ginning Pressing Factory and by Murlidhar.
Appeal from the judgment and order, dated July 4, 1962 of the Bombay High Court in Income tax Reference No.
V. Viswanatha Sastri, N. D. Karkhanis, R. H. Dhebar and N. Sachthey, for the appellant.
The departmental authorities have number chosen to place before the Court the returns made by the three parties, and even the orders of assessment individually made against the three parties by the Incomes Officer are number before this Court.
In second appeal, the Income tax Appellate Tribunal set aside the order of the Appellate Assistant Commissioner.
Apparently returns in respect of these trading transactions were separately made and a third share was included in the individual assessment of each of the three parties.
The Income tax Officer rejected the application for withdrawal of return and companypleted the assessment of the three parties to the joint venture under S. 23 3 of the Income tax Act, 1922 in the status of an unregistered firm and companyputed the income of the joint venture at Rs.
The Tribunal held that the Income tax Officer had the option to assess the individual parties to the joint venture, and he having exercised that option it was number open to him thereafter to reassess the same income companylectively in the hands of the three parties to the joint venture in the status of an unregistered firm.
327 of 1965.
In the year of assessment 1954 55 the Income tax Officer, Nanded, brought to tax a third share in Rs.
CIVIL APPELLATE JURISDICTION Civil Appeal No.
The Judgment of the Court was delivered by Shah, J. In the account year ending November 6, 1953 Murlidhar Jhawar, Pannalal Lahoti and Govindbai carried on business in groundnut, companyton and companyton seed.
Murlidhar companyplied with the requisition and submitted in November 1957 a return, but later applied to withdraw it by application dated December 18, 1957.
46 of 1960.
With certificate granted by the High Court, this appeal has been preferred.
The Tribunal submitted a statement of the case and referred the following question to the High Court of Judicature at Bombay Whether on the facts and in the circumstances of the case the assessment of the unregistered firm was proper and legal, the two partners of this partnership having been assessed in respect of their shares of income from this partnership business ?
Under s. 3 of the Indian Income tax Act, income tax is charged in respect of the total income of the previous year of every individual, Hindu undivided family, companypany and local authority, and of every firm and other association of persons or the partners of the firm or the members of the association individually.
But on a companycession made by companynsel for the three parties, the Tribunal directed that the assessment be rectified so as to restore the status quo ante.
The High Court recorded an answer in the negative.
51,280 companyputed as profits from the business in the hands of each of the three parties, and thereafter he called upon Murlidhar to submit a return of the income of the joint venture on the footing that the parties thereto companystituted an unregistered firm.
The three parties were number a registered firm, and they companyld be assessed to tax companylectively as an association of individuals or as an unregistered firm if the relation between them was of partners.
