TMI Blog1935 (7) TMI 20X X X X Extracts X X X X X X X X Extracts X X X X ..... o convey the said property or any part thereof to such person or persons as the said Benjamin might direct and Benjamin is now the owner of the onethird share originally belonging to Rachael Bekhor. By another deed of 1920, a copy of which is appended and marked (C) the three other joint owners, that is, Capt. E.V. Sasson, Rachael Bekhor and A.J. Raymond appointed B.N. Elias their Attorney for the purpose of managing this property, collecting rents and doing generally on their behalf all such acts in or about the pre mises as they themselves could or might do if personally present and by a subsequent deed dated 14th January, 1924, a copy of which is appended and marked (D), B.S. Benjamin gave a similar power to the said Elias. 3. The Income Tax Officer in these circumstances made an assessment on these four persons as an Association of Individuals in respect of the income derived from this property in the previous year. The assessee's contention before that officer as well as before the Assistant Commissioner on appeal and before me in his applica tion under section 66(2) of the Act is that individual assessments should have been made on the owners of this property separatel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aning in that light. The association of a Hindu undivided family arises from status and not from contract, while a firm arises from contract and not from status and further while a company is an entity having a legal existence as distinct from the individual members of the company, this is not the case with the other two forms of associations referred to. In my view, therefore, the expression other association of individuals cannot be limited in its meaning either only to such associations as are the result of some contract between its individual members or to those associations where the combination results in creating a distinct and separate legal entity. In my respectful opinion, the expression would mean and include a combination of individuals for some common purpose. The convenient, more efficient and more profitable management of property would certainly be a purpose for which such a combination could exist so as to fall within the expression used. To put the case in another way, an association of individuals is the relation between two persons who have agreed to share the income or profits of the property acquired and managed by all or any one or more of them on behalf of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the property, the income derived therefrom will not fall within Section 9 of the Act read with Section 6(iii), but in that case it will fall under Section 6(vi) and would have to be assessed under Section 12 of the Act. JUDGMENT DERBYSHIRE, C.J.- This matter arises out of a statement of case under the Indian Income Tax Act, 1922, Section 66, by the Commissioner of Income Tax of Bengal. For the year of assessment 1933-34, the Income Tax Officer, for District III(1) made an assessment in respect of certain property in Calcutta, called the Norton Buildings. In the assessment the name of the assessee was stated to be B.N. Elias for self and for B.S. Benjamin, Sir Victor Sassoon and A.J. Raymond, 19-D, Bowbazaar Street. Status (whether individual, registered or unregistered firm, Hindu undivided, family, company or other association of individuals). Association of individuals. Sources of income with exact nature of business-House property. It was stated that the members of the association have the following interest. B.N. Elias-One-third, B.S. Benjamin-One-third, Sir Victor Sassoon-One-sixth and A.J. Raymond-One-sixth. The income returned was ₹ 68,209. On that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... b Raymond jointly and severally do and each and every of us doth by these presents make, constitute and appoint the said Benjamin Nissim Ellias our true and lawful attorney for us and in our name or for and in the name of any of us- 1. To conduct and manage all and singular our affairs in relation to lands, messuages and tenements of which we are or any of us is now jointly or severally seized or possessed or of which we or any of us may hereafter be jointly or severally seized or possessed at Calcutta. 2. For the purpose aforesaid to demand, recover and take possession of all and singular the lands, messuages, tenements now belonging or which may hereafter belong to us or any of us absolutely or by way of legal or equitable mortgage or in which we have or any of us has a beneficial interest either along or jointly with others and to view the state thereof and to give proper notices and directions for repairing the same and to oversee, let, sublet and manage the same. 3. To pay or allow all taxes, rates, charges, expenses and outgoing due and payable or to become due and payable for or on account of the said lands and immovable properties. 4. To contract with any perso ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion of deeds, assurances, contracts or other instruments and there and then or at any time thereafter to present for registration and register or cause to be registered this Power of Attorney and any deed or document executed hereunder and answer such enquiries, make such acknowledgments and sign such papers and documents as may be necessary and also to do and execute such further acts and things as may be deemed expedient for registering or otherwise giving validity according to law to any deed or deeds or instrument or instruments which may be necessary for effectuating any act empowered by these presents. On the 14th January, 1924, Mr. B.S. Benjamin executed a similar power of attorney appointing Mr. B.N. Elias, his attorney in Calcutta. The property, we are told, has been managed by Mr. Elias from the date of his appointment down to the present time, in accordance with those powers of attorney. Previous to the year 1933-34, the Income Tax Officer had not assessed the owners of this property as an association of individuals . The question that we have to decide is whether the petitioners, Mr. Elias, Mr. Benjamin, Sir Victor Sassoon (as he now is) and Mr. A.J. Raymond const ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hip, but I think we may say that if association is intended to denote something different from a company or partnership, it must be judged by its two companions between which it stands, and it must denote something where the associates are in the nature of partners. It seems to me (not that I think it material) that it might have been intended to hit the case which we have frequently seen, of a number of persons or a number of firms joining themselves together for the purpose of carrying on a particular adventure in order to make gain by it . Then he goes on to describe instances of that. In my view these persons have joined themselves together and remained joined together for the purpose of buying, holding, and using that property Norton Buildings In order to make gain by it. In so doing they have become and were, at the time of this assessment an association of individuals within the meaning of Section 3 of the Indian Income Tax Act. Three specific questions were put before this Court for answer in the statement of case by the Commissioner of Income Tax. They are as follows:- (1) Whether in view of the circumstances of this case the petitioners constituted an assoc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rve the conjunction and sequence of the descriptive words in both these sections. As my Lord has already pointed out, these sections were amended by the Act of 1924. By Section 3 of that Act and by Section 7 of that Act the words as they originally stood in Section 3 and in Section 55 were transposed and the expression association of individuals was interpolated into the sections. It is of considerable significance, in my opinion, for our present purpose that as Section 55 now stands the expression other association of individuals immediately follows the expression unregistered firm the whole sentence being There shall be charged, levied and paid for that year in respect of the total income of the previous year of any individual, Hindu undivided family, company, unregistered firm or other association of individuals not being a registered firm an additional duty of income tax in this Act referred to as super tax. Mr. Banerji was at very great pains to demonstrate to us that the combination of individuals with which we are concerned could not properly be described as partnership and he emphasised the fact that they were co-owners of the property which is known as the Norton ..... X X X X Extracts X X X X X X X X Extracts X X X X
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