9911796707
TMI Blog1966 (1) TMI 4X X X X Extracts X X X X X X X X Extracts X X X X ..... their joint cultivation ? " One Bhagwati Prasad was the owner of the land in dispute. He granted a lease of 326.1 acres in favour of the assessee, M. L. Bagla, on April 20, 1942, and another lease of 316.3 acres in favour of Puranmal Jaipuria on January 21, 1941. For the Fasli years 1356, 1357, 1358 and 1359, they jointly appointed one person as manager to cultivate the lands of the two leases jointly. The manager cultived the lands of the two leases, maintained one set of accounts of the expenditure incurred over the cultivation of the lands and of the income derived from them and distributed the profits between them in proportion to the areas of their lands. Each of them was assessed separately to agricultural income-tax for the four Fas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as owner, trustee, receiver, manager, administrator or executor or in any capacity recognised by law, and includes an undivided Hindu family, firm or company. " An individual is undoubtedly a person ; two or more individuals are a person if two conditions are fulfilled, (1) that they form an association, and (2) that they own or hold property for themselves or for any other person either as owners or as trustees, receivers, etc. It is not enough that two or more individuals form an association ; they must also own or hold property either as owners or as trustees, receivers, etc. The first question is whether the two persons have formed an association and our answer is " Yes ". They have associated with each other with the object of gettin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... co-widows succeeding as co-heirs to the estate of their deceased husband did not form an association of persons within the meaning of section 3 of the Indian Income-tax Act. "Association of persons " is not defined in the Income-tax Act just as " association of individuals " is not defined in the Agricultural Income-tax Act. S. K. Das J., speaking for the court, referred to the meaning of " association " given in the Oxford Dictionary as to join in a common purpose, or to join in an action " and observed : "An association of persons must be one in which two or more persons join in a common purpose or common action, and as the words occur in a section which imposes a tax on income, the association must be one the object of which is to prod ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ring in section 3 of the Income-tax Act. Kapur J. applied the test laid down in Indira Balkrishna's case. The learned judge observed that "a combination of persons formed for the promotion of a joint enterprise banded together as if they were co-adventurers " constituted an association. He approved of the statement made in Commissioner of Income-tax v. Dwarakanath Harischandra to the effect that " as soon as there was election to retain the property and manage it as a joint venture the persons so electing became an association of individuals." The next question is whether the association of the two individuals own or hold property as owners or in any other capacity recognised by law. As regards owning, it was not seriously disputed that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hether an association of them holds it or not is an inference to be drawn from the established facts. The established facts here are that the two individuals jointly allowed the common manager to cultivate their lands and derive profits from them. They pooled their lands and got them cultivated as if they belonged to only one of them. The manager made no distinction between one piece of land and another piece of land ; he managed them jointly. Only at the time of the distribution of the profits he took into consideration the fact that one owned 316.3 acres and the other 326.1 acres. By pooling their lands together they eliminated the distinction between one holding 316.3 acres and the other holding 326.1 acres ; each allowed the other to ho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eaning of section 2(11) but not they themselves as an association. As there is no positive law recognising the capacity in which the association of the two individuals held the lands, the association does not come within the definition of "person".
In the result our answer to the question is "No".
We direct that a copy of this judgment shall be sent under the seal of the court and the signature of the Registrar to the Revision Board as required by section 24(7) of the U. P. Agricultural Income-tax Act.
The question has not been free from difficulty and we think that the parties should be left to bear their costs themselves. Counsel's fee is assessed at Rs. 100.
Question answered in the negative. X X X X Extracts X X X X X X X X Extracts X X X X
|
