TMI Blog1988 (1) TMI 31X X X X Extracts X X X X X X X X Extracts X X X X ..... respective share of income ? " The assessment years in question are 1975-76, 1976-77, 1979-80 and 1980-81. The assessees are the children of late C. Ramankutty Nair who died on May 3, 1971. He was the sole proprietor of a gold business. He left behind him his widow, 4 sons, of whom three were minors, and six daughters, among whom one was a minor. The mother and the daughters executed a deed of relinquishment on May 22, 1971, giving up all their rights in the business. The Income-tax Officer, for the assessment years in question, treated the sons as an association of persons. He rejected the contention of the assessee that they were not members of an association, but only co-owners of the business and as such were liable to be assessed as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tled to the income therefrom and liable for its losses, if any, but assessable only as individuals and not as an association of persons. Lindley in his treatise on the Law of Partnership (15th Edn., p. 81) says: "When, however, co-owners of property employ it with a view to profit, and divide the profit obtained by its employment, the difference, if any, between them and the partners becomes very obscure. The point to be determined is whether, from all the circumstances of the case, an agreement for a partnership ought to be inferred; but this is often an extremely difficult question." A commercial adventure of co-owners of assets with a view to obtaining and dividing the profits among them ordinarily assumes the characteristic of a p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing that...... these four persons did constitute an 'association ..........'." These observations show that wherever individuals employ their assets in a joint enterprise with a view to make profit, though not as partners, they constitute an association of persons by reason of their common purpose or common action. In such an enterprise, the distinction between a firm and an association of persons may often be thin and sometimes very obscure. The fact that all but one of the sons in this case were minors is of no objection when consent to carry on the business together was granted on their, behalf by their guardian. When the mother and the daughters relinquished all their rights in the business by a registered document and the sons toge ..... X X X X Extracts X X X X X X X X Extracts X X X X
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