LAWS(KER)-1961-2-37

COMMR. OF INCOME TAX Vs. K.P. MOHAMMED

Decided On February 08, 1961
COMMR. OF INCOME TAX Appellant
V/S
K.P. Mohammed Respondents

JUDGEMENT

(1.) Following are the facts necessary for deciding this application, which is under S.66(2) of the Indian Income Tax Act. On November 18, 1954 one Unnikammoo Saheb died, leaving behind as heirs his wife, two sons, and four daughters. On November 27, 1954 the widow and the four daughters executed a power of attorney in favour of the two sons for the future conduct of the management of all the properties and to represent the estate on their behalf. It is not disputed that the properties inherited consist of house property, landed property such as forest lands, vacant sites, and shares in companies. A return of income for November 19, 1954, to May 5, 1955 was voluntarily filed, and the Income Tax Officer made assessment on the heirs as an association of persons. The assessee appealed to the Appellate Assistant Commissioner, and contended that as there was no association, the assessment should be only on the shares of all the legal heirs in their separate hands. The Appellate Assistant Commissioner held that all the heirs formed an association of persons, and were producing the income liable to tax; but he excluded from such assessment house income. The assessees being dissatisfied, appealed to the Appellate Tribunal; and the Tribunal agreed with the Appellate Assistant Commissioner that an association of persons was formed to produce the income, but held that, as no effort was put to procure incomes from shares and the ground rent of vacant sites, these should be excluded from the assessment of the heirs as an association of persons. Thereafter the Department applied for the following legal questions to be referred:

(2.) The learned Government Pleader has urged that consistently with the conclusion of the heirs having formed themselves into an association for managing the estate, part of the estate ought not to be excluded from the assessment of the association. We, however, think the rule covering the question has become well settled by the pronouncement in I. T. Commissioner v. Smt. Indira (AIR 1960 BC 1172 at p. 1173). There the question was whether joint receipt by cowidows of income from deposits and property, constitutes them an association of persons for purpose of assessment to income tax, and S. K. Das J. after observing what constitutes association of persons, has concluded with these words:--