COMMISSIONER OF INCOME TAX Vs. LAXMIDAS DEVIDAS

JUDGEMENT

(1.) THE Commissioner finds as a fact that the assessees in the year of assessment joined together in purchasing certain immoveable properties in Bombay, contributing the purchase moneys in equal shares, that the properties were managed by or on behalf of such owners, and such management resulted in certain profits or gains. One of the assessees was a minor during the year of assessment, and he contracted through his father and natural guardian.

(2.) THE short question is, whether when two persons associate together for the purpose of buying property and managing it so as to produce income they are an association of individuals within Section 3 of the Act. Now, Section 3 imposes a tax in respect of all income, profits and gains of the previous year of every individual, Hindu undivided family, company, firm and other association of individuals. I agree with the view expressed by the Calcutta High Court in In re B. N. Elias, I.L.R. 63 Cal. 538, that the words association of individuals have to be construed in their plain, ordinary meaning. In that case, the Court was dealing with an association of three individuals, who had combined together to purchase various properties which they proposed to manage for the purpose of making profits, and those three individuals were held to be an association of individuals within the meaning of Section 3. I think the principle of that case must apply equally where the association consists only of two individuals and there is a single property which is managed and produces income.

(3.) THE first question raised is :