COMMISSIONER OF INCOME TAX Vs. SHARADAPRASAD MOTILAL

JUDGEMENT

(1.) THE applicant-Revenue has filed this application under Section 256(2) of the Income-tax Act, 1961 (for short "the Act"), seeking a direction to the Tribunal to state the case and refer the questions, as extracted below, arising out of the order dated October 25, 1993, passed in I. T. A. No. 206/Ind of 1993, after rejection of the application, presented under Section 256(1) of the Act, and registered as R. A. No. 23/Ind of 1994, on September 26, 1994, for the assessment year 1987-88 :

(2.) BRIEFLY stated, the facts of the case are that a plot of land was taken on lease by Shardaprasad, his wife, Smt. Janakdulari, and his two minor sons by a registered lease deed dated July 1, 1993. On that plot a house was constructed. These four persons thus became co-owners. The income from the said property was assessed in the hands of Shri Shardaprasad to the extent of his share in the property, i.e., 50 per cent. The two sons are Devendrakumar and Yogendrakumar. The income from the said property was also assessed in the hands of Devendrakumar in the same manner vide assessment order dated March 20, 1981, for the assessment year 1987-88. Similarly, the income from the said property for the assessment year 1983-84 was assessed in the hands of the aforesaid four co-owners individually to the extent of their shares. The Assessing Officer issued notices under section 148 of the Act for the assessment years 1979-80 to 1987-88 in the status of association of persons (AOP) and assessments were completed in this status. On appeal, the order of the Assessing Officer was confirmed by the Commissioner of Income-tax (Appeals). The Tribunal, however, found that there was no evidence of formation of an association of persons and, therefore, it was not correct to assess in the hands of the association of persons. The Tribunal also noticed that one of the alleged members of the association of persons was already assessed to tax and, therefore, the income was not liable to be assessed again in the status of association of persons. I.T.A. No. 206/Ind of 1993, filed by the non-appli-cant/assessee, was allowed by a common order dated October 25, 1993. The applicant-Revenue filed the application under Section 256(1) of the Act, which was dismissed. This application was, thus, filed under section 256(2) of the Act.

(3.) IN CIT v. INdira Balkrishna [1960] 39 ITR 546, the apex court has held that there should be definite acts of management on the part of members to hold that there was an association of persons liable to assessment.