Law: Income Tax Act, 1922

Section: 3

Income-tax--Association of persons-Assessee's share of income from business conducted by an association of persons included in his separate assessment-Assessment of association of persons in respect of the same business for the same year-Whether proper. J and D conducted as an association of persons two businesses TVS and TG. In the assessment of J, the Income-tax Officer included his share of the income from the business TVS. Thereafter, the Income-tax Officer assessed for the same year the association of persons in respect of the two businesses. On appeal, the Appellate Assistant Commissioner deleted the income from TVS in assessing the income of the association of persons and this order was confirmed by the Appellate Tribunal. On a reference to the High Court: Held, that the Tribunal was justified in deleting the income from TVS. The Department has to elect whether for a particular income of the association, it should charge the association itself treating it as one entity or each of the persons constituting the association separately for the share of the income of the associa tion in his hands; once the election is made and the option is exercised for the assessment of income for a particular period in a particular manner, it is not open to the department to assess the same income in a different manner.                                                                                                                     JUDGMENT NARAYAINA PILLAI, J.-In this reference made by the Income tax Appellate Tribunal, Madras Bench, the question referred is: "Whether, on the facts and in the circumstances of the case, the Tribunal was justified in deleting the income from the Trichur Vegetable Stores ?" The facts are as follows: Two persons, P. P. Johny and P. P. Devassikutty, constitut ed an "association of persons". This association conducted two businesses…