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Section 4 of the Income-tax Act, 1961 - Association of person - Assessable as - Assessment year 1964-65 - Income-tax authorities duly assessed business carried on by a firm and an individual as joint venture and, respective shares had also been assessed in hands of firm and individual - Whether in aforesaid circumstances, subsequent assessment made on firm as well as individual in status of association of persons was invalid - Held, yes FACTS A partnership firm, had entered into a contract with one 'A' to carry on the business of import/export, the latter having a half share. This was claimed to be a joint venture which was also accepted by the income-tax authorities in the earlier years and the respective shares were assessed in the hands of the firm as well as 'A' separately as shares from a joint venture. In the assessment year 1963-64, the ITO held that it was not a case of joint venture as regular business had been carried on from 1951 to 1965. Being of the opinion that it was a case of association of persons between the firm and 'A', the ITO made assessments on the association of person. The AAC cancelled the assessments accepting the assessee's contention that the income earned by the firm and 'A' had already been assessed in their individual hands much earlier than the date when it was assessed in the hands of the association of persons and, therefore, the assessment made on the association of persons was illegal. The Tribunal confirmed the order of the AAC. On reference : HELD The Tribunal was right in holding that the assessment made on the assessees in the status of an association of persons was invalid. Note: The case was decided in favour of the assessee. CASES REFERRED TO CIT v. Murlidhar jhawar and Puran Ginning and Pressing Factory [1966] 60 ITR 95 (SC), CIT v. N.M. Raiji [1949] 17 ITR 180(Bom.), CIT v. Scindia Steam Navigation Co. Ltd. [1961] 42 ITR 589 (SC), K.J. Joseph v. ITO [1980] 121 ITR 178 (Ker.) andRamanlal Madanlal v. CIT [1979] 116 ITR 657 (Cal.). JUDGMENT Sudhindra Mohan Guha, J.-This reference at the instance of the Commissioner of Income-tax, West Bengal-II, under s. 256(1) of the I.T. Act, 1961, relates to the assessment year…

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