Law:

Section:

Section 4 of the Income-tax Act, 1961 [Corresponding to section 3 of the Indian Income-tax Act, 1922] - Association of Persons - Assessable as - Assessment year 1948-49 - Whether in order to assess assessees in status of an AOP, there must be some evidence of a joint venture or there must be something to show that income was result of some joint effect or a joint business - Held, yes - Whether in absence of any admission on part of assessees or proof that they had carried on any business jointly, there could be no adverse inference against them merely because of non-production of account books - Held, yes FACTS Department received information from the Registration Office to the effect. The petitioners, the four brothers of a Mohamedan family had purchased a house for Rs 25,000. Thereupon the ITO started the assessment proceedings and asked the petitioners, to explain the source of this income. It was explained that all these four brothers had contributed, though unequally, to the consideration for the purchase of this house. Since one of these brothers, was a student at the time of the assessment, the ITO rejected the explanations given by the four brothers and held that the amount was income of four brothers. The ITO, assessed the brothers in the status of AOP in the current assessment year. On appeal the AAC as also the Tribunal upheld the order of the ITO. On reference: HELD It is established that the jurisdiction of this Court under provisions of section 66(2) does not extend to setting aside findings of fact arrived at by the Tribunal, or to in any manner interfere with findings of fact provided that there be some material in support of that finding of fact. The other ground of interference by this court is that in coming to a finding of fact the Tribunal has committed an error of law. It was true that the ITO had said in his order that out of the four brothers, three of them had been carrying on extensive business, some in tobacco and some in sweetmeat. That, however, did not show that these brothers were carrying on those businesses at different place as members of an association. There was no admission or proof that the petitioner had carried on any…

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