Law: Income Tax Act, 1961

Section: 256

(a) Income tax---Assessment Status of assessee Assessee showing her status as "body of individuals" while filing return It does not debar her from claiming during the assessment proceedings or even later that the status should be a different one, i.e. as "an individual". (b) Income tax Status of assessee Body of individuals Assessee authorised to manage common property of erstwhile taward, by partition deed Income received by assessee, from such property cannot be assessed in capacity of 'body of individuals." In order to constitute "an association of persons" persons must join in a common purpose or action and the object of the association must be, to produce income. It is not enough that the persons receive the income jointly. The word "body of individuals" occurring in relevant provision alongside "association of persons" should be understood in the said background and context. Thus, where the assessee authorised, as per the partition deed, by all the members of the joint family to manage the common property, a thick forest of the erstwhile tarwad, which had not been divided by metes and bounds and the assessee had shown in the return amounts received from such property, as earned in the status of 'body of individuals, and before the assessing authority, the assessee claimed that no assessment could be made in the status of "body of individuals" since each member of the erstwhile tarwad had 1/18 share in the property, it was held that the status of the assessee in such case could not be a body of individuals and the individual members could be assessed directly regarding the capital gains. 121 ITR 985 (Ker. ); 121 ITR 684 (Mad.) , 120 ITR 564 (Pb. & Har.); (1977) 106 ITR 494; AIR 1973 SC 1461; 106 ITR 111 (Andh. Pra.); 82 ITR 828 (SC); (1967) 2 All ER 576; AIR 1960 SC 1172; (1958) 1 All ER 205; AIR 1955 SC 604; (1954) 5 STC 348 (Trav Co); (1948) 2 All ER 995; (1920) 1 KB 773 and (1867) 36 LJQB 81. JUDGMENT PARIPOORNAN, J. At the instance of the Commissioner of Income tax, Kerala II, Ernakulam, the following two questions of law have been referred to this Court under section 256 (2). I. T. Act, 1961. The assessment years concerned are 1969 70 and 1970 71…

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