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 years 1944-45 to 1947-48 - 'S' carrying on business of manufacture and sale of beedies died leaving appellant (step son), a widow and four children by her - In a suit for partition filed by appellant in form a pauperis and during pendency of proceedings, two advocates of High Court were appointed joint receivers of properties of deceased by consent of all parties - Joint Receivers continued business from date of their appointment i.e., 17-5-1943 till 25-11-1946, when business was put up for sale by auction and was purchased by appellant - For relevant assessment years, ITO assessed profits of business in hands of receivers as income of an AOP Tribunal as well as High Court upheld order passed by ITO - Whether since business was carried on as one business with Unitary control and by consent of parties, mere fact that a suit was pending at time for administration of estate of deceased or for separation of shares of co-heirs could not affect incidence of taxation and therefore, High Court was right in holding that income was assessable as income of AOP - Held, yes FACTS 'S' who was carrying on the business of manufacture and sale of beedies died leaving behind appellants-his step son, a widow and four children by her. In a suit for partition filed by appellant in form a pauperis and during the pendency of those proceedings two advocates of the High Court were appointed joint receivers of the properties of the deceased by consent of the parties. Thereafter, the widow filed a suit for partition and also applied for continuance of joint receivers. Appellant opposed this application but by an order of High Court, the receivers were ordered to continue and carry on business as before. In due course a preliminary decree for partition was passed. The joint receivers had continued the business from date of their appointed i.e., 17-5-1943 till 25-11-1946, when during course of the proceedings the business was put up for sale by action and was purchased by the appellant. For the relevant assessment years, the profits of…

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