Law:

Section:

Section 4 of the Income-tax Act, 1961 - Association of Person - Assessable as general Whatever object of associating, association has to be voluntary on part of persons forming association; forced association of persons because of inheriting joint property by a will or such other circumstances would not constitute such joint legatees an AOP [In favour of revenue] CIT v. Laxmi Pd. & Sons [2009] 316 ITR 330 (All.) Whatever the object of associating, the association has to be voluntary on the part of the persons forming association. Forced association of persons because of inheriting joint property by a will or such other circumstances not being voluntary would not constitute such joint legatees as association of persons. A will merely stated that during the lifetime of the testator he will remain the owner of all movable and immovable properties and after his death, S and T will become owners of all movable and immovable properties. The will annexed certain obligations to that ownership; Held that the assessee could not be said to be an AOP because of the terms of the will under which the two legatees had inherited the assets of the testator jointly and shares of each legatees were not specified. JUDGMENT The following three questions have been referred having been called by the High Court under section 256(2) of the Income-tax Act, 1961 (in short "the Act"): "1.Whether the Tribunal was correct in the facts and in law in concurring with the order of the first appellate authority holding that M/s. Laxmi Pd. and Sons was an association of persons created in pursuance of the will left by late Laxmi Pd., when there was no specific direction in the will for the creation of any trust. 2.Whether the Tribunal was correct on the facts and in law in concurring with the interpretation of the contentions when on a plain reading of the will the inference drawn is found to be incorrect. 3.Whether the Tribunal was correct in law in concurring with the first appellate authority and holding that part of the unexplained assets found during the course of search belonged to the association of persons styled as M/s. Laxmi Pd. and Sons and ignoring the fact that had these assets…

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