Receiver of theatre income not assessable as an association of persons when appointed only to collect and distribute property receipts.

A receiver appointed only to collect theatre income and distribute it among co-owners, without authority to carry on business, cannot be assessed as an association of persons. The hire receipts from the theatre were treated as income from property rather than business income, and the receiver was assessable only in the capacity of an agent or trustee of the individual owners. Assessment of the receiver as a single unit was therefore not sustainable, and the questions were answered against the Revenue and in favour of the assessee.

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Issues: Whether the receiver could be assessed as an association of persons, whether the letting out of the theatre on hire amounted to carrying on business, and whether the assessment on the receiver as a single unit was sustainable.

Analysis: The receiver had been appointed only to realise the income from the theatre and distribute it among the co-owners, and was not authorised to carry on any business. The receipts from hiring out the theatre were therefore treated as income from property and not as business income. In that situation, the receiver was assessable only in the capacity of an agent or trustee of the individual owners, and not as an association of persons.

Conclusion: The assessment on the receiver as an association of persons and as a single unit was not sustainable. The questions were answered against the Revenue and in favour of the assessee.

Final Conclusion: The reference was answered in favour of the assessee, holding that the receiver could not be taxed as an association of persons on the theatre receipts.

Ratio Decidendi: Where a receiver is appointed merely to collect and distribute income from property and is not empowered to carry on business, the receipts from hiring out that property are assessable as property income and the receiver is not taxable as an association of persons.

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