Association of individuals under income tax law covers joint owners managing property for income, with property assessed as a whole.

Two persons who jointly acquired and managed property to earn income were treated as an association of individuals under Section 3 of the Indian Income Tax Act, 1922. The plain meaning of that phrase was applied, and the narrower ejusdem generis argument was rejected because the statutory context covered income-producing combinations. For assessment under Section 9, the property was treated as a whole, not as undefined fractional shares, so the association was regarded as the owner for property-income assessment. The minority of one co-owner did not change the factual position or prevent assessment, because ownership and association in fact remained decisive.

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Issues: (i) whether two persons who jointly acquired property and managed it for income were an association of individuals under Section 3 of the Indian Income Tax Act, 1922; (ii) whether such association was the owner of the property and assessable under Section 9 of the Indian Income Tax Act, 1922; (iii) whether the minor status of one co-owner affected assessment.

Issue (i): whether two persons who jointly acquired property and managed it for income were an association of individuals under Section 3 of the Indian Income Tax Act, 1922

Analysis: The expression "association of individuals" was held to bear its plain and ordinary meaning. A combination of persons who unite to acquire property and manage it so as to produce income falls within the statutory phrase. The ejusdem generis argument was rejected because the general words in Section 3 were not to be confined by the characteristics of the immediately preceding word "firm", and the statutory setting required a broader meaning suited to income-producing associations.

Conclusion: Yes. The joint owners constituted an association of individuals.

Issue (ii): whether such association was the owner of the property and assessable under Section 9 of the Indian Income Tax Act, 1922

Analysis: Section 9 was applied to the property as a whole on the footing that the annual value is the value of the property in its entirety, not of undefined fractional shares. Since the property was owned in equal shares by the two persons and was held for deriving income, the association was treated as the owner for assessment purposes.

Conclusion: Yes. The association was the owner and was rightly assessed under Section 9.

Issue (iii): whether the minor status of one co-owner affected assessment

Analysis: The minority of one participant did not alter the factual position that both persons were associated in acquiring and owning the property. The legal effect of the purchase contract was treated as immaterial to the assessment issue, which turned on ownership and association in fact.

Conclusion: No. The minor's status did not prevent assessment.

Final Conclusion: The joint ownership and management of property for the purpose of earning income brought the assessees within the charging provisions as an association of individuals, and the property was assessable in their hands as owners.

Ratio Decidendi: Persons who jointly acquire and manage property to earn income may constitute an association of individuals under the charging provision, and property held and managed in that way is assessable as a whole under the property-income provision notwithstanding minority of one co-owner.

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