Tenants-in-common not association of individuals where co-sharers inherit undivided shares and merely manage property jointly.

Persons who acquire undivided shares in property by succession under a will do not form an association of individuals merely because they manage the estate jointly. An association requires a voluntary coming together for a common purpose or enterprise to earn income, profits or gains and share them. On the facts discussed, the son and grandsons took defined undivided shares under the will itself, so their rights arose by succession rather than by combination. Joint management of the estate was insufficient to satisfy the essential ingredients of an association of individuals, and they were treated as tenants-in-common with definite shares.

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Issues: Whether the beneficiaries under the will, who held undivided shares in the estate and managed it together, constituted an association of individuals or were only tenants-in-common.

Analysis: An association of individuals requires a voluntary coming together for a common purpose or common action, with the object of producing income, profits or gains and sharing them. On the facts, the son and grandsons succeeded to defined undivided shares under the will itself; they did not voluntarily combine to form an association for earning and sharing income. Their rights arose by succession under the will, and the joint management of the estate did not, by itself, satisfy the essential ingredients of an association of individuals.

Conclusion: The beneficiaries were not an association of individuals; they were tenants-in-common, each with a definite share. The Tribunal's view was upheld and the revision cases were rejected.

Final Conclusion: The decision affirms assessment on the footing that the co-sharers did not constitute an association of individuals under the Act.

Ratio Decidendi: Persons who acquire undivided shares in property by succession or under a will, and merely manage the property jointly, do not constitute an association of individuals unless they voluntarily join in a common enterprise to produce income and share the gains.

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