Association of individuals under income tax law requires common purpose and firm-like attributes, not mere co-ownership.

Co-sharers of income-producing property were not treated as an "association of individuals" under Section 3 of the Income-tax Act, 1922 because the expression was construed as covering bodies with a common purpose or firm-like attributes, not every group of co-owners. Mere appointment of collecting agents to receive rent and keep accounts, with some collections made individually and no sufficient common scheme of management, was insufficient to establish such an association. The reference was therefore answered against the Revenue and in favour of the assessee.

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Issues: Whether the co-sharers owning the Khalifa Mandi constituted an "association of individuals" within the meaning of Section 3 of the Income-tax Act, 1922.

Analysis: The expression "association of individuals" was construed in the context of the Act as a whole and was held not to extend to every body of co-owners of income-producing property. The words were treated as ejusdem generis with the preceding concept of a firm or partnership-like body, so that some common purpose or attributes analogous to a firm had to be shown. On the facts, the co-sharers merely appointed collecting agents to receive rent and keep accounts, while collections were sometimes made by individual co-sharers and there was no sufficient common scheme of management or clear collective action by all owners.

Conclusion: The co-sharers were not an association of individuals within Section 3 of the Income-tax Act, 1922, and the reference was answered against the Revenue and in favour of the assessee.

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