Association of persons requires voluntary common enterprise; a government-imposed trade arrangement lacked that essential element.

An "association of persons" under the Income-tax Act, 1922 requires more than a mere collection of individuals; the members must join together voluntarily in a common enterprise with concerted action and a profit-making purpose. Where participation is compelled by governmental control, and the group lacks real freedom of choice and a stable voluntary composition, the necessary common volition is absent. On the stated facts, the cloth import arrangement was imposed by regulation and the members were brought together without a true consensual venture, so the group did not answer the statutory description. The assessee was therefore not an association of persons and was not assessable in that status.

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Issues: Whether the assessee constituted an association of persons liable to be assessed as such under the Income-tax Act, 1922.

Analysis: The expression "association of persons" was treated as requiring more than a mere collection of individuals. A group would fall within it only if the members had joined together of their own free volition in a common venture, with an element of concerted action and profit-making purpose, so that the group was in the nature of partners. On the facts, the cloth import arrangement was imposed through governmental control, the members had no real choice but to participate if they wished to carry on the trade, and the composition of the group changed during the relevant period. The association therefore lacked the voluntary common enterprise necessary to constitute an association of persons.

Conclusion: The assessee was not an association of persons and was not liable to be assessed in that status.

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