Duplicate assessment of joint venture income is impermissible once the Revenue has validly taxed individual participants.

Income-tax law treats an association of persons and its individual members as separate assessable entities, so the Revenue may proceed against either but not both for the same income. Where joint venture income had already been assessed in the hands of the individual participants, and the assessing authority had knowingly elected that course, the same income could not later be assessed again as income of an unregistered firm. The reference to provisional assessment did not assist the Revenue because the assessment was not made under the statutory provision for provisional assessment. The assessment of the unregistered firm was therefore not proper or legal.

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Issues: Whether the same income of a joint venture could be assessed first in the hands of the individual participants and thereafter again in the status of an unregistered firm.

Analysis: Section 3 of the Income-tax Act treats an association of persons and its individual members as separate assessable entities, and the taxing authority may proceed against either, but not both in respect of the same income. The income from the joint transactions had already been brought into the individual assessments of the participants. On the materials, the assessing authority was aware of the relevant facts and had exercised its choice to assess the income individually. Once that course was adopted, the same income could not be re-opened and assessed again collectively as income of an unregistered firm. The reference to provisional assessment did not assist the Revenue because the assessment was not one under the statutory provision for provisional assessment.

Conclusion: The assessment of the unregistered firm was not proper or legal, since the same income had already been assessed in the hands of the individual participants.

Ratio Decidendi: Where the taxing statute treats alternative assessable entities separately, the Revenue may assess the same income in one capacity only and cannot subject it to duplicate assessment by later proceeding against another capacity once the first valid choice has been made.

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