Double assessment of the same income is invalid where members were already assessed individually on their shares.

Where the same income had already been assessed in the hands of the individual members, a later assessment on the collective entity for that income was invalid because the statute did not clearly authorise double taxation. The Tribunal treated the earlier individual assessments as showing that the revenue had already proceeded on the footing that the income belonged to the members, so the subsequent entity-level assessments could not stand. On the characterisation of receipts from godowns and oil storage tanks, rental income from owned property generally falls under income from property, but the matter was not finally determined on the facts. Once the assessments were cancelled, the interest question also fell away.

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Issues: (i) Whether the assessments made on the assessee for the relevant assessment years were valid when the constituent members had already been assessed individually on their respective shares of the same income. (ii) Whether the receipts from the godowns and oil storage tanks were assessable as business income or as income from property, and whether interest under the Income-tax Act, 1961 was payable.

Issue (i): Whether the assessments made on the assessee for the relevant assessment years were valid when the constituent members had already been assessed individually on their respective shares of the same income.

Analysis: The controlling principle applied was that, where the statute permits assessment either of the collective entity or of the individual members, the assessing authority cannot tax the same income twice. The earlier individual assessments of the members showed that the revenue had already proceeded on the footing that the income was assessable in their hands. In such circumstances, the subsequent assessments on the collective entity could not stand. The distinction sought to be drawn between the old and the new enactment was rejected in the light of the authorities relied upon, and the assessment records indicated awareness of the shared income position.

Conclusion: The assessments on the assessee for the relevant years were held to be null and void, in favour of the assessee.

Issue (ii): Whether the receipts from the godowns and oil storage tanks were assessable as business income or as income from property, and whether interest under the Income-tax Act, 1961 was payable.

Analysis: Rental receipts from owned property ordinarily fall under the specific head of income from property, even if the property is exploited in a commercial setting. On the material before the Tribunal, the exact nature of the letting arrangements and services, if any, was not fully established, so the question of business income was not finally resolved on merits. As the assessments themselves were cancelled, the claim to interest liability also did not survive independently.

Conclusion: The income-characterisation issue was not finally pressed to a separate operative determination, and no interest was payable once the assessments were cancelled.

Final Conclusion: The impugned assessments were cancelled, the assessee's appeals succeeded, and the departmental appeal failed.

Ratio Decidendi: Where the same income has already been assessed in the hands of the individual members, a subsequent assessment of the collective entity on that same income is invalid unless the statute clearly authorises double taxation.

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