Association of Persons requires concerted income-producing activity; joint lottery ticket purchase alone is insufficient for separate tax assessment.

Mere joint purchase of a lottery ticket does not, by itself, create an Association of Persons for income-tax purposes. The decisive factor is whether the persons acted together with a common purpose or concerted activity to earn income; where the prize depends wholly on chance and there is no organised venture, common management, or income-producing collaboration, AOP status is not attracted. The lottery winnings were therefore assessable separately in the hands of the individuals, and assessment as an Association of Persons was not permitted.

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Issues: Whether winnings from a lottery ticket jointly purchased by two persons could be assessed in the status of an Association of Persons.

Analysis: Mere joint purchase of a lottery ticket does not, by itself, establish that the purchasers associated together for the purpose of earning income. The decisive element is a common purpose or concerted activity directed towards producing income. Where the prize depends wholly on chance and there is no organised activity, common management, or commercial venture undertaken to earn the winnings, the status of Association of Persons is not attracted.

Conclusion: The assessment could not be made in the status of an Association of Persons, and the income was to be assessed separately in the hands of the individuals.

Final Conclusion: The departmental appeal failed and the order directing individual assessment of the lottery winnings was sustained.

Ratio Decidendi: Joint ownership or purchase of a lottery ticket, without concerted activity to earn income, does not constitute an Association of Persons for income-tax assessment purposes.

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