Double taxation of the same business income barred once it was assessed in one permissible mode under income-tax law.

Income from a business carried on by an association of persons could not be assessed again in the hands of the association after that same income had already been determined and taxed in the hands of one member for the same period. Although an association of persons and its members are distinct assessable entities under section 3 of the Indian Income-tax Act, 1922, the charge is on the income itself, not repeatedly on identical income in different assessment modes. Once the department exercised its option to assess one member on the share of income, the same income could not later be brought to tax again in the association's hands.

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Issues: Whether the income from the same business could be assessed again in the hands of the association of persons after it had already been determined and taxed in the hands of one member of that association.

Analysis: Section 3 of the Indian Income-tax Act, 1922 treats an association of persons and its individual members as distinct assessable entities, but the charge of tax is on the income and not repeatedly on the same income. Where the department has already chosen to determine the income of the business and assess one member on his share, that option is treated as exercised for that period and the same income cannot thereafter be assessed again in the hands of the association. The rule against taxing the same income more than once applied, and the later assessment of the association on the same income was impermissible.

Conclusion: The question was answered in the affirmative, in favour of the assessee and against the department.

Ratio Decidendi: Where the same income has already been assessed and charged in one permissible mode under section 3 of the Indian Income-tax Act, 1922, the revenue cannot assess and tax that identical income again in another permissible mode for the same period.

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