TaxTMI 
TaxTMI 
1993 (12) TMI 104
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....le to marry three daughters of Sitamma and her only son. Besides this, they were able to save an amount of Rs. 50,000. With the said amount, and in partnership with one Paddaboina Rama Dasu, they began construction of a cinema hall by the side of a canal in Burada Raghavarapuram, in the land owned by Smt. Sitamma. Construction of the cinema hall was not yet completed by 6-5-1956, on which date Sitamma executed an unregistered will bequeathing her property described as 'self-acquired property'. A copy of the will is filed before us. In the said will, it is described that after the death of the testator, Sitamma her son Venkatadri, his two wives, viz., Laxmikanthamma and Padmavathamma, and their daughters born to Venkatdri and Padmavathamma, viz. Chandrakala, Sesbaratnamma and Baby Sarojini, and the subsequent issues of Venkatadri, are all entitled equally in the cinema hall belonging to Sitamma. It is made very clear in the will that it is not permissible for Venkatadri to enjoy the cinema hall to the exclusion of others. All legatees should equally enjoy the property, while carrying on business in it. (b) By the date of the execution of will, Sitamma was aged 80 years. It is state....
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....direct the 1st defendant, Venkatadri, to pay the plaintiff, her due share. The clauses in the decree are important and hence, those that are felt to be important, are extracted hereunder:--- "(1) That the plaintiff and defendants 2 to 5 have each 16 paise share and the defendant No. 1 has 20 paise share in a rupee in the partnership firm; (2) That the Projector, generator, the electrical fittings of the cinema hall are not the self-acquisition of the defendant No. 1 and that the plaintiff is entitled to a share in them; (3) (4) That the rent realised on the cinema hall by the defendant No. 1 during his management was only Rs. 50 per day; (5) That it is declared that the plaintiff has received from the defendant No. 1 profits due to her from 22-3-1966 to 28-2-1968; (6) That it is declared that the suit cinema hall constitutes the property of co-ownership of the parties to the suit but does not constitute an asset of the partnership; (7) (8) That the partnership between the plaintiff and the defendants shall be deemed to have been dissolved as and from 27-9-1974." From the above, it is very clear to our minds that the partnership firm constituted by all the legatees under th....
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....bsp; Rs. 77,508 1977-78 Rs. 1,10,219 1978-79 Rs. 88,564 It was ascertained from the Commissioner that as per the conditions of auction, rates, taxes and other expenses for running the theatre were to be borne by the lessees themselves. According to him whatever amount was credited to the court is the net income. (g) For assessment year 1977-78, assessee did not file any return whatsoever. The ITO, therefore, issued notice under section 148. As per xerox copy of the order-sheet file....
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.... them up for decision. Thus, the status as well as the levy of interest are the two common grounds which arise from out of these three appeals. 4. We have heard Shri K.S. Viswanathan, learned advocate for the assessee and Shri K. Vasanth Kumar, learned departmental representative. Firstly, let us take up the question of status. According to the revenue, the status of the assessee was rightly determined as 'Body of Individuals' by the Assessing Officer, and the same was rightly confirmed by the Dy. Commissioner (Appeals) and, so it should be confirmed, whereas according to Shri K.S. Viswanathan, learned counsel for the assessee, ingredients required to treat the assessee as 'Body of Individuals' were never present and hence the determination of the status of the assessee as 'Body of Individuals' is wrong both under law as well as on facts. 5. The term 'Body of Individuals' was never obtaining under the Indian Income-tax Act, 1922 and it was a legal term for the first time introduced in the Income-tax Act, 1961. No definition of 'Body of Individuals' was found given in the Income-tax Act, 1961. It should be found out only from the decided case-law. The ingredients of the term 'Body....
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.... comprised in the 'Body of Individuals' are co-legatees under the will of Smt. Sitamma. Even though all of them carried on business of exhibiting cinematographic films in the said theatre, they never brought the cinema theatre as such into the partnership firm. The partnership is confined only to the exhibition of cinema films. Their business did not touch either the ownership of the cinema hall or its management. The returns derived from the cinema hall as such did not part-take the business of the firm, and it always used to be kept out of the business of the firm. Further, due to serious disputes between the parties, they sought dissolution of the firm, and the dissolution was granted on and from 27-9-1974, i.e., the date on which the suit was filed for dissolution of partnership and rendition of accounts. That means, from 27-9-1974, there is no firm in existence and no partner of the erstwhile partnership firm was able to represent any of his erstwhile partners subsequent to the date of dissolution. Therefore, there was no scope even to allege that Shri Venkatadri had conducted the business on behalf of all the other co-legatees subsequent to 27-9-1974. So much is about the bus....
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....f the co-legatees can be presumed, while leasing out of the cinema hall in pursuance of the Court orders, by the Commissioner. Thus, here is a situation, where the lease amounts were realised not by the common design or combined will of all the co-legatees, but only in pursuance of the judicial orders passed by the Court. The deposit made by the Commissioner represents the lease rents realised at the behest of the orders of the Court, and all the six co-legatees under the will were entitled to the said lease amount. When such is the correct factual position obtaining on each last day of the previous years relevant to these three assessment years, can we visualise the position of co-legatees under the will in any way different from mere 'individuals who merely receive income jointly without anything further as in the case of co-heirs inheriting shares and securities'. For merely inheriting shares and securities, neither any design nor combined will among the co-heirs is essential. So also, for pressing their respective claims against the lease amounts realised by the Commissioner which were deposited in the court by the co-legatees in this case, in our considered opinion, no common ....
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....oduced or helped to produce income for the benefit of all, when the Commissioner merely auctioned the leasehold right of the cinema hall and credited the proceeds in the suit? Therefore, for this reason, since there is neither unity of interest, nor any of the co-legatees either produced or helped to produce income for the benefit of all, we are unable to hold that the assessee can be described to be 'Body of Individuals'. 10. The learned counsel for the assessee also relied on the A. P. High Court decision in Bolla Tirapanna & Sons v. CIT [1969] 71 ITR 209. In that case, the question was whether the assessee can be considered to be an 'Association of Persons'. The said case is clearly distinguishable inasmuch as we are concerned here with the concept of 'Body of Individuals' and not 'Association of Persons'. Further, their Lordships of the A.P. High Court were considering the status of the assessee in that case under the Indian Income-tax Act, 1922, and not under the Income-tax Act, 1961, and therefore, the ratio of the said decision cannot be of any help to the assessee. 11. Another decision relied upon by the learned counsel for the assessee, Shri K.S. Viswanathan, was the lat....
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....ons of the appellate authorities for earlier years cannot operate as res judicata for the three assessment years under consideration before us inasmuch as there is no estoppel in income-tax proceedings. Each assessment is a single and separate unit, which is to be considered separately and independent of the assessment for any earlier or subsequent assessment year. The learned departmental representative argued that it is not always necessary for the revenue to show that a 'Body of Individuals' should have unity of interest or one or more of them should have acted for the benefit of all others in the body, only with reference to business interest or a business asset. In the case of Pabbati Shankaraiah, the A.P. High Court already held that a particular situation can also bring about a 'Body of Individuals'. We agree with this contention, and we therefore, hold that the ratio of the decision of the A. P. High Court in Ambica Tobacco Co. (P.) Ltd.'s case cannot properly be applied to the facts of the present case. 13. Thus, in our opinion, assessee should be assessed only as individuals in respect of their respective shares in the cinema hall, and in respect of the share of each co-....