TaxTMI 
TaxTMI 
1954 (12) TMI 39
X X X X Extracts X X X X
X X X X Extracts X X X X
.... 2. The reference relates to the assessment year 1947-48 in respect of the income for the previous year ending Diwali 1946, and for the assessment year 1948-49. Eleven semi-wholesalers of cloth at Akola were assessed in the status of an unregistered firm. The same group was also assessed to excess profits tax in respect of the chargeable accounting year from November 18, 1945, to March 9, 1946. 3. In view of the acute scarcity of cloth in the Province, a scheme was evolved by the Government for equal distribution of cloth amongst the consumers. A press note dated May 21, 1945, and the memoranda dated September 11, and December 10, 1946, which are annexures A to C to the statement of the case, detail the scheme of distribution for the Akol....
X X X X Extracts X X X X
X X X X Extracts X X X X
....a was distributed the nominee had to return the capital supplied by each semi-wholesalers and pay him his share of the excess of receipt over expenditure. 5. On these facts the Appellate Tribunal held that "if at all anybody did business. It was, so to say, the Government or its agent, the Deputy Commissioner of Akola. True, he did not find the capital nor did he retain the profits, but that makes no difference. The Tribunal was of the view that the relation of wholesalers to each other could not be the relation of partnership and that the mere fact that each one got a share of profits did not make him a partner. On this view, the order of assessment passed by the Income-tax Officer and affirmed by the Appellate Assistant Commissione....
X X X X Extracts X X X X
X X X X Extracts X X X X
....f them acting for all. We do not find any evidence of any agreement either to carry on the business or to share the profits. The business was carried on under the orders of the Government and the share of profits was also fixed by the Government. It was of course open to any one of them to withdraw from the scheme. The only obligation incurred by a semi-wholesaler was to contribute working capital in proportion to his quota fixed by the Government. The benefit to share profits was conferred by the Government if the semi-wholesalers contributed his share of working capital. The return which the semi-wholesalers received was thus in lieu of the supply of capital and not as a share of any partnership business. We therefore hold that the eleven....
X X X X Extracts X X X X
X X X X Extracts X X X X
....er association for profits which are not partnerships, all fall under this class. 9. In Commissioner of Income-tax, Burma v. M. A. Baporia and Others, it was held that the expression "association of individuals" in section 3 of the Act must be construed ejusdem generis not only with the word immediately preceding, i.e. "firm", but with all other groups of assessees mentioned in the section. The common generic quality appears to be joint interest. There must be some kind of arrangement amongst the adult "persons" to indicate their intention to earn income, profits and gains in common. In Mohammad Aslam v. Commissioner of Income-tax, United Provinces, the learned Judges preferred to construe the expression as ej....