TaxTMI 
TaxTMI 
1964 (9) TMI 7
X X X X Extracts X X X X
X X X X Extracts X X X X
....ed by the parties. Maharaja Sir Kishen Pershad (d. in 1940) Khaja Pershad Sultan Kunwar Bibi Kishen Kunwar (d. 25-12-1943) Bibi Raja Ratan Raja Prem Raja Raja Gopal Gopal Chamanlal Narenderlal After the death of Maharaja Kishen Pershad in 1940, his son, Raja Khaja Pershad, succeeded to his estate and he died on December 25, 1943. On the recommendation of a special commission appointed to ascertain the heirs of Raja Khaja Pershad, His Exalted Highness the Nizam of Hyderabad issued a firman dated December 12, 1948. Under that firman, Raja Ratan Gopal, Raja Prem Gopal, Raja Chamanlal and Raja Narenderlal, the sons of two sisters of Raja Khaja Pershad, were declared to be his heirs and entitled to succeed to his estate. Und....
X X X X Extracts X X X X
X X X X Extracts X X X X
....the Deputy Commissioner of Agricultural Income-tax on three grounds, namely, (i) he should not have been assessed on the basis of "association of persons" but only on his individual income ; (ii) he should have been allowed deduction of expenditure incurred on maintenance of palace buildings and other buildings of the estate, and (iii) he should have been allowed a deduction of the amounts paid to dependents under the terms of the will of the late Maharaja. The Deputy Commissioner allowed the third objection, but rejected the first two. Against the said order the respondent filed a revision before the Commissioner of Agricultural Income-tax, but that was dismissed. The respondent thereupon preferred a revision to the High Court of Hyderabad....
X X X X Extracts X X X X
X X X X Extracts X X X X
....filed by certificate issued by the High Court against the said order of the High Court. Learned Additional Solicitor-General contested the correctness of the said two answers given by the High Court. The first question is whether the High Court was right in holding that the respondent should be assessed on his share of the income and not on the income of the four brothers as "association of individuals." Under section 3 of the Act for the financial year commencing on April 1, 1950, and for every subsequent financial year, agricultural income-tax shall be charged in accordance with and subject to the provisions of the Act on the total agricultural income of the previous year of every person. "Person" has been defined in section 2(k) of....
X X X X Extracts X X X X
X X X X Extracts X X X X
....titled as between themselves to an equal share of the income. Either of them could not enforce an absolute partition, though for the purpose of convenience of enjoyment they could divide the property and enjoy their respective shares of the income therefrom. The question arose whether they should be assessed as individuals or as an association of persons. Das J. speaking for the court, accepted the following test to ascertain whether two or more persons constituted an " association of individuals " within the meaning of the Income-tax Act : " An association of persons must be one in which two or more persons join in a common purpose or common action, and as the words occur in a section which imposes a tax on income, the association must ....
X X X X Extracts X X X X
X X X X Extracts X X X X
..../4 share of the income from the estate. They did not form a unit for the promotion of any joint enterprise to earn income, profits or gains. The collection of the entire income from the estate by one of the sharers or even by a common employee will not make that income an income from a joint venture. Each of the sharers gets his income as an individual and not as an association of individuals. In this view, the High Court was right in answering the first question in favour of the respondent. There are no merits in the second contention either. The question is whether the assessee is entitled to a deduction under section 6(e) of the Act in respect of the expenditure incurred by him for the maintenance of the palace and other buildings of ....