Kapur, J. - (1.)These are four appeals by the Commissioner of Income-tax in Income-tax Reference made under S. 66-A(2) of the Income-tax Act (hereinafter termed the 'Act'). The question for decision is whether the respondent is "an association of persons" within the meaning of S. 3 of the Act.
(2.)The appeals relate to two Income-tax assessments and two Excess Profits Tax assessments; the former for the years 1946-47 and 1947-48 respectively, corresponding to the accounting years February 1, 1945 to September 30, 1945 and October 1, 1945 to August 21, 1946, the latter are in regard to chargeable accounting periods February 1, 1945 to September 30, 1945 and October 22, 1945 to March 31, 1946. The decision of the Excess Profits tax appeals is consequent upon the decision of the Income-tax appeals.
(3.)The facts may now be stated:In 1945 the Deputy Commissioner of Buldana evolved a scheme for the distribution of cloth in his district and with the sanction of the Government of C. P. appointed four persons viz., Haji Ahmed Haji Ali and Co., Bhanji Kuwarji, Trimbaklal Tribhovan Das and Deolal Rangulal as sole agents for the import of cloth from mills in various places in India and for distribution of the same to retailers. Two of them Haji Ahmed Haji Ali and Co., and Bhanji Kunwarji carried on the business as from February 1, 1945, to the end of September 1945. The profits of the business in proportion of the capital contributed by these persons were distributed between these two persons. After September, 1945, there was a change in the group of importers and some others also joined the group and the profits of the subsequent period were similarly distributed between the members of the group as it was then constituted in proportion to the capital contributed by each of them.