- (1.) This matter arises of a statement of case under the Indian Income Tax Act, 1922, Section 66, by the Commissioner of Income Tax of Bengal. For the year of assessment 1933-34, the Income Tax Officers, for District III (1) made an assessment in respect of certain property in Calcutta, called the Norton Buildings. In the assessment the name of assessee was stated to be B. N. Elias for self and for B. S. Benjamin, Sir Victor Season and A. J. Raymond, 19-D, Bowbazaar Street. Status (whether individual, registered or unregistered firm, Hindu undivided family, company or other associations of individuals). Associations of individuals. Sources of income with exact nature of business - House property. It was stated that the members of the association have the following interest. B. N. Elias - One-third, B. S. Benjamin - One-third, Sir Victor Sasson - One-sixth and A. J. Raymond - One-sixth. The income returned was Rs. 68,209. On that the aforesaid individuals were charged to tax as follows : Income Tax - Rs. 8,881-6; Surcharge on income tax Rs. 2,220 6-0; Super Tax - Rs. 2,360-1-0; surcharge on super tax - Rs. 590 in all Rs. 14,051-13-0. It is said by the assessees that this assessment is wrong, because it assesses them as an association of individuals and thus exposes them to a higher rate, and a higher amount of both income tax and super tax.
(2.) The history of the ownership of this property, as far as it is relevant in this case, is as follows. By a deed of conveyance, dated the 9th January, 1920, this property was purchased by Ranchael Bekhor, Captain E. V Sassoon A. J. Raymond and B. N. Elias, and their respective shares in the property purchased were one third, one-sixth, one sixth, and one third. In the deed of purchase those four indivisuals were described as the purchasers. The deed says the purchasers, which expression shall, unless excluded by or repugnant to the context include them and each of them and their and each of their heirs, executors, administrators, representatives and assigns of the third part. The deed also recites that the purchasers were to have and to hold the said premises.... absolutely and for ever as tenants in common in the following shares or proportions. The Proportions have been set out above.
(3.) On the 15th September, 1921. Rachael Bekhor by a deed of that date declared that her share of the cost of the building had been provided by Mr. Benjamin and that share was conveyed to her in trust by Mr. Benjamin and that she undertook to convey the said property, or any part of it, to such person or persons as Mr. Benjamin might direct and that Mr Benjamin was then the owner of the one third share originally belonging to Rachael Bekhor. We are told that this property is let out as offices. In 1920, E. V. Sassoon, Rachael Bekhor, and A. J. Raymond executed a power of attorney which recited as follows : Whereas we jointly or severally are now seized or possessed or may hereafter become seised or possessed of lands, messages and tenements at Calcutta and whereas we are desirous of appointing some fit, and proper person to transact, conduct and manage on our behalf affairs in relation thereto and have for such purpose selected Benjamin Nissim Elias of Calcutta, now know ye that we the said Ellice Victor Sassoon, Rachael Nissim Bekhor and Abraham Jacob Raymond jointly and severally do and each and every of us do the by these presents make, constitute and appoint the said Benjamin Nissim Elias our true and lawful attorney for us and in our name on for and in the name of any of us - 1. To conduct and manage all and singular our affairs in relation to lands, messuages and tenements of which we are or any of us may hereafter be jointly or severally seized or possessed at Calcutta. 2. For the purpose aforesaid to demand recover and take possession of all and singular the lands, messages, tenements now belonging or which may hereafter belong to us or any of us absolutely or by way or equitable mortgage or in which we have or any of us has a beneficial interest either along or jointly with others and to view the state thereof and to give proper notices and direction for repairing the same and to oversee, let, sublet and manage the same. 3. To pay or allow all taxes, rates, charges expenses and out going due and payable or to become due and payable for on account of the said lands and immovable properties.;