COMMISSIONER OF INCOME-TAX, BOMBAY versus SMT. INDIRA BALKRISHNA

Citation: [1960] 3 S.C.R. 513 · Decided: 14-04-1960 · Supreme Court of India · Bench: S.K. DAS · Disposal: Dismissed
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Judgment (excerpt)

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3 S.C.R. 
SUlJREME COURT REPORTS 
513 
gratuity for other modes' oi 
termination of 
service. 
That was the method followed in the award that fell 
for comideration fr1 Brahmachari's case. 
That method 
has however not been followed in the award that we · 
have to. consider here. 
ln this case there is no specific 
reference 'in the award to retrenchment as such: 
The 
reasonable conclusion from the scheme as · drawn up 
is that the gratuity that could be claimed under this 
award by retrenched 
workmen because of the fact 
that retrenchment is also one kind of termination !l'of 
service vl'ithin the meaning of the award was intended 
to be in addition to the retrenchment compensation 
and not in lieu thereof. 
The decision in 
Brahmachari.'s case on the special 
facts of the award therein is therefoi;e of no assistance 
to the appeUai1t. 
\Ve are bound to hold on an exami-
nation of the 
award in the · present case 
that the 
gratuity which the respoi1dent claims on the basis of 
the award is distinct 
from and 
in addition 
to the 
retrenchment compensatioh he has received. 
v\Te are 
of opinion therefore 
that the Tribunal was right in 
holding that the respondent· is e1ititlecl to such gratuity 
e11en though 
he has 
already 
received 
payment of 
compensa'tion ·for 
retrenchment in 
accordance with 
the provisions of 
s. 25F of the 
Industrial Disputes 
Act. 
The appeal 1s accordingly' dismissed with costs. 
A jJ/JCal disntissed. 
COMivIISSIONER OF INCOME-TAX, BOMBAY 
I 
v . 
(S. K. DAs, J. L. KAPUR and/M. 1-TmAYATULLAtt,JJ.) 
Income-tax-Association of persons-Meaning o(-Indian In-
cume-tax Act, 1922 (XI of .1922), s. 3. 
A Hindu governed by the Mitakshara School of Hindu Law 
died leaving three widows as his legal heirs. 
The widows took 
the estate as joint tenants and 
did not exercise their right to 
separate possession and enjoyment. 
The main income was from -
dividends and from 
immovable property. 
The latter was held 
under s. 9(3) of the Income-tax Act not to be assessable as income 
1960 
Muller & Phij1ps 
.(India) Ltd. 
v. 
· K. C. Sud 
Das Gupla ]. 
1960 
Af,ril 14. 
514 
SUPREME COURT REPORTS 
[1960] 
1960 
of an association of persons. 
The question was whether the three 
-
,,r widows could be assessed as an association of persons in respect 
Commissioner 
UJ 
of the rest of the income : 
lncomr-lax, 
Bomba_)' 
Held, that the three widows did not have, the status of an 
v. 
association of persons within the meaning of s. 3 of the Income-
Smt. Indira 
tax Act. 
An association of persons is one in which two or more 
Balkrishua 
persons join in a common purose or common action and, for 
purposes of the income-tax law, 
one of its objects 
must be to 
produce income, 
profits· or 
gains. 
It must be a 
combination 
of persons formed for the 
promotion of a joint 
enterprise for 
pr.oducing income. 
In the 
present case 
except for 
receiving 
the dividents and 
interest jointly the 
widows had done no act 
which helped to produce the income. 
S. K. Das]. 
In re: B. N. Elias, 
[1935] 3 1.T.R,. 408, 
Commissioner of 
l11cume-tax, Bombay v. Laxmidas Devidas, [1937.] 5 J.T.R. 484 
and Re.Dwarakanath Harishchandm, [ 1937] 5 J.T.R. 716, approved. 
CI\'IL APPELLATE Ju1usmcno;.;: Civil Appeals Nos. 
219 & 250 of J 958. 
Appeals by special leave from 
the judgment and 
order dated ;\larch 7, EJ56, of the Bombay High Court 
in l.T.R. Nos. C,2 and 53 of 1955. 
K. N. RajagojJal Sastri and D. Gupta, for the appcl· 
!ant (in both the appeals). 
N. A. Pulkhivala, S. N. Andlcy and .f. B. Dadachanji, 
for the respondent (in both the appeals). 
1%0. 
April M. 
The Judgment of the Court was 
delivered by 
S. K. DAS, J-These two appeals with special leave 
have been heard tog·ether. 
They arise out of similar 
facts and the question of law arising therefrom is the 
sa1ne. 
The short facts are these. 
One Balkrishna Puru· 
shottam .Purani died on November ll, 1947. 
He left 
behincl him three widows and two daughters. 
The 
three widows 
were named Indira, 
Ramluxmi 
and 
Prabhuluxmi. 
These widows as legal heirs inherited 
the estate of the deceased, which consisted of immov· 
able properties situate in Ahmedabad, shares in Joint. 
Stock Companies, money lying in deposit, 
and share 
in a 
registered firm. 
For ·the 
two assessment years 
1900-51 and l!J51-:'i2 (the corresponding account years 
being the Sam bat years 200:> and 2006) the I ncomc-
tax Oniccr . issued notices to 
the legal 
heirs of Bal-
kr
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