Legal Case Summary

Case Details
Case ID 67d8074f-4fee-4408-bee7-2534d7fa7e53
Body View case body.
Case Number IT REFERENCE NOS. 97 AND 106 OF 1977
Decision Date
Hearing Date
Decision The court upheld the Tribunal's decision to directly assess the share income of the member from the association of persons (AOP) without requiring the AOP itself to be assessed. It clarified that the income earned by an AOP is taxable and that each member is also liable for tax on their share of income. The court emphasized that the absence of direct assessment on the AOP does not prevent individual members from being assessed on their respective shares. The ruling reinforces the interpretation of sections 4 and 2(31) of the Income-tax Act, 1961, clarifying the tax obligations of AOPs and their members.
Summary This case revolves around the assessment of income from an association of persons (AOP) under the Income-tax Act, 1961. The case involved Kailash Lamba, a member of an AOP that operated a guest house. The primary issue was whether the share income of a member could be taxed without the AOP itself being assessed. The Delhi High Court ruled that individual members of an AOP could be directly assessed on their share of income, affirming that the income of an AOP is subject to tax and is also considered the income of its members. This decision is significant as it clarifies the tax responsibilities of AOPs and their members, ensuring that individual tax assessments can proceed independently of the association's tax status. The case cites previous judgments to differentiate its findings and solidify its legal stance.
Court Delhi High Court
Entities Involved Not available
Judges D.K. Kapur, S. Ranganathan
Lawyers Anoop Sharma, R.K. Raghavan, K.K. Wadhera, R.C. Pandey
Petitioners Kailash Lamba
Respondents Commissioner of Income Tax
Citations 1986 SLD 1277 = (1986) 157 ITR 266
Other Citations CIT v. Kanpur Coal Syndicate [1964] 53 ITR 225 (SC), CIT v. Murlidhar Jhawar & Purna Ginning & Pressing Factory [1966] 60 ITR 95 (SC)
Laws Involved Income-tax Act, 1961
Sections 4, 2(31), 86(v)