Civil Appeals Nos 249  250 of 1958
Appeals by special leave from the judgment and order dated March 7 1956 of the Bombay High Court in ITR Nos 52 and 53 of 1955
K N Rajagopal Sastri and D Gupta for the appellant in both the appeals
N A Palkhivala section N Andley and J B Dadachanji for the respondent in both the appeals
April 14
The Judgment of the Court was delivered by section K DAS J
These two appeals with special leave have been heard together
They arise out of similar facts and the question of law arising therefrom is the same
The short facts are these
One Balkrishna Purushottam Purani died on November 11 1947
He left behind 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 immovable properties situate in Ahmedabad shares in Joint Stock Companies money lying in deposit and share in a registered firm
For the two assessment years 1950 51 and 1951 52 the corresponding account years being the Sambat years 2005 and 2006 the Incometax Officer issued notices to the legal heirs of Balkrishna Purushottam Purani
Pursuant to those notices returns were filed under the heading  Legal heirs of Balkrishhna Purushottam Purani  in one case 515 and in the name of the estate of Balkrishna in the other the status was shown as  individual  in one case and  association of persons  in the other
They were signed by Indira one of the three widows
For the assessment year 1950 51 the total income was shown as under Rs Property 11011 Share from registered firm
4071 Dividends
51796 Interest 22343 Ground rent 125 Total  69346 For the assessment year 1951 52 the total income was shown as Rs Property 
10879 Share from registered firm
460 Dividends
80426 Interest on deposits  536 Ground rent 125 Total  92426 For both years the Income tax Officer took the status of the assessee as an  association of persons  and on that footing made two assessment orders
There was an appear to the Appellate Assistant Commissioner and two of the points taken before him werea that the three widows ought to have been assessed separately and not as an  association of persons  and b that in any event the income from property ought to have been assessed separately in the hands of the three widows by reason of the provisions in section 93 of the Income tax Act 1922
The Appellate Assistant Commissioner rejected point a but accepted point b
Then there was a further appeal to the 516 Income tax Appellate Tribunal Bombay
The Tribunal held that the entire estate of deceased Balkrishna Purushottam Purani was inherited and possessed by the three widows as joint tenants and its income was liable to be assessed in their hands in the status of an association of persons
The Tribunal further held that the Appellate Assistant Commissioner was wrong in holding that the shares of the three widows were definite and determinable and section 93 was applicable
The assessee then moved the Tribunal to refer certain questions of law which arose out of its orders to the High Court of Bombay
The Tribunal referred four such questions but we are now concerned with only one of them viz question No 3 which was in the following terms  3 Whether on the facts and in the circumstances of the case the Tribunal was right in holding that the assessment made on the three widows of Balkrishna Purushottam Purani in the status of an association of persons is legal and valid in law   Two references were made to the High Court in respect of the orders passed for two assessment years and they gave rise to Income tax References Nos 52 and 53 of 1955
The leading judgment was given in T T It
52 of 1955
The High Court held that the Tribunal was in error in coming to the conclusion that the three widows could be assessed in the status of an association of persons with regard to the income which they earned as heirs of their deceased husband
Therefore it answered question No 3 in the negative
The department represented by the Commissioner of Income tax Bombay then applied to this Court and obtained special leave to appeal from the judgment and orders of the High Court of Bombay in the two References
These two appeals have been filed in pursuance of the special leave granted by this Court
The appellant is the Commissioner of Income tax Bombay and the assessee is the respondent
The argument on behalf of the appellant is that the High Court was in error when it said that  what is required before an association of persons can be liable to tax is not that they should receive income but that 517 they should earn or help to earn income by reason of their association and if the case of the Department stops short at mere receipt of income then the Department must fail in bringing home the liability to tax of individuals as an association of persons
 It is submitted that the High Court did not in the statement quoted above lay down the correct test for determining what is an  association of persons  for the purposes of the Income tax Act
Before we go on to discuss the argument presented on behalf of the appellant it is necessary to clear the ground by stating what is the position of co widows in Mitakshara succession and what are the findings arrived at by the Tribunal
The position of co widows is well settled
They succeed as co heirs to the estate of their deceased husband and take as joint tenants with rights of survivorship and equal beneficial enjoyment  they are entitled as between themselves to an equal share of the income
Though they take as joint tenants no one of them has a right to enforce an absolute partition of the estate against the others so as to destroy their right of survivorship
But they are entitled to obtain a partition of separate portions of the property so that each may enjoy her equal share of the income accruing therefrom
The Tribunal found that the widows in this case did not exercise their right to separate possession and enjoyment and  they chose to manage the property jointly each acting for herself and the others and receiving the income of the property which they were entitled to enjoy in equal shares
 Learned counsel for the appellant has emphasised before us the aforesaid finding of the Tribunal and has contended that on the finding of joint management the widows fulfilled even the test laid down by the High Court and constituted an an association of persons for taxing purposes
The High Court however rightly pointed out that the only property which the widows could have managed jointly was the immovable property which fetched an income of about Rs 11000 and as to that property the Appellate Assistant Commissioner had held that section 9 3 applied
There was no appeal by the Department against that finding and it was not 68 518 open to the Tribunal to go behind it
Even on merits the Tribunal was wrong in thinking that the respective shares of the widows were not definite and ascertainable
They had an equal share in the income viz one third each and the provisions of section 9 3 clearly applied in respect of the immovable property
With regard to the shares dividends and interest on deposits there was no finding of any act of joint management
Indeed the main item consists of the dividends and it is difficult to understand what act of management the widows performed in respect thereof which produced or helped to produce income
On the contrary the statement of the case shows that the assessee filed lists of shares copies whereof are marked annexure C and form part of the case which showed that the shares stood separately in the name of each one of the three widows and this was not denied by the Department
We now come to the main question in this appeal
What constitutes an  association of persons  within the meaning of the Income tax Act  It has been repeatedly pointed out that the Act does not define what constitutes an association of persons which under section 3 of the Act is an entity or unit of assessment
Previous to the year 1924 the words of section 3 were  individual company firm and Hindu undivided family By the Indian Income tax Amendment Act of 1924 Act XI of 1924 the words  individual Hindu undivided family company firm and other association of individuals  were substituted for the former words
By the Income tax Amendment Act of 1939 Act VII of 1939 the section was again amended and it then said  Where any Act of the Central Legislature enacts that income tax shall be charged for any year at any rate or rates tax at that rate or those rates shall be charged for that year in accordance with and subject to the provisions of this Act in respect of the total income of the previous year of every individual Hindu undivided family company and local authority and of every firm and other association of persons or the partners of the firm or members of the association individually
 519 By the same Amending Act Act VII of 1939 sub section
3 of section 9 was also added
Now section 3 imposes a tax  in respect of the total income    of every individual Hindu un divided family company and local authority and of every firm and other association of persons or the partners of the firm or members of the association individually
 In the absence of any definition as to what constitutes an association of persons we must construe the words in their plain ordinary meaning and we must also bear in mind that the words occur in a section which imposes a tax on the total income of each one of the units of assessment mentioned therein including an association of persons
The meaning to be assigned to the words must take colour from the context in which they occur
A number of decisions have been cited at the bar bearing on the question and our attention has been drawn to the controversy as to whether the words  association of individuals  which occurred previously in the section should be read ejusdem generis with the word immediately preceding viz firm or with all the other groups of persons mentioned in the section
Into that controversy it is unnecessary to enter in the present case
Nor do we pause to consider the widely differing characteristics of the three other associations mentioned in the section viz Hindu undivided family a company and a firm and whether in view of the amendments made in 1939 the words in question can be read ejusdem generis with Hindu undivided family or company
It is enough for our purpose to refer to three decisions In re B N Elias and Others 1 Commissioner of Income tax Bombay vs Laxmidas Devidas and Another and In re Dwarakanath Harishchandra Pitale and Another3 In In re B N Elias and Others 1 Derbyshire C J rightly pointed out that the word  associate  means according to the Oxford dictionary  to join in common purpose or to join in an action Therefore an association of persons must be OD e in which two or more persons join in a common purpose or common action and as the words occur in 1 2 3 520 a section which imposes a tax on income the association must be one the object of which is to produce income profits or gains
This was the view expressed by Beaumont C J in Commissioner of Income tax Bombay vs Laxmidas Devidas and Another 1 at page 589 and also in Re Dwarakanath Harishchandra Pitale and Another 2
In re B N Elias 3  Costello J put the test in more force full language
He said It may well be that the intention of the legislature was to hit combinations of individuals who were engaged together in some joint enterprise but did not in law constitute partnership When we find that there is a combination of persons formed for the promotion of a joint enterprise then I think no difficulty arises in the way of saying that these persons did constitute an association We think that the aforesaid decisions correctly lay down the crucial test for determining what is an association of persons within the meaning of section 3 of the Income tax Act and they have been accepted and followed in a number of later decisions of different High Courts to all of which it is unnecessary to call attention
It is however necessary to add some words of caution here
There is no formula of universal application as to what facts how many of them and of what nature are necessary to come to a conclusion that there is an association of persons within the meaning of section 3 it must depend on the particular facts and circumstances of each case as to whether the conclusion can be drawn or not
Learned counsel for the appellant has suggested that having regard to sections 3 and 4 of the Indian Income tax Act the real test is the existence of a common source of income in which two or more persons are interested as owner or otherwise and it is immaterial whether their shares are specific and definite or whether there is any scheme of management or not
He has submitted that if the persons so interested come to an arrangement express or tacit by which they divide the income at a point of time before it emanates from the source then the association ceases otherwise it continues to be an association
1 2 3 521 We have indicated above what is the crucial test in determining an association of persons within the meaning of section 3 and we are of the view that the test suggested by learned counsel for the appellant are neither conclusive nor determinative of the question before us
Coming back to the facts found by the Tribunal there is no finding that the three widows have combined in a joint enterprise to produce income
The only finding is that they have not exercised their right to separate enjoyment and except for receiving the dividends and interest jointly it has been found that they have done no act which has helped to produce income in respect of the shares and deposits
On these findings it cannot be held that the three widows had the status of an association of persons within the meaning of section 3 of the Indian Income Tax Act
The High Court correctly answered question No 3 in the negative
Accordingly the appeals fail and are dismissed with costs
There will be one set of hearing fee in the two appeals
Appeals dismissed


Summary:
The plaintiff a Rajput belonging to Tehsil Garhshankar in the District of Hoshiarpur Punjab instituted a suit against the defendant for the recovery of the properties which belonged to a deceased Gurkha woman R and which she had acquired by way of gift from a stranger alleging that he was the lawfully wedded husband of Rand that accord ing to custom which applied to the parties with regard to succession he was entitled to succeed to the moveable and immoveable properties of R in preference to the defendant who was his daughter by R Held that even if it be assumed that R was lawfully married to the plaintiff the question to be decided would be whether succession to property which R had received as a gilt from a stranger and which she owned in her own right would be governed by the custom governing her husband s family and not her own
Such marriage as was alleged to have been contracted by the plaintiff being evidently an act of rare occurrence the rule of succession set up by the plaintiff cannot be said to derive its force from long usage and the plaintiff was not in any event entitled to succeed
Their Lordships laid down the general principles which should be kept in view in dealing with questions of custom ary law as follows 1 It should be recognised that many of the agricultur al tribes in the Punjab are governed by a variety of cus toms which depart from the ordinary rules of Hindu and Muhammadan law in regard to inheritance and other matters mentioned in section 5 of the 
2 In spite of the above fact there is no presumption that a particular person or class of persons is governed by custom and a party who is alleged to be governed by custom ary law must prove that he is so governed and must also prove the existence of the custom set up by him
See Daya Ram vs Sohel Singh and Others 110 P R 1906 390 at 410 Abdul Hussein Khan vs Bibi Song Dero LR 45 IA 10
3 A custom in order to be binding must derive its force from the fact that by long usage it has obtained the force of law but the English rule that a CUstOm in order that it may be legal and binding must have been used so long that the memory of man runneth not to the contrary should not be strictly 826 applied to Indian conditions
All that is necessary to prove is that the usage has been acted upon in practice for such a long period and with such invariability as to show that it has by common consent been submitted to as the established governing rule of a particular locality
See Mt Subhani vs Nawab AIR 1941 PC 21 at 32
4 A custom may be proved by general evidence as to its existence by members of the tube or family who would natur ally be cognizant of its existence and its exercise without controversy and such evidence may be safely acted on when it is supported by a public record of custom such as the Riwaj i am or Manual of Customary Law
See Abroad Khan vs Mt Channi Bibi AIR 1925PC 267 at 271
5 No statutory presumption attaches to the contents of a Riwaj i am or similar compilation but being a public record prepared by a public officer in the discharge of his duties under Government rules the statements to be found therein in support of custom are admissible to prove facts recited therein and will generally be regarded as a strong piece of evidence of the custom
The entries in the Riwaj i am may however be proved to be incorrect and the quantum of evidence required for the purpose of rebutting them will vary with the circumstances each case
The presumption of correctness attaching to a Riwaj i am may be rebutted if it is shown that it affects adversely the rights of females or any other class of persons who had no opportunity of appearing before the revenue authorities
See Beg vs Allah Ditta AIR 1916 PC 129 at 131 Saleh Mohammad vs Zawar Hussain AIR 1944 PC 18 Mt Subhani vs Nawab AIR 1941 PC 21 at 25
6When the question of custom applicable to an agricultur ist is raised it is open to a party who denies the applica tion custom to show that the person who claims to be gov erned by it has completely and permanently drifted away from agriculture and agricultural associations and settled for good in urban life and adopted trade service etc as his principal occupation and means and source of livelihood and does not follow other customs applicable to agriculturists
See Muhammad Hayat Khan vs Sandhe Khan and Others 55 PR 1906 270 at 274 Muzaffar Muhammad vs Imam Din ILR 1928 9 Lab
120 125
7 The opinions expressed by the compiler of a Riwaj i am or Settlement Officer as a result of his intimate knowledge and investigation of the subject are entitled to weight which will vary with the circumstances of each case
The only safe rule to be laid down with regard to the weight to be attached to the compiler s remarks is that if they repre sent his personal opinion or bias and detract from the record of long standing custom they will not be sufficient to displace the custom but if they are the result of his inquiry and investigation as to the scope of the 827 applicability of the custom and any special sense in which the exponents of the custom expressed themselves in regard to it such remarks should be given due weight
See Narain Singh vs Mr Basant Kaur AIR 1935 Lah
419 at 421422 Mr Chinto vs Thelur AIR 1935 Lah 98S Khedam Hussain vs Mohammad Hussain AIR 1941 Lah
73 at 79