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

The Supreme Court ruled that the three widows of a deceased Hindu, governed by the Mitakshara School of Hindu Law, do not constitute an 'association of persons' under Section 3 of the Indian Income-tax Act, 1922. The Court clarified that an association of persons requires a common purpose aimed at producing income, which was not present in this case as the widows merely received dividends and interest without engaging in activities to generate income. Consequently, the assessment of their income as an association of persons was held to be incorrect, and the appeals were allowed.