Ad Free CAclubindia and Daily Updates on your Mobile. Subscribe Now!

agreement for AOPs PAN

DIPAK AGARWAL (Service) (554 Points)

17 March 2008

can some one let me know that what should be the format of the agreement that is to be attached while applying the pan no. of AOP.

in our case AOP is an individual person who is dead. for continuing his it file his legal heir it in our case his husband will be liable for signing his I T RETURNS and all.

pl. suggest the appropriate format.

thanking you.

Reply
Follow
Share

11 Replies

Late CA Sampat Jain (Chartered Accountant) (4772 Points)
Replied 20 March 2008

ASSOCIATION OF PERSON MEANS AS FOLLOWS:

Association of persons - Sub-clause (v)

n 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 one in which two or more persons join in a common purpose or common action, and as the word occurs in section 3 of the 1922 Act, which imposes a tax on income, profits or gains, the association must be one the object of which is to produce income, profits or gains - CIT v. Indira Balkrishna [1960] 39 ITR 546 (SC).

n ‘Association of persons’ as used in section 2(31) means an association in which two or more persons join in a common purpose or common action, and as the words occur in a section which imposes a tax on income, the association must be one, the object of which is to produce income, profits or gains - N.V. Shanmugham & Co. v. CIT [1971] 81 ITR 310 (SC).

n For forming an ‘association of persons’ the members of the association must join together for the purpose of producing an income. An ‘association of persons’ can be formed only when two or more individuals voluntarily combine together for a certain purpose. Hence, volition on the part of the members of the association is an essential ingredient. Even a minor can join an ‘association of persons’ if his lawful guardian gives his consent. In the case of receiving dividends from shares, where there is no question of any management, it is difficult to draw an inference that two or more shareholders function as an ‘association of persons’ from the mere fact that they jointly own one or more shares, and jointly receive the dividends declared. Those circumstances do not by themselves go to show that they acted as an ‘association of persons’ - G. Murugesan & Bros. v. CIT [1973] 88 ITR 432 (SC).

n To ‘Associate’ is to join in a common purpose or action. ‘Association’ does necessitate the exercise of volition of those who form the association. The exercise of that volition can be by or on behalf of those who form the association - Estate of Khan Sahib Mohd. Oomer Sahib v. CIT [1958] 33 ITR 767 (Mad.).

n An association of persons does not mean any and every combination of persons. It is only when they associate themselves in an income-producing activity that they become an association of persons. They must combine to engage in such an activity; the engagement must be pursuant to the combined will of the persons constituting the association; there must be a meeting of the minds, so to speak. In a nutshell, there must be a common design to produce income. If there is no common design, there is no association. Common interest is not enough. Production of income is not enough. This interpretation of the expression ‘association of persons’ flows from the meaning of the word ‘association’ - Deccan Wine & General Stores v. CIT [1977] 106 ITR 111 (AP).

n Joining together by the members of the association for the purpose of producing income is requisite for formation of an association of persons. Such coming together or combining is a consensual act and depends upon the volition of the parties. Merely because certain persons are constituted joint owners, such as by inheriting the property of a person on his death, they do not become an association of persons, for, in that event, the jointness is the result of operation of law and not of volition of parties - CIT v. T.V. Suresh Chandran [1980] 121 ITR 985 (Ker.).

AN AGREEMENT BETWEEN THE PERSONS TO FORM AOP AS DEFINED ABOVE CAN BE MADE AND THE SAME MAY BE SUBMITTED

Upgrade to CAclubindia Pro. Subscribe Now!

(Guest)

please send me a copy via email

thanking you

(Guest)

We have formed AOP with X for a construction of building wherein X was required to get approvals & FSI and we were to construct without stopping. X did not brought sanctions & FSI but sold flats. Building was declaredas unauthorised and Court allowed to regularise it. He proposed to regularise building on basis of FSI of our plots without proper writtings and without compensating us. So we made complaints and did not allow him to utilise FSI so he terminated our agreeement. We offered FSI for temporary period till he gets FSI. But he continue to puruse authorities to utilise FSI behind our back.

His intentions are: To get building regularise by our plots without compensating us and to retain entire building by terminating our agreement

Pl. suggest how to save our rights as well as plots?

Raykumar Panyam (Operations Head AP) (65 Points)
Replied 29 June 2009

Please send me a copy of "AN AGREEMENT BETWEEN THE PERSONS TO FORM AOP" to my mail id kumarray @ yahoo.com i shall be very thankful

Rupa (Partner) (22 Points)
Replied 22 July 2009

Could you please send me a copy of "An Agreement Between the Persons to form AOP" and "An Agreement that an AOP enters into with Company/Entity/Individual" to my email rupas99 @ hotmail.com Await receipt of the same. Thanks