Family income principle applied to karta's partnership remuneration, which was assessable in the Hindu undivided family's hands.

Remuneration received by a karta from a partnership firm was held includible in the Hindu undivided family's total income where the family's capital was invested in the firm and the karta acted as partner representing the family. The payment was treated as arising from the family's investment and partnership rights, not from a separate personal employment or independent individual capacity. Applying the principles of earlier decisions, the SC sustained assessment of the amount as family income rather than the karta's individual income. The reference was answered against the assessee.

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Issues: Whether remuneration paid to the karta of a Hindu undivided family by a partnership firm, in which the family capital was invested and whose partnership rights were governed by the family arrangement, could be assessed as the income of the family.

Analysis: The assessment year was 1954-55 and the remuneration was paid to the karta for services rendered to the firm. The material facts showed that the capital contribution came from joint family assets and the karta was a partner representing the family. On those facts, the payment was not treated as personal income earned in an independent individual capacity, but as an accretion arising out of the family's investment and the rights of the partners under the partnership deed. The question stood governed by the principles applied in the earlier decisions relied upon by the Court.

Conclusion: The remuneration was includible in the total income of the Hindu undivided family and not the individual income of the karta.

Final Conclusion: The reference was answered against the assessee, and the income-tax department's view was sustained.

Ratio Decidendi: Where a karta receives remuneration from a partnership in which he represents the Hindu undivided family and the family funds provide the capital, the receipt may be assessed as family income if it is referable to the family connection and not to a distinct personal employment.

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