Directors' fees earned for personal services are not HUF income, even when shareholding arises from family assets.

Directors' fees received by members of a Hindu undivided family are treated as personal income where the remuneration is earned for services rendered by the individuals as directors. The fact that their shareholding or eligibility as directors was linked to joint family assets does not, by itself, make the fees family income, because the family property was not employed in earning that remuneration. Dividends from the shares remain family income, but directors' fees stand on a different footing as personal earnings of the directors.

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Issues: Whether directors' fees received by members of a Hindu undivided family from a company owned by the family constituted the income of the family or the personal income of the individual directors.

Analysis: The remuneration was received for services rendered by the individuals as directors. The fact that their shareholding or eligibility as directors was traceable to joint family assets did not convert the fees into family income, because the family property itself was not employed in earning the remuneration. The dividends derived from the shares remained family income, but the directors' fees stood on a different footing as personal earnings.

Conclusion: The directors' fees were the personal income of the assessees and not the income of the Hindu undivided family.

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