Business income versus salary: treasurer's remuneration treated as independent contractual income, not salary, on the facts found.

Remuneration received by a karta as Government Treasurer was treated as business income rather than salary because the arrangement, on the facts found, was one of independent contracting and not a contract of personal service. The Tribunal's conclusion was supported by the nature of the appointment, the treasurer's own organisation and staff control, the indemnity obligation to the Government, and the absence of any requirement of personal service. A Hindu undivided family could enter into a business contract, but not in its collective capacity a contract of personal service, so the Tribunal's finding was upheld.

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Issues: Whether the remuneration received by the assessee's karta as Government Treasurer was salary chargeable under section 7 of the Income-tax Act, 1922 or business income chargeable under section 10 of that Act.

Analysis: The character of the receipt depended on the facts and circumstances found. The materials contained features pointing both ways, but the Tribunal's conclusion that the arrangement was one of independent contracting was supported by relevant facts, including the nature of the appointment, the organisation maintained by the treasurer, the control over staff, the obligation to indemnify the Government, and the absence of any requirement of personal service. The status of the person appointed was also relevant: a Hindu undivided family could enter into a business contract, but could not in its collective character be regarded as accepting a contract of personal service.

Conclusion: The remuneration was business income and not salary; the finding of the Tribunal was upheld.

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