Remuneration as compensation for personal services is not HUF income where no real nexus with family investment exists.

Where remuneration paid to a karta arises from his personal services, qualifications and long experience rather than from joint family investment, it does not constitute income of the Hindu Undivided Family; the absence of a real connection between the family's shareholding and the appointment or payment means the sums are attributable to the karta individually. The Tribunal's factual findings-differing director scales, substantial payments unrelated to family investment, specialized services and extended residence to manage affairs-support treating the remuneration as personal service income, not HUF income.

---

---

Issues: Whether the Tribunal was legally justified in holding that the remuneration received by the karta from the company did not constitute income of the Hindu Undivided Family for the two years in question.

Analysis: The facts include payment of salary to the karta under a special resolution and in compliance with Section 314 of the Companies Act, 1956 and the articles of association. The Tribunal found that the salary was attributable to the karta's special qualifications, long experience and services rendered (including extended residence to manage company affairs), that the salary scale differed among directors, and that the amounts paid were substantially larger than the family's investment in company shares. These findings indicate the absence of a real connection between the joint family investment and the appointment or remuneration of the karta; the remuneration was therefore linked to personal services and expertise rather than return on family funds.

Conclusion: The Tribunal was legally justified in holding that the remuneration received by the karta did not constitute income of the Hindu Undivided Family.

Ratio Decidendi: Where there is no real connection between joint family investment and the appointment or remuneration of the karta, remuneration paid to the karta as compensation for personal services is not income of the Hindu Undivided Family.

---