Karta remuneration treated as individual income where payment reflected personal experience and services, not family investment.

Remuneration received by a karta from a private company was held to be assessable as his individual income, not as the income of the Hindu undivided family, because the payment was found to be compensation for his personal qualifications, experience, and services. The family shareholding was not established as the real source of the remuneration, and there was no necessary nexus between family funds and the salary received. Where a coparcener's remuneration is in substance personal compensation rather than a return on family investment, it is taxable in his individual hands.

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Issues: Whether the remuneration received by a karta from a private company was assessable as the income of the Hindu undivided family or as his individual income.

Analysis: The decisive enquiry was whether the payment was, in substance, a return on the family investment in the company or compensation for the personal services of the coparcener. The family's shareholding was not shown to be the real source of the remuneration, and the Tribunal found that the karta had long and specialised experience in the relevant line of business. Those findings negatived any necessary nexus between the family funds and the salary received.

Conclusion: The remuneration was the individual income of the karta and not the income of the assessee-family.

Ratio Decidendi: Where remuneration received by a coparcener is shown to be compensation for his personal qualifications, experience, and services, and not in substance a return on family investment, it is assessable as his individual income rather than as income of the Hindu undivided family.

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