Karta's remuneration treated as individual income where payment reflected personal services, not family investment returns.

Remuneration paid to a karta by companies in which the Hindu undivided family had invested funds is assessable as family income only if it is a return on the family's investment and not compensation for personal services. Where the karta had substantial experience and actually rendered services, and the record did not show a real connection between the family's funds and the salary, the payment is treated as the karta's individual income. The family's major shareholding and intermittent or small dividends, by themselves, are insufficient to characterise the remuneration as income of the Hindu undivided family.

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Issues: Whether the remuneration received by the karta from companies in which the Hindu undivided family had invested substantial funds was assessable as the income of the family or as the individual income of the karta.

Analysis: The governing test is whether the payment was in substance a return on the family's investment in the business or, instead, compensation for services rendered by the coparcener. The findings recorded by the income-tax authorities and accepted by the Tribunal showed that the karta had substantial experience and had actually rendered services to the companies. The mere fact that the family held a major shareholding and that dividends were small or intermittent was not enough, by itself, to convert the remuneration into family income. The materials did not establish the kind of real connection between family funds and the salary that would justify treating the payment as a return on investment.

Conclusion: The remuneration was the individual income of the karta and not assessable as the income of the Hindu undivided family.

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