Control and supervision determine salary status; joint family security alone does not make treasurer's pay family income.

Emoluments paid to a treasurer were treated as salary because the agreement showed control, supervision, dismissal power, and integration into the bank's work; unusual clauses on staff responsibility and indemnity did not convert the arrangement into an independent business undertaking. The emoluments were therefore taxable as salary, not as profits and gains of business. The same salary was held to be the treasurer's individual income because there was no material showing family expenditure, special training at family cost, or real detriment to the family estate; mere furnishing of joint family property as security was insufficient. The appeal succeeded and the salary was assessed only in the treasurer's hands.

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Issues: (i) Whether the emoluments received by the treasurer were assessable as salary or as profits and gains of business; (ii) whether those emoluments were assessable in the hands of the Hindu undivided family or as the individual income of the treasurer.

Issue (i): Whether the emoluments received by the treasurer were assessable as salary or as profits and gains of business.

Analysis: The agreement, read as a whole, showed that the treasurer performed duties characteristic of a treasurer in a bank, worked under the bank's control and supervision, was subject to directions and dismissal, and was integrated into the bank's business. The mere presence of unusual clauses, including responsibility for staff and indemnity for defaults, did not convert the relationship into one of independent contract or business undertaking.

Conclusion: The emoluments were salary and not profits and gains of business, in favour of the assessee.

Issue (ii): Whether those emoluments were assessable in the hands of the Hindu undivided family or as the individual income of the treasurer.

Analysis: No material showed that the appointment was secured by expenditure from family funds, by special training at family expense, or by any real detriment to the family estate. The furnishing of joint family property as security was not enough, by itself, to treat the salary as family income. The earning was attributable to the personal qualifications and service of the treasurer.

Conclusion: The salary was the individual income of the treasurer and not the income of the Hindu undivided family, in favour of the assessee.

Final Conclusion: The High Court's answers were set aside, the appeal succeeded, and the salary was held taxable only as the individual income of the treasurer under the Income-tax Act.

Ratio Decidendi: Where the dominant features of the relationship are control, supervision, and service obligations, the remuneration is salary; and mere use of family property as security does not, without real detriment or expenditure from family funds, make the salary income of a Hindu undivided family.

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