1957 (9) TMI 70

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....ENT Tendolkar, J. A very short question of law arises for determination upon this reference, and the question is: "Whether the sum of Rs. 18,000 was legally included in the assessee family's total income?" The assessee is a Hindu undivided family. Its karta is on V.D. Dhanwatay. There was a business known as Shivaji Fine Art Litho Works which was carried on by a partnership u....

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....at what was paid to Dhanwatay in the form of remuneration was only for the purpose of adjustment of the rights inter se between the parties. In that view, the Tribunal considered that the remuneration received was received by him on behalf of the Hindu undivided family and was, therefore, properly included in the income of the Hindu undivided family. Now, in the first instance, it must be noted....

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....u undivided family under a mistake of law. Now, Mr. Thakar, in support of his argument, has drawn our attention to three reported decisions in Commissioner of Income-tax v. S.N.N. Sankaralinga Iyer [1950] 18 I.T.R. 194, Murugappa Chetty & Sons v. Commissioner of Income-tax [1952] 21 I.T.R. 311 and Knightsdale Estates v. Commissioner of Income-tax [1955] 28 I.T.R. 650 and the principle of law that ....

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.... the property of the joint family of which he was the karta." Therefore, the ratio is quite clear, that if it is established that the remuneration was for services rendered and without detriment to the family property, then it is the individual income of the karta and not that of the Hindu undivided family. Now, apart from the clause in the partnership deed that V.D. Dhanwatay shall be designat....