1979 (11) TMI 95

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....s a partnership concern having four partners. In the partnership deed it was recited that three of the partners, namely, Prem Nath, Bal Kishan and Kishan Lal, had entered into partnership in representative capacities of their respective Hindu undivided families. They held the status of kartas in those families. The firm allowed various amounts as salaries to these partners for the services rendere....

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....ars for the opinion of this court : " Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the salaries paid to Shri Prem Nath, Shri Bal Kishan and Shri Kishan Lal were not allowable as a revenue expenditure of the assessee in the assessment years 1957-58, 1958-59, 1959-60, 1960-61 and 1961-62? " It is now well-settled that a HUF cannot, as such,....

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....rm as such does not come into the picture. Our view finds support from the observations of the Supreme Court in the case of CIT v. Kalu Babu Lal Chand [1959] 37 ITR 123. A perusal next of the provisions of s. 10(4)(b) of the I.T. Act, 1922, shows that it placed an absolute prohibition against allowance of expenditure in the nature of interest, salary or commission paid by a firm to any partner.....

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....ench decision of the Allahabad High Court in CIT v. Ram Laxman Sugar Mills [1973] 90 ITR 73 is entirely distinguishable inasmuch as the salary allowed there was not to the partner in his capacity as such. Rather the Central Government had set up a management board of partners under the Essential Supplies (Temporary Powers) Act. Whatever salary was allowed was in his status as authorised controller....