TMI Blog2007 (4) TMI 45X X X X Extracts X X X X X X X X Extracts X X X X ..... 37/- received by Shri Lachhman Dasss Bhatia from the firm M/s Chetan Dass Lachhman Dasss in which he was a partner as Karta of his HUF, is includible in the total income of the Assessee HUF? 2. Whether, on the facts and in the circumstances of the case, the HUF was barred by Section 247 of Income Tax Act, 1961 from claiming in its Karta from the firm in which he was a partner in his representative capacity and so allocated to his share under Section 67 of Income-tax Act, 1 961, was not the real income of the HUF but was the individual income of the Karta?? 2. A perusal of the second question reveals that there are some typing mistakes but essentially both the questions raise the issue whether the salary and commission received by Lac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n between the joint Hindu Undivided Family, who is the partner, and the remuneration paid, then the remuneration is taxable as the income of the HUF. On the facts of that case, it was held that since Prem Nath was a working partner and there was no evidence on record to suggest that the remuneration agreed to be paid was not for services rendered to the partnership, it was held that the income received by Prem Nath was remuneration for services rendered by him and not the HUF. 6. In a subsequent decision rendered by this Court in Pannalal Girdharilal vs. Commissioner of Income Tax (1971) 81 ITR 624, the law laid down by the Supreme Court was applied and it was noted that the Supreme Court had effectively brought out a clear distinction ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l and sufficient" connection between the joint family funds and the salary and commission paid by the firm to Lachhman Dass Bhatia. There is no evidence on record to show that Lachhman Dass Bhatia has rendered any services which could dispel this view or to show that there was no "real or sufficient" Connection between the management of the firm and the salary or commission paid to Lachhman Dass Bhatia for any services said to be rendered by him. 9. This being the position, we answer the questions referred to us by concluding that the salary and commission received by Lachhman Dass Bhatia is includible in the total income of the Assessee HUF and that it was not the individual income of Lachhman Dass Bhatia. 10. The referenced is ans ..... X X X X Extracts X X X X X X X X Extracts X X X X
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