TMI Blog1967 (2) TMI 16X X X X Extracts X X X X X X X X Extracts X X X X ..... ded family ? " The reference arises out of the assessment made upon the Hindu undivided family of Nagar Das for the assessment year 1959-60, the accounting year being the year ending Kuar Sudi 9, Sambat 2015. Originally the assessee's family had also some other branches joint with it. A partial partition took place in that family some time in the year 1951. Originally the Hindu undivided family was carrying on business in cloth. After the partial partition, it was carried on by a partnership firm constituted of the separated coparceners. The partners in this firm are Ram Kishan, Nagar Das and Gopal Kishan. The statement of the case is clear that Nagar Das represented his Hindu undivided family which provided funds on behalf of Nagar Das for investment in the partnership business. Gopal Kishan is practising medicine in Calcutta and was not available to work in the partnership business. In the partnership deed dated October 18, 1951, it was provided that Ram Kishan and Nagar Das, who were looking after the partnership business, would be paid a remuneration of Rs. 500 per month subject to that sum being modified at any time in future. Ram Kishan died on August 6, 1957. The firm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... might have been employed by the partnership business as a paid servant and that the Tribunal committed an error in ignoring this aspect of the matter. The question that requires determination is whether this sum ad Rs. 6,000 paid to Nagar Das was in the nature of profits paid to him as representative of the Hindu undivided family or it was in the nature of salary paid to him as a servant of the partnership firm. Nagar Das was a partner in the partnership firm. A partnership is nothing but a compendious name for the partners. Whoever would be the servant of the firm would also be the servant of Nagar Das. Consequently, it is difficult to see how Nagar Das could be treated to be his own servant. In the partnership deed, which is in English, the word used is " remuneration " and not " salary " in respect of the payment to be made to Nagar Das and Shyam Sunder. The word "remuneration" is a colourless word. There is no finding recorded by the Tribunal that Nagar Das had any specialised knowledge or his services were required for any special purpose. It is noteworthy that in the deed of agreement Shyam Sunder, who was a young man and a newcomer to the business, was also given the same re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ership had nothing to do. Nagar Das was a partner on behalf of his Hindu undivided family in a representative capacity. All the profits that came to his share belonged to his Hindu undivided family. Inasmuch as we have held above that the cumulative effect of all the facts and circumstances is that it must be held that even the sum of Rs. 6,000 paid to Nagar Das was by way of additional profit and not by way of any salary in the sense of his having rendered any personal service to the firm, the entire sum of Rs. 9,334 belongs to the Hindu undivided family and no part of it can be treated to be the personal income of Nagar Das. We find support for the view we are taking from Mathura Prasad v. Commissioner of Income-tax. In that case 'M' who had become a partner with the joint family funds in a partnership firm received certain allowances from the funds of the partnership business. Inasmuch as the allowance that was received by 'M' from the partnership funds was received as a consequence of his having joined the partnership firm with the funds of the Hindu undivided family, the sum representing the allowance was included in the assessable income of the Hindu undivided family. Mr. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to Nagar Das and the work that he had to do. In the deed of agreement, even though there is a provision that the amount of Rs. 500 could be reduced both in the case of Nagar Das and Shyam Sunder, there was no corresponding provision that once that is done they would cease to work in the firm. Apart from it, it is the duty of the karta to give his whole time to the management of the business of the Hindu undivided family. In our opinion, therefore, Jugal Kishore Baldeo Sahai v. Commissioner of Income-tax is clearly distinguishable. Mr. Brijlal Gupta also placed reliance upon Piyare Lal Adishwar Lal v. Commissioner of Income-tax. In this case S's father was a treasurer of a bank until his death. After his death S was appointed as a treasurer of the bank at various branches of the bank on a monthly salary. The treasurer was responsible for the acts and omissions of his representatives whom he had appointed and other members of the staff and he indemnified the bank against any loss incurred as a result of any neglect or omission on their part. The treasurer and his staff were under the control of the bank. The treasurer was also responsible for the correctness and genuineness of hund ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
