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TMI Blog1967 (1) TMI 12X X X X Extracts X X X X X X X X Extracts X X X X ..... adhar Baijnath. The latter firm was a firm of the three Bagla brothers. Each of the three Bagla brothers was representing his smaller Hindu undivided family, they being respective, kartas of their families. The said firm was registered. The firm of the three brothers acquired a controlling interest in a public limited company known as Indian Textile Syndicate Ltd. The dividend income therefrom was divided between the three Bagla brothers, and, ultimately, their shares were credited to their respective families and assessed in the hands of each of these in the status of a Hindu undivided family. Sri Rameshwar Prasad Bagla was appointed the managing director of the said company. A remuneration of Rs. 21,600 was received by him as a director. It was claimed that the sum was the personal income of Rameshwar Prasad Bagla and, therefore, should be excluded from the assessment of the Hindu undivided family. The Income-tax Officer, for the reasons given by him in the assessment order for the immediately preceding assessment year 1952-1953, included the said sum in the assessment of the assessee-Hindu undivided family. The assessee had claimed, vide his letter dated August 18, 1952, sent al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Messrs. Gangadhar Baijnath which has the controlling interest in the company is a partnership of the three Bagla brothers representing the three Hindu undivided families. In other words, the controlling interest in the company was acquired only with the family funds of these three brothers, and mainly, if not solely, because of this controlling interest, the assessee was enabled to become the managing director." Accordingly, the department's appeal was allowed and the sum of Rs. 21,600 was held to have been rightly included by the Income-tax Officer in the assessment of the family. Hence, this reference at the instance of the assessee. Before us also the main attempt of Mr. Mehrotra has been to distinguish the Supreme Court decision in Kalu Babu Lal Chand's case. The facts of no two cases can ever be the same. As pointed out by the Supreme Court in Abdul Kayoom v. Commissioner Income-tax similarity is not enough because even a single significant detail may alter the entire aspect." Further, in deciding such cases, we should avoid the temptation to decide the temptation to decide the case as said by Cordoza in the Nature of Judicial Process, by matching the colour of one case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nto a partnership with outsiders, the karta acted in his individual capacity and for his own benefit or he did so as representing his joint family and for its benefit is a question of fact. If for the purpose of contribution of his share of the capital in the firm, the karta brought in moneys out of the till of the Hindu undivided family, then he must be regarded as having entered into the partnership for the benefit of the Hindu undivided family and, as between him and the other members of his family, he would be accountable for all profits received by him as his share out of the partnership profits and such profits would be assessable as income in the hands of the Hindu undivided family." In Kalu Babu Lal Chand's case the Supreme Court specifically approved the decision of the Bombay High Court in In re Haridas Purshottam. The facts of that case are almost akin to the facts of the present case and they may, therefore, be set out. There were three brothers, one of whom was Haridas Purshottam and they were separate, but each of them was joint with his own sons. The three brothers formed a partnership and it was admitted that Mr. Haridas Purshottam held his shares as karta. In the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rther be noticed that in Kalu Babu Lal Chand's case the Supreme Court was at pains to point out that the Madras High Court had overlooked the principles laid down by the Judicial Committee in Gokul Chand v. Hukum Chand Nathmal, where it was held that there could be no valid distinction between the direct use of the joint family funds and the use which qualified the member to make the gains on his own efforts. In that case a member of the joint family entered the Indian Civil Service, no doubt by reason of his intelligence and other attainments, he had entered into a personal agreement with the Secretary of State in Council, and he received his salary for rendering his personal service, but, as all that was made possible by the use of the joint family funds which had enabled him to acquire the necessary qualification, his earnings were held to be a part of the joint family property. In the present case, the best that can be said for the assessee is that the family funds were not used directly but indirectly through the firm of the three Bagla brothers, Messrs. Gangadhar Baijnath. But on the view expressed by the Judicial Committee, which was approved by the Supreme Court, the indi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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