9911796707
TMI Blog1968 (2) TMI 18X X X X Extracts X X X X X X X X Extracts X X X X ..... ,086 of the face value of Rs. 100 each. There are only three shareholders, S. Trilok Singh, S. Satwant Singh and S. Anup Singh. The assessee, a Hindu undivided family, consisting of Trilok Singh and his sons, holds 2,501 shares. The remaining shares are held by Satwant Singh, who is Trilok Singh's real brother, and by Anup Singh, who is Trilok Singh's brother-in-law. The company carries on the business of plying passenger buses and goods trucks. S. Trilok Singh was appointed managing director of the company for a period of 20 years on a monthly remuneration of Rs. 500. The question arose whether the salary of Rs. 6,000 received by S. Trilok Singh annually should be treated as his personal income or the income of the Hindu undivided family ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... point was reversed in appeal by the Income-tax Appellate Tribunal, Delhi Bench. The Tribunal held that the remuneration paid to S. Trilok Singh ought to be assessed in the individual hands of S. Trilok Singh, and not in the hands of the assessee-Hindu undivided family. Being aggrieved by that decision the Commissioner of Income-tax filed two separate applications under section 66(1) of the Act for a reference to the court. Those applications were dismissed by the Tribunal on the ground that no question of law arose in these cases. The Commissioner of Income-tax has, therefore, filed before this court two separate applications under section 66(2) of the Act for directing the Tribunal to state a case. The Commissioner of Income-tax has propo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vestment of the joint family funds in the company and the salary earned by S. Trilok Singh are related to each other as cause and effect." This is the inference drawn by the Tribunal from the facts of the case. The only important fact bearing on this question mentioned by the Tribunal was that S. Trilok Singh did not possess any academic qualifications or special training in automobile engineering. The Tribunal observed that the company was a sort of family affair. That observation is misleading. We have seen that the three directors of the company were S. Trilok Singh, S. Satwant Singh and S. Anup Singh. They were not members of the same family. Trilok Singh and Satwant Singh were real brothers, while Anup Singh was Trilok Singh's broth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the family property. The salary of S was not the income of the Hindu undivided family. The salary was the income of the individual, S, and not the income of the Hindu undivided family. We note that, in the instant case, when S. Trilok Singh was appointed managing director, he held only one share. It appears that subsequently the Hindu undivided family acquired 2,500 shares. 2,500 shares acquired by the Hindu undivided family had nothing to do with the appointment of S. Trilok Singh as the managing director. Nor has it been shown that the solitary share possessed by S. Trilok Singh at the time of his appointment as managing director came from joint family funds. Under the circumstances, we are unable to accept the view taken by the Trib ..... X X X X Extracts X X X X X X X X Extracts X X X X
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