9911796707
TMI Blog2000 (9) TMI 34X X X X Extracts X X X X X X X X Extracts X X X X ..... . The following question has been referred for the assessment years 1968-69, 1969-70, 1970-71 and 1972-73 : "Whether, on the facts and in the circumstances of the case, the Tribunal was correct in law in holding that the income from the commission and the interest thereon are to be assessed in the assessment of the Hindu undivided family of which the assessee was the karta, by reason that the commission was impressed with the character of the Hindu undivided family, and (not ?) in the assessment of the assessee as his individual income: For the assessment years 1973-74, the following question has been referred : "Whether, on the facts and in the circumstances of the case, the Tribunal was correct in holding that the income from the co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ares and as a result of such issue, twenty-seven more shares were issued to the assessee and his total shareholding came to 77. By a declaration dated October 20, 1967, the assessee claimed to have thrown the said seventy-seven shares into the common hotchpotch of his Hindu undivided family (in short the "HUF"). On the basis of the said declaration, dividend income in respect of the shares was assessed in the hands of the Hindu undivided family. Though the assessee claimed that the commission and the director's fee received by him as managing director was the income of the Hindu undivided family of which he was the karta, the Assessing Officer rejected the claim. He took the view that the assessee became a director of the company only becau ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es rendered in his individual capacity or as a return for the investment made by the Hindu undivided family. In the facts of the present case, it was submitted that there was no nexus between the investment purportedly made by the Hindu undivided family in the shares and the income earned by the assessee by way of director's fee and commission, etc. There is no appearance on behalf of the assessee in spite of notice. In Raj Kumar Singh Hukam Chandji v. CIT [1970] 78 ITR 33 (SC), the relevant principles were succinctly stated by the apex court. It was observed that in determining whether the remuneration received by an individual is the income of the individual to whom it is purported to have been given or that of the Hindu undivided fam ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... du undivided family. On the contrary, subsequently, the individual funds were impressed with the characteristic of the joint family property by the process of blending and throwing into the common hotchpotch. That in essence did not change the essential characteristic attached to the directorship of the assessee. The fact that a qualification of holding shares worth Rs. 5,000 was prescribed by the articles of association, did not mean that every person who held shares worth of Rs. 5,000 was to automatically become a director. That was only one of the requirements ; otherwise every person who held shares worth Rs. 5,000 would have become a director of the company. Factually, that is not so. In other words, as observed by the apex court in. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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