9911796707
TMI Blog1993 (10) TMI 50X X X X Extracts X X X X X X X X Extracts X X X X ..... ts of the case are that the firm, Masuria Saree Centre, comprised four partners, namely, Bhanwarilal, Kanwarlal, Shantilal and Jatanlal. While submitting the return of the Hindu undivided family, a salary of Rs. 9,000 was claimed to have been paid to Sri Jatan Lal in his individual capacity in the return of income of the Hindu undivided family. The Income-tax Officer held that whatever amount has been received from the firm that will be the income of the Hindu undivided family and the said amount of Rs. 9,000 cannot be allowed as deduction. In appeal before the Appellate Assistant Commissioner of Income-tax, the matter was agitated and it was submitted that there was an agreement dated November 15, 1977, between the Hindu undivided family ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent and the arrangement was to safeguard the interest of the Hindu undivided family and, therefore, looking to the substantial share of income, the monthly salary at Rs. 750 could not be said to be unreasonable. The submission of learned counsel for the Revenue, is that the assessee failed to produce the copy of the agreement before the Income-tax Officer and the Appellate Assistant Commissioner has disbelieved the existence of the said document by observing that " I am, therefore, not inclined to accept this new piece of evidence ". The other factors which were taken by the Appellate Assistant Commissioner was that Sri Jatan Lal is the only major coparcener of the Hindu undivided family and that the Hindu undivided family has not paid any ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mmercial and business expediency which has to be seen for the service which is rendered by the karta in consideration of a remuneration. For remuneration another factor which is to be examined is that a Hindu undivided family is entitled to deduct the salary paid to the karta or to any other member of the family if such payment is under a valid agreement and is expedient in the interest of the business of the family and the payment is genuine and is not excessive or unreasonable. The agreement could be in writing or an oral agreement. The karta was looking after the interest of the family business since the last 7 to 8 years and no payment was made in the past. It is also not brought on record as to what additional services were rendered by ..... X X X X Extracts X X X X X X X X Extracts X X X X
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