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TMI Blog1980 (7) TMI 2X X X X Extracts X X X X X X X X Extracts X X X X ..... an as its karta and consists of himself, his wife and children. There is partnership firm known as Sant Ram Nikka Mal in which the karta Shri Brij Mohan is a partner. The statement of case made by the Income-tax Appellate Tribunal sets out the history of the joint Hindu family which has been partitioned in various stages. Initially, the firm consisted of Shri Sada Nand and Shri Parma Nand who were brothers. After the death of Shri Sada Nand, the partnership consisted of Shri Parma Nand and the widow of Shri Sada Nand, i.e., Shrimati Raj Kumari. Later, Shri Ram Lubhaya became a working partner and the firm was reconstituted. Shri Brij Mohan was a minor admitted to the benefits of the partnership and got an allowance of Rs. 250 per month. His ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... partment. In the assessment year 1969-70, Shri Brij Mohan claimed that the income from the share in the partnership belonged to the Hindu undivided family while the salary income belonged to him individually. He claimed he was a working partner and he had systematically gained experience in business. The salary was claimed by him on account of the services rendered to the firm and not on account of the invested capital. The Income-tax Officer rejected the claim and included the entire income from shares as well as salary in the hands of the assessee-family. This position was accepted by the Appellate Assistant Commissioner who also came to the conclusion that the sudden jump in the salary after April 1, 1965, was due to the control of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9 (SC), delivered by the Supreme Court as well as two decisions of this court, viz., CIT v. B. N. Bhaskar [1971] 82 ITR 345 and another unreported case also decided by this court, viz., CIT v. Bhai Tarlochan Singh. In all these decisions, the principles settled by the Supreme Court have been applied to various circumstances. The question for consideration in all these cases was whether the income had been derived by utilisation of the funds of the Hindu undivided family or was due to the personal services of the assessee, i.e., the partner in question. In the case of Mathura Prasad, the sum received by the partner who was acting as manager was Rs. 1,500. There was a finding by the Tribunal that Mathura Prasad had become a member of the par ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s to be settled by the reasoning adopted by the Tribunal. The reasoning is as follows. At first, Shri Brij Mohan was getting remuneration of Rs. 250 which was increased to Rs. 400 which had remained from November 1, 1955, till it was suddenly raised to Rs. 1,400 on April 1, 1965. The Tribunal held that the sum of Rs. 400 was undoubtedly received for the services rendered by Shri Brij Mohan as opposed to being a return on account of the investment by the joint family. However, it was concluded that the sudden increase of Rs. 1,000 monthly in the case of Shri Brij Mohan and Shri Man Mohan from April 1, 1965, was not motivated for remunerating these partners for services rendered. The following were the reasons given by the Tribunal : " In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reasons stated already, be considered in the hands of the individual. We, therefore, reduce the inclusion of the salary in the assessment from Rs. 16,800 to Rs. 12,000." This reasoning appears to contain several conclusions of fact. The Tribunal held that the sum of Rs. 1,000 p.m. received by Shri Brij Mohan after April 1, 1965, was not on account of any services rendered by him, but had something to do with the fact that he himself along with his family members were the three partners. It is significant that the two partners who got the increase in the salary by Rs. 1,000 monthly were Shri Brij Mohan and Shri Man Mohan and the third partner was the mother. This lends support to the conclusion of the Tribunal that this increase was not on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he profits of the firm. There being a conclusion of fact on this point, it must be held that this court would have no jurisdiction to hold that the sum of Rs. 1,000 p.m. also is to be included in the personal income of Shri Brij Mohan and not in the assessable income of the joint family. It must also be said here that this case should not be treated as a precedent for allowing a bifurcation of the sum being paid as a salary to a karta into two portions. It so happens that the jump from Rs. 400 to Rs. 1,400 in the one case and from Rs. 200 to Rs. 1,200 in the case of the other brother was so steep that it cannot be justified as being on account of rendering of personal services and, therefore, this case is in a sense exceptional, as part of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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