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TMI Blog1982 (1) TMI 59X X X X Extracts X X X X X X X X Extracts X X X X ..... der the husband was to be paid a salary of Rs. 1,000 per month for looking after the interests of the family. At that time, the family had made investments in various partnership firms through the karta, namely, the husband. The other source of income of the HUF was from interest on loans. The HUF claimed deduction of a sum of Rs. 12,000 as revenue expenditure on the ground that it was salary paid to the karta for looking after the family's business interests. The ITO disallowed the claim. He held that in substance the karta was paying salary to himself in his individual capacity. He further held that the salary paid was excessive. The assessee went up in appeal but failed and then went up to the Tribunal in further appeal. The Tribunal als ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as not put forward the case that the karta had to render any specific services in order to earn the income for the family. There is not even whisper in the judgment of any of the three authorities below that the assessee submitted that the karta was required to carry on business activities in any of the firms in which he was a partner representing the family or that he had to do any specific services in connection with the business of those partnership firms. So far as the investments by way of loans are concerned, it is obvious that nothing much has to be done except to see that the interests are paid and the loans are repaid as and when the debt becomes due. It is on this basis that the Tribunal emphasised that no specific services were d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was bona fide. The ITO also held that the salary paid was excessive. This finding does not appear to have been specifically challenged before the Tribunal. That is why we do not find any mention of it in the appellate judgment of the Tribunal. These facts distinguish the present case from the case of Shankarlal H. Dave v. CIT [1980] 124 ITR 733 (Guj). There, services were rendered by the karta in several partnership businesses. The question was whether he was rendering the services as a partner or as a representative of the HUF. The High Court held that in view of the agreement and on the facts, the karta was rendering services as a representative of the family and so the agreement was bona fide and dictated by commercial expediency. In ou ..... X X X X Extracts X X X X X X X X Extracts X X X X
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