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TMI Blog1976 (8) TMI 45X X X X Extracts X X X X X X X X Extracts X X X X ..... aghunandan Saran, the karta, his wife and the minor children. The karta was a partner in 5 firms as a representative of the family. These firms were : M/s. Brijlal Kishan Lal, M/s. Dharam Prakash Vikram Sain, M/s. Dharam Prakash Nagalia Co., M/s. Ramnath Gupta and Co. and M/s. Kishan Lal Open Pan Sugar Plant. In the accounts of the firm, M/s. Brij Lal Kishan Lal, an amount of Rs. 500 per month, i.e., Rs. 6,000 per annum, was debited to the account of the family in the books of the firm and the corresponding credit was given to the account of Sri Raghunandan Saran. The entry was passed at the end of each year. The assessee claimed before the Income-tax Officer that it was entitled to deduction of Rs. 6,000 paid by way of salary to the kart ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not excessive. It also held that the amount of Rs. 6,000 that was debited in the account of the firm, M/s. Brijlal Kishan Lal to the account of the family represented remuneration paid to Raghunandan Saran for his looking after the interest of the family in all the firms including the firm in question. The controversy raised appears to be settled by the principles laid down in two decisions of the Supreme Court in the case of Jitmal Bhuramal v. Commissioner of Income-tax [1962] 44 ITR 887 (SC) and Jugal Kishore Baldeo Sakai v. Commissioner of Income-tax [1967] 63 ITR 238 (SC). In Jitmal Bhuramal's case [1962] 44 ITR 887 (SC) it was held that the Hindu undivided family was entitled to deduct the salaries paid to the junior members, if t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Hindu undivided family consisted of Baburam, the karta, his brother, Gobardhan Dass, and their sons. The sons were minors and the only two adult male members were Baburam and Gobardhan Dass. Baburam, the karta, had written to Gobardhan Dass that as he was managing all the business, he ought to get a salary of Rs. 1,000 per month which was promptly accepted by Gobardhan Dass. Now, in Jugal Kishore Baldeo Sahai's case [1967] 63 ITR 238 (SC) it has not been laid down as to how an agreement regarding remuneration is to be brought into existence. It is true that an agreement need not always be in writing and can be inferred from the conduct of the parties. In the instant case, we have seen that the Hindu undivided family consisted of only thre ..... X X X X Extracts X X X X X X X X Extracts X X X X
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