9911796707
TMI Blog1982 (5) TMI 77X X X X Extracts X X X X X X X X Extracts X X X X ..... technical hand and has sufficient experience in the line of manufacture and sale of motor parts. The HUF wanted his services to be utilised in the joint family business run by it. Therefore, on 3-10-1977 when the business was actually running, the HUF through Shri Badri Dass as its karta on one hand, and Shri Badri Dass, individual, on the other hand, entered into an agreement, the terms and conditions of which are as under : "1. That the party of the 1st part shall pay a monthly salary of Rs. 1,500 to the party of the 2nd part. The said amount of salary may be increased or decreased according to the trading results of the said business. It is, however, stipulated that the party of the 2nd part shall be entitled to his salary from the pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ip between the HUF and the assessee. According to him, no person can be an employee and employer at the same time. He, therefore, held the view that the assessee, having received the income from himself, was liable to be taxed under the head 'Income from other sources'. The standard deduction under section 16(i) was, though claimed, but not allowed. 4. The assessee took the matter in appeal before the AAC but the AAC also held that in the absence of an employer and employee relationship, the amount of Rs. 18,000 was to be taxed under the head 'Income from other sources' as done by the ITO. On this issue, the appeal of the assessee was dismissed. Hence, the present proceedings. 5. The learned counsel for the assessee submitted before me ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shows that it is salary paid by the HUF to the coparcener, it should not have been treated as anything else but salary and if it is treated as salary, deduction under section 16(i) automatically follows. 7. The learned counsel for the assessee submitted that the Appellate Tribunal, Bombay Bench 'A' in the case of Mohamad Ibrahim Sehhdad v. ITO [1980] 18 CTR (Bom.-Trib.) 3 has held that standard deduction under section 16(i) is available to a partner if he receives salary income from the firm. In such cases the firm is the employer and the partner is the employee. Relying on the ratio of this judgment of the Tribunal, it was contended that the same treatment should be given in the case of a HUF paying similar salary or remuneration to one ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... acting in a dual capacity---acting as karta on behalf of the HUF and also acting as an individual on behalf of self. This exactly is the position in this case. Moreover, it is also a trite law that any coparcener of a HUF, having acquired competence in any field which can be put to use for purposes of recompense, need not necessarily use it for the use of and benefit of the HUF to which he belongs even if such a coparcener, at a particular point of time, is acting as its karta. Therefore, there is no bar in law, in my humble opinion, which prohibits the karta of a HUF entering into an agreement with himself acting in a dual capacity, placing his services at the disposal of the HUF for recompense and this is exactly the case before me. 10. ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
