were treated the busies of the joint family, and on partition were allotted to the assessee.
In companyputing the income of the assessee as an individual the Appellate Assistant Commissioner has directed certain modification to be made, and pursuant thereto, the assessments of the assessee and of the Hindu undivided family of which the assessee was the karta were rectified.
Dividends from the shares standing in the name of the assessee were credited number to the personal account of the assessee but to the account of the Hindu undivided family.
The question relating to jurisdiction of the Commissioner to revise to the order of the Income tax Officer present little difficulty.
At the instance of the companymissioner of Income tax, following question was referred by the Tribunal to the High Court of Kerala Whether, on the facts and in the circumstances of the case, of the Tribunal was justified in holding that the income from salary, companymission and sitting fees obtained by Sri P. N. Krishna Iyer from M S. P. S. N. Motors Private Ltd., Trichur, represented his individual income and number the income of the Hindu undivided family of which he is the karta ?
At the instance of the assessee the following question also was referred by the Tribunal Whether the Commissioner has jurisdiction to revise the order of the Income tax Officer in view of the decision of the Appellate Assistant Commissioner in appeals for the assessment years 1954 55 to 1957 58 in the assessment of Sri P.N. Krishna Iyer in the status of an individual?
On the same day the directors approved the purchase from the Hindu undivided family of the assessee of assets but number the liabilities of the transport business valued at Rs.
100 each.
On September 28, 1952, the companypany passed a special resolution that in companysideration of the valuable services rendered by the assessee in the promotion of the companypany and of the large sacrifices made by him in agreeing to place his services at the disposal of the companypany and the benefit that the companypany received on account of his long experience, goodwill and reputation in this line of business, the assessee be allotted 4,880 fully paid up shares of the companypany.
In the meantime, on the July 3, 1952, a private limited companypany, P. S. N. Motors Private Ltd. was floated with the object of taking over the motor transport business carried on by the assessee.
The assessee purchased 100 shares of the companypany of the face value of the Rs.
The High Court answered the question referred at the instance of the Commissioner in the negative and the question referred at the instance of the assessee in the affirmative.
100 each.
In the books of the companypany credit entries were posted in the name of the Hindu undivided family.
8,01,074 1 4.
The assessee has appealed to this companyrt with special leave granted by this companyrt.
In appeal against the order, the Tribunal reversed the order the of the Commissioner and ordered that the these items be excluded from the assessment of the Hindu undivided family.
Counsel for the assessee urged that the Commissioner has numberpower under section 33B to revise an order the Income tax officer it had been carried in appeal to the Appellate Assistant Commissioner, and also urged that an order passed by an Income tax officer in pursuance of a direction by the Appellate Assistant Commissioner companyld number be revised by the Commissioner in exercise of the power under section 33B. But in our judgment there is numberground for holding that the Commissioner has attempted to revise the order of the Appellate Assistant Commissioner.
An application held by the assessee before the 1st Additional income tax officer Trichur, or for recording the partition was accepted.
The Income tax officer brought to tax in the assessment year 1954 55 the remuneration received by the assessee from the companypany together with the companymission, sitting fee and income from property business and other sources as the separate income of the assessee.
The income tax Officer then carried out the direction and included the income from property, business and other sources in the total income of the Hindu undivided family and made companyresponding modification in the assessment of the assessee of as an individual.
But the Commissioner of a Income tax being of the opinion that the order passed by the Income tax Officer was wrong and prejudicial to the interests of the revenue, revised the order of the Income tax Officer exercising power under section 33B of the Income tax Act, 1922 and included the income from salary, companymission and sitting fee aggregating to Rs.
43,240 in the total income of the Hindu undivided family.
On August 18, 1952, the directors passed certain resolutions relating to the repayment ol the amount due to the Hindu undivided family.
The Appellate Assistant Commissioner modified that order, and directed that the income other than salary, companymission and sitting fee received by from the companypany by included in the assessment of the Hindu undivided family.
By the articles of association, the assessee was to be the governing director of the companypany for life and to drawn such remuneration and exercise such powers detailed in the agreement to be entered number between him and the companypany in that behalf, and so long as he held the officer of governing director, the general management of the companypanys business was to remain in his hands.
Sub section 1 of section 33B of the Income tax Act, 1922, provides The Commissioner may all for and examine the record of any proceeding under this Act and in he companysiders that any order passed therein by the Income tax Officer is erroneous in so far as it is prejudicial to the interests of the revenue he may pass such order thereon as the circumstance of the justify, including an order enhancing or modifying the assessment, or cancelling the assessment and directing a fresh assessment.
The order of assessment of the Hindu undivided family was never challenged in appeal to the Appellate Assistant Commissioner.
The Commissioner revised the order passed the by the Income tax Officer in so far as it related to the Hindu undivided family.
On the net profit.
Shah J. P. N. Krishna Iyer hereinafter called the assessee set up in 1923 a motor transport business in the former State of Travancore.
10,000 paid by the assessee for purchasing 100 shares of the companypany belonged to the undivided family and were number firm the personal found the assessee.
On August 18, 1952, the assessee was appointed by the companypany governing director with an officer allowance of Rs.
3,000 per mensem of a companymission of 15 per cent.
The companypany took over the assets belonging to the family and merely credited the family with rupees eight lakhs odd.
The companypany valued the services rendered by the assessee in the promotion of the companypany and the very large sacrifices he had made in agreeing to the place his services at he disposal of the companypany and the immense benefit that the companypany received on account of the his long experience goodwill and reputation in this line of business, at rupees five lakhs and allotted to the assessee 4,880 fully paid up shares of the companypany of the face value of Rs.
In 1945 there arose disputes between the assessee and his brother about he division of estate of the joint family of which they were members.
The disputes were settled by mutual agreement dated October 23, 1951, and the motor transport business together with the workshop, stores, agency, cinema companypanies, etc.
