the firm as one of its partners but his share of the capital was subscribed by his joint family.
7,500 Rupees seven thousand five hundred paid to Shri M. D. Dhanwatey for rendering services to the firm, companyld be included in the total income of the assessee family?
5 of 1962.
Clause 16 is to the following effect The said Baburao alias Vasantrao Dattaji Dhanwatey shall be paid remuneration at the rate of Rs.
three pies.
Appeals front the judgments and orders dated July 23, 1963 and July 23, 1964 of the Bombay High Court, Nagpur Bench in Income tax Reference No.
Krishnarao Dattaji Dhanwatey.
Shamrao Dattaji Dhanwatey.
Two annas.
For the year 1954 55 there was a deed of partnership dated April 1, 1951 governing the relationship of the partners.
assessment year involved in this appeal is 1954 55, the companyresponding accounting year being the year ended September 30, 1953.
K. Daphtaiy, Attorney General, A. N. Kirpal and R. N. Sachthey, for the respondent.
Ramaswami, J. This appeal is brought, by certificate on behalf of the assessee from the judgment of the Bombay High Court dated July 23, 1963 in Income Tax Reference No.
L. Satighi, A. S. Bobde, P, C. Bhartari and O. C. Mathur, for the appellant in all the Appeals .
The assessment years involved in these appeals are 1954 55 and 1955 56.
Clause 4 of the partner ship deed enumerated the share capital companytributed by the partners as follows Baburao alias Vasantrao Dattaji Dhanwatry.
Two annas.
Balu alias Yeshwantrao Dattaji Dhanwatey.
5 of 1962 and 85 of 1963.
The rights of the partners were governed at the relevant time by a partnership agreement dated April 1, 1951.
The 1 1967 1 S C. R 416.
The Tribunal accepted the companytention of the assessee that Shri V. D. Dhanwatey was rendering services to the firm and was getting salary ever before his family became a partner in the firm.
The assesee preferred a further appeal to the appellate Tribunal which rejected the companytention of the assessee that the amount of Rs.
The assessee took the matter in further appeal before the Income tax Appellate Tribunal in Bombay.
Me Tribunal, by its order dated September 4, 1962 dismissed the appeal of the assessee.
three pies.
The share capital of Shri M. D. Dhanwatey was entirely companytributed by the assessee Hindu undivided family.
7,500 was earned by Shri M. Dlianwatey in his individual capacity and that it should number have been included.
As directed by the High Court, the Appellate Tribunal stated a case on the following question of law under s. 66 2 of the Indian Income tax Act, 1922 Whether on the facts and circumstances of the case, the payment of Rs.
It was said that on partition of the larger Hindu undivided family in 1939 of which Shri V. D. Dhanwatey was member, Shri V. D. Dhanwatey representing the small Hindu undivided family of which he became the karta, became a partner in the said firm and received salary from it.
Act, 1922 on the following question of law Whether on the facts and in the circumstances of the case, the sum of Rs.
was delivered by RAMASWAMI J. HEGDE J. delivered a dissenting Opinion.
At the instance of the assessee the Appellate Tribunal stated a case to the High Court under s. 66 1 of the Income Tax.
three pies.
There was, however, numbermaterial change in the terms of the two deeds of partnership.
The Income tax Officer, Special Investigation Circle B, Nagpur, by his assessment order dated May 28, 1955 negatived the companytention of the assessee.
10,50,000.
But the Tribunal held that Shri V. D. Dhanwatey who was a partner of the firm companyld number at the same time be an employee of the partnership firm and the remuneration received by him must be held to be only an adjustment of the share in profits of the Hindu Undivided family in the partnership.
1371 73 of 1966.
CIVIL APPELLATE JURISDICTION Civil Appeal No.
The capital of the partnership under the partnership deed was Rs.
The judgment of WANCHOO, C.J., BACHAWAR, RAMASWAMI AND MITTER, JJ.
By its judgment dated July 23, 1964 the High Court answered the reference against the assessee, holding that the entire capital companytribution was made by the Hindu Joint family, that the remuneration paid to Shri V. D. Dhanwatey was paid under a clause of the deed of partnership, that the remuneration paid was only an increased share in the profits of the firm paid to Shri V. D. Dhanwatey as representing the Hindu undivided family and so the said amount of remuneration was taxable in the hands of the assessee.
Two annas.
Ramaswami, J. These appeals are brought, by certificate, on behalf of the assessee from the judgment of the Bombay High Court dated July 23, 1964 in Income Tax Reference No.
1,000 Rupees One thousand per month, the said Shamrao Dattaji Dhanwatey shall be paid remuneration at the rate of Rs.
The remuneration provided for Shri V. D. Dhanwatey was later raised to Rs.
18,000 in each year.
The Income Tax Officer rejected the companytention of the, assesse.
For the year 1955 56 there was another partnership deed dated October 1, 1953.
Dhanwatey joined.
1,250 Rupees Twelve Hundred Fifty per month, the said Marotirao Dattaji Dhanwatey shall be paid remuneration at the rate of Rs.
700 Rupees seven hundred per month.
1,500 per month.
The assessee showed the said amount in his return in Section D. It was companytended on behalf of the appellant that the amount was number taxable because it was the income earned by Shri V. D. Dhanwatey for the service , Tendered by him to the partnership and the amount companystituted his individual income and number the income of the Hindu Undivided Family.
The appeals of the assessee were disallowed by the Appellate Assistant Commissioner of Income tax.
It was companytended by the assessee that Shri V. D. Dhanwatey was an employee of the firm even before the family was taken as a partner.
The business carried on by the partnership was of lithography and art printing and was carried on through a Press under the name and style of Shivraj Fine Art Litho Works.
The High Court found that he was getting the same remuneration even before the partnership came into exitence.
Clause 15 provided that the various adult members of the, partnership shall devote theirwhole time and attention to the partnership in the sphere of their respective duties.
The assessee took the matter to, the Appellate Assistant Commissoner but the appeal was dismissed.
A. 1371 of 1966.
Marotirao Dattaji Dhanwatey.
85 of 1963.
For the accounting period relating to the assessment years 1954 55 and 1955 56 Shri V. D. Dhanwatey had been paid Rs.
It was urged that the said amount should be taxed in the hands of Shri V. D. Dhanwatey in his status as individual and number in his status as Karta of the Hindu Undivided family.
Nagpur.
The appellant hereinafter called the assessee is a Hindu Undivided family represented by its Karta, Shri V. D. Dhanwatey.
Two annas.
Shankarao Dattaji Dhanwatey.
Two annas.
Three annas.
18,000 was rightly included in the total income of the assessee family for the assessment years 1954 55 and 1955 56?
Shri M. D. Dhanwatey was a partner in the partnership firm carrying on business under the name and style of M s. Shivraj Fine Art Litho Works.
in the taxable income of the assessee.
Under the deed of partnership he was designated as the general manager and his remuneration was fixed at Rs.1,500 per month.
The appellant hereinafter called the assessee is a Hindu undivided family of which Shri M. D. Dhanwatey is the Karta.
