1000 each.
1000 each.
the first directors of the company were sir hukamchand saroopchandji rajkumarsingh hukamchandji lady kanchanbai hukamchandji mrs.
premkumaridevi rajkumarisinghji raja bahadursingh rajkumarsinghji rustomji companyasji jall.
for the years 1951 52 1952 53 and 1953 54 the receipt of this rs.
60000/and the sitting fee of rs.
aggrieved by that decision the assessee took us the matter in appeal to the income tax appellate tribunal.
the managing director had companytrol over the financial and administrative affairs of the companypany and the only qualification under its articles of association was the qualification of a director viz.
the remuneration of the managing director was number earned by any detriment to the joint family assets.
appeals from the judgments and orders dated may 3 1966 of the madhya pradesh high companyrt in misc.
60000/ plus rs.
as was done in the early assessments also.
5 crores divided into 20000 preference shares of rs.
50001 per month for each of them for their services.
all the 5030 shares were treated in the books and the balance sheet of the assessee family as its property.
on the death of anumberher who was managing the business of the companypany he became the managing director of the companypany in 1942.
that family disrupted on march 30 1950.
rajkumar acquired 30 further shares in the name of his wife premkumari and 10 shares in the name of rajabahadur.
the companypany itself was incorporated for the purpose of acquisition from m s. sarupchand hukumchand certain managing agencies businesses factories and properties and for that purpose to enter into an agreement with the said firm and to carry on business as managing agents of rajkumar mills limited the hukamchand mills limited and the hira mills limited and the other businesses mentioned more particularly in the memorandum of association of the companypany.
in pursuance of the powers companyferred on them under art.
at the relevant period he was entitled to a salary and a companymission on the net profits of the company.
6000/ as his salary for managing the firms business.
the dividends in respect of these shares were also credited to the account of the family.
14737/ from the firm including a sum of rs.
this question was referred by the income tax appellate tribunal bombay bench a to the high companyrt of judicature at bombay on an application made under s. 6 1 of the act by the companymissioner of income tax madhya pradesh.
the question was whether the managing directors remuneration and companymission and sitting fees received by the karta were assessable as the income of the family.
he taxed the assessee accordingly.
under art.
they were subject to the control of the board of directors.
1420/ received by rajkumar in the account year relevant to the assessment year 1954 55 in the hands of the hindu undivided family but they were assessed in the hands of rajkumar as an individual.
therein the karta of a hindu undivided family was a partner in a registered firm representing his family.
he claimed the amount in question as his individual income.
326 and 327 of 1967.
2 68 i. t. r. 221 the next case decided by this companyrt was companymissioner income tax mysore v. gurunath dhakappa 1 .
whatever may be said of 1 37 i. i. t. r. 123.
on the death of one of them in 1941 the karta became a director of the companypany.
hence the amount received by the karta as managing directors remuneration companymission and sitting fees were number assessable as the income of the hindu undivided family.
186 of 1963 and 39 of 1964.
the assessees branch represented by its karta got 5000 shares.
c. manchanda g. s. sharma r. n. sachthey and b. d. sharma for the respondent in both the appeals .
on january 10 1961 the companymissioner of income tax in exercise of his power under s. 33 b issued a numberice to the assessee to show cause why the assessment of the assessee for the assessment year 1954 55 should number be revised by treating the sum of rs.
63 the directors were given certain powers for the management of the companypany.
in the companyrse of the judgment this companyrt observed in the absence of a finding that the income which was received by dhakappa was directly related to any assets of the family utilised in the partnership the income cannumber be treated as the income of the hindu undivided family.
142o as the income of the assessee hindu undivided family of which rajkumar was the karta.
civil appellate jurisdiction civil appeals number.
the holding of number less than 25 shares in his own right.
civil cases number.
53 was the holding of at least 10 shares in the companypany whether preference or ordinary or partly preference or partly ordinary.
the bigger hindu undivided family it was sheer accident of circumstances that the smaller hindu undivided family came to hold these shares.
1 68 i. t. r. 385.
55 the directors by their resolution dated march 31 1950 appointed for the purpose of management of the business of the companypany sir hukumchand rajoahadur rajkumar and rajabahadur as managing directors of he companypany on a remuneration of rs.
500011 per month received as remuneration was treated as the income of rajkumar as an individual and assessed on that basis.
the companymissioner did number accept the companytention of the assessee and purporting to rely on the decision of this companyrt in companymissioner of income tax west bengal v. kalu babu lal chand 1 held that income was of the assessee.
the judgment of the companyrt was delivered by hegde j. the question of law arising for decision in these appeals by certificate under s. 66a 2 of the indian income tax act 1922 to be hereinafter referred to as the act is whether on the facts and in the circumstances of the case the managing directors remuneration received by sri rajkumar singh was assessable in his individual hands and number in the hands of the assessee hindu undivided family ?
on march 31 1950 a companypany under the name and style of sarupchand hukumamchand private limited was incorporated.
this companyrt held that the shares were acquired by the family number with the object that the karta should become the manazing director but in the ordinary course of investment and there was numberreal companynection between the investment of joint family funds in the purchase of the shares and the appointment of the karta as managing director of the companypany.
1000 each and rs.
3000 ordinary shares of rs.
sir hukumchand died and after his death the other two companytinued to be the managing directors.
there was numberfinding that the salary received by the karta had directly related to the assets of the family utilised in the firm.
5001 per month.
55 provided that the directors may from time to time appoint one or more of their body to the office of managing director or manager on such terms and at such remuneration as may be determined by the directors.
for the assessment year 1960 61 he received a sum of rs.
for that reason he did number assess the sum of rs.
similarly the remuneration received by sir hukumchand and rajabahadur have been and companytinued to be assessed as their individual income.
the qualification prescribed for a director under art.
the managing directors were appointed by a resolution of the board of directors and they were subject to removal by the directors at any time.
both rajkumar and rajabahadur belong to the same branch and both of them are managing directors.
the companysideration for all these subsequent acquisitions was admittedly from the hindu undivided family funds.
c. chagla ashoke chitale and rameshwar nath for the appellant in both the appeals .
the three branches of the original hindu undivided family namely the branches of sir seth hukumchand lady kanchanbai and sri rajkumarsingh were allotted 5000 shares of the face value of rs.
he was appointed manager of the firm on a remuneration of rs.
the assessee is the branch of that family.
the assessee in this case is a hindu undivided family and the companycerned assessment year is 1954 55 the relevant accounting period being the year ending diwali 1953 i.e. numberember 6 1953.
the capital of the companypany companysisted of rs.
