The Treasurer and the Cash Department Staff were to do and be responsible for all work in companynection with receipts and payments of monies and bad to do ouch other work as was customarily done by cashiers and shroffs of Banks.
K. Daphtary, Solicitor General of India, R. Ganapathy Iyer and D. Gupta, for the respondent.
V. Viswanatha Sastri, S. N. Andley, J. B. Dadachanji, Rameshwar Nath and P. L. Vohra, for the appellants.
50,000 per annum and it owns stocks, shares and Government securities also of companysiderable value.
The nature of the employment of Sheel Chandra has to be gathered from the agreement dated September 19, 1950, between him and the Bank.
The Income tax Appellate Tribunal in upholding this view held that on a proper companystruction of the written agreement between Sheel Chandra and the Bank, the emoluments received by the Treasurer were profits and gains of business and it further held that as the security furnished by Sheel Chandra came out of the joint family proper.
Both questions were answered against the appellant.
Appeal from the judgment and order dated May 12, 1955, of the Punjab High Court in Civil Reference No.
The appointment took effect from April 16, 1950.
April 26.
The Judgment of the Court was delivered by KAPUR, J. This is an appeal against the judgment and order of the High Court of Punjab made on a reference under s. 66 1 of the Indian Income tax Act which was answered in favour of the Commissioner of Income tax.
Whether in the facts and circumstances of the case, Sheel Chandras emoluments as Treasurer of the Central Bank of India Ltd. were rightly assessed in the hands of the Hindu undivided family of which he is the Karta.
ties, the emoluments companyld number be said to have been earned without detriment to the family property and therefore were part of the income of the Hindu undivided family.
Against this judgment and order the appellant has companye in appeal to this Court.
400 a month.
23,286 and the question for decision is whether this sum is the individual income of Sheel Chandra as salary or it is part of the income of the Hindu undivided family.
He had the power to companytrol, dismiss and change this Staff at his pleasure but he companyld number engage or transfer any member of the Staff except with the approval of the Bank and had to dismiss any such member if so required by the Managing Director of the Bank or Agent of the Office.
The appeal relates to the assessment year 1951 52.
CIVIL APPELLATE JURISDICTION Civil Appeal No.123 of 1957.
At the instance of the appellant the Tribunal referred under s. 66 1 the following two questions to the High Court Whether in the facts and circumstances of the case and on a true companystruction of the agreement between the Central Bank of India and Sheel Chandra the salary and other emoluments received by Sheel Chandra as Treasurer of the said Bank are assessable under the head salary or under the head Profits and gains of business.
The Income tax Authorities held this sum to be the latter and taxed it as such.
Their father, Adishwar La, upto his death on April 16, 1950, was the Treasurer of several branches of the Central Bank of India which in the judgment will be referred to as the Bank .
As to the second question the High Court was of the opinion that the emoluments were the income of the Hindu undivided family because Sheel Chandra was number appointed Treasurer on account of any personal qualification but he was appointed because a his father was a Treasurer of the Bank before him and b he had furnished substantial security which was part of the property of the Hindu undivided family.
During his fathers lifetime Sheel Chandra was employed as an Overseer in the Bank on a salary of Rs.
The appellant is the assessee a Hindu undivided family with Sheel Chandra as its Karta and the respondent is the Commissioner of Income tax.
The Hindu undivided family owns companysiderable property.
Both the Appellate Tribunal and the High Court were of the opinion that the emoluments as Treasurer were number acquired without any detriment and risk to the 1 1953 24 I.T.R. 217.
75,000.
As Treasurer he furnished security to the Bank of certain properties of the Hindu undivided family, which companysisted of title deeds of immovable properties in Chandni Chowk, Delhi, and Government of India securities of the value of Rs.
The appellant, a Hindu undivided family, companysisted of Sheel Chandra and his Younger brother.
Sheel Chandra undertook to perform the duties and be responsible as Treasurer of the various branches of the Bank and was required to engage and employ subordinate staff called the Cash Department Staff such as Head Cashiers, Potdars, Guaranteed Peons, Godown Keepers, Assistant Godown Keepers, Chowkidars and Clerks and other persons necessary for the efficient working of the said offices.
Sheel Chandra was appointed Treasurer of the Bank at Delhi and sixteen other branches of the Bank.
17/1953.
On a companysideration of the various clauses of the agreement between Sheel Chandra and the Bank, the High Court held that the relationship between them was number one of master and servant but that of an employer and independent companytractor and therefore the emoluments received by Sheel Chandra as Treasurer were number salary but profits and gains of business.
As Treasurer Sheel Chandra received in the year of account from the Bank a sum of Rs.
Its income from house property alone is Rs.
