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Jugal Kishore Baldeo Sarai vs Commissioner Of Income-Tax, U.P., ... on 20 September, 1966 cites

Jitmal Bhuramal vs Commissioner Of Income-Tax, Bihar And ... on 2 February, 1962

in the plural that learned counsel urged that the remuneration given to Babu Ram was not merely for looking after the Hindu undivided family business, but also for rendering services to the partnership firms in which Babu Ram was a partner. We do not consider that this interpre- tation of the agreement is correct. The agreement does not envisage any payment to Babu Ram for services rendered to the partnership firms. The language used was that Babu Ram should receive the remuneration for managing all the businesses of the Hindu undivided family, which can only mean that he was to manage the affairs of the Hindu undivided family firm and also to look after the interests of the Hindu undivided family in other businesses. Thus, the remuneration was not intended to cover any services rendered by him to the partnership firms apart from whatever he was required to do in the capacity of looking after and managing the affairs of the Hindu undivided family. The principle laid down in the case of Jitmal Bhuramal v. Commissioner of Income-tax, Bihar and Orissa (1) is, therefore, not applicable to the case before us. The appeals are consequently allowed. The judgment of the High Court is set aside and the question referred by the Income-tax Appellate Tribunal is answered in the affirmative. The appellant will be entitled to its costs in this Court as well as in the High Court.
Supreme Court of India Cites 6 - Cited by 25 - Full Document

Ranganatha Ayyangar vs R. Rajagopala Ayyangar And Ors. on 21 August, 1931

The decision of the Madras High Court and the views expressed by these commentators do not show that a Karta of a Hindu undivided family is not entitled to charge for services rendered to the family business under any circumstances at all. The right to receive remuneration is negatived with some qualifications. Either- it is stated that no remuneration is payable except under special arrangement, or a scope for payment is recognised by saying that the manager or karta is not "ordinarily" entitled to remuneration. The Madras High Court in the case of Krishnaswami Ayyangar v. Rajagopala Ayyangar(1) held that "the managing coparcener was not entitled to special remuneration in the absence of a valid special agreement". We are unable to understand the meaning of the expression "valid special agreement". It is, of course, necessary that before a karta receives remuneration, it should be under a valid agreement. In judging what is a valid or proper agreement which would justify the payment of remuneration paid to a karta of the Hindu undivided family for managing the business of the family to be deductible as an expenditure under s. 10 (2) (xv) of the Income-tax Act, the test, we think, which should be applied, is whether the agreement has been made by or on behalf of all the members of the Hindu undivided family and whether it was in the interest of the business of the family, so that it could be justified on grounds of commercial expediency. That is the test which has always to be applied when considering whether a particular (1) I.L.R. 18 Mad. 73 419 expenditure claimed as a deduction under s. 10 (2) (xv) of the Income-tax Act has been incurred wholly and exclusively for the purpose of the business.
Madras High Court Cites 16 - Cited by 7 - Full Document

Commissioner Of Income-Tax, Bihar And ... vs Jainarain Jagannath. on 15 August, 1945

In this connection, we may take notice of a decision in the Patna case, Commissioner of Income-tax, Bihar and Orissa v. Jainarain Jagannath,(1) wherein also it was held that "a member of a joint Hindu family might conceivably do business in his individual capacity and in that capacity might render services to the joint family trading firm in consideration of which the firm might pay him such remuneration as it would pay to an outsider. If such remuneration is not excessive and is reasonable and is not a device to escape income-tax, then it will be a legitimate deduction in computing the, profits of the business. If, on the other hand, the amount paid is unreasonably high and disproportionate to the services rendered by him, then it may be treated as part of the profits of the firm distributed in a particular manner. In the present case, there is no indication of any finding that.the payment to Babu Ram was at all high, or was not commensurate with the services rendered by him.
Patna High Court Cites 5 - Cited by 11 - Full Document
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