BIPINBHAI VADILAL Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THE assessment years with which we are concerned in this group of references are 1964 -65 to 1971 -72. The bone of contention between the assessee and the revenue centres round two issues, viz., (i) the managing directors remuneration, and/or (ii) sitting fees of the directors of the company known as M/s. C. Doctor & Co. Pvt. Ltd.

(2.) THE assessee, Bipinbhai Vadilal (hereinafter known as 'the assessee'), who is the applicant of Income -tax References Nos. 357/77, 178/77, 218/78 and respondent in Income -tax Reference No. 186/76 claims that the income of the managing directors remuneration and the directors fees is not liable to be included in his assessment as an individual, and, in effect and substance, is the income of his Hindu undivided family (hereinafter called 'the HUF') assessed as Bipinbhai Vadilal HUF, which is the applicant in Income -tax References Nos. 158/76 and 11/75 and respondent in Income -tax References Nos. 161/78. Since the claims and the contentions are identical, arising out of the same facts and between the same parties, we intend to dispose of these references by this common judgment.

(3.) IN the course of assessment proceedings for assessment year 1964 -65, the assessee contended that having regard to the transactions as aforesaid, the remuneration received by him as a director -in -charge was required to be treated as income of the HUF and the same should be excluded while computing his total income in his total personal income in his status as individual. He relied in support of this claim on his declaration of March 27, 1964, the letter of even date addressed in pursuance thereof to M/s. C. Doctor & Co. Pvt. Ltd., and the relevant entries made in the books of account of the company as well as those of the HUF and of himself.