RAM JHA Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THESE two references arise out of proceedings for assessment of income-tax of Pt Shri Ram Jha, who was assessed in the status of a Hindu undivided family. Pt. Shri Ram Jha died during the pendency of these references in this Court and is now represented by Dr. Krishna Ram Jha, who succeeded as Karta of the family. The proceedings relate to the two assessment years 1946-47 and 1947-48. The Hindu undivided family included within it the three brothers Pt. Shri Rani Jha, Dr. Krishna Ram Jha and Mr. Hari Ram Jha. Their father had purchased certain shares out of which 100 shares of the Burakar Goal Company of the face value of Rs. 51 each were inherited by these three brothers in the year 1914, on the death of their father. The Hindu undivided family also purchased 100 further shares of the same Company on the 21st September 1921.

(2.) THE second point that arose was that Dr. Krishna Ram Jha had insured his life for a sum of Rs. 10,000, through his brother Mr. Hari Ram Jha, as an insurance agent. Mr. Hari Ram Jha was not carrying on the profession of an insurance agent, but in view of the suggestion that he would be able to earn the commission on the insurance policy of his brother, he took a licence as an insurance agent. THE result was that he received a sum of Rs. 518 from the insurance company during the previous year relating to the assessment year 1947-48. This was, also treated as income of the Hindu undivided family by the Tribunal and included in its assessment. This-is another decision that has been challenged by the assessee in these references.

(3.) THE Tribunal in answering the second question against the assessee rejected the contention that the sum of Rs. 518/-, received as commission by Mr. Hari Ram Jha, was his individual earning, holding that Mr. Hari Ram Jha did not carry on the profession of an insurance agent and the commission was not earned by him by the exercise of any profession, but it was earned by him as a member of the Hindu undivided family, because he happened to be a member of the family and took a licence as an insurance agent to entitle him to the commission on the insurance proposal by his brother Dr. Krishna Ram Jha.