RAMESHWAR PRASAD BAGLA Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THIS is a case stated under Section 66(1) of the Income-tax Act 1922 (hereinafter referred to as the Act). The question referred is:

(2.) THE relevant assessment year is 1953-54, the previous year being Sambat year ending Asauj Sudi 9, 2009, corresponding to September-October 1952 of the English calendar. THE assessment for the relevant assessment year was made on Sri Rameshwar Prasad Bagla in the status of a Hindu Undivided family including the share of profit from the firm of Gajadhar Prasad Barjnath. THE latter firm was a firm of the three Bagla brothers. Each of the three Bagla brothers was representing his smaller Hindu undivided family, they being respective Kartas of their families. THE said firm was registered. THE firm of the three brothers acquired a controlling interest in a public limited Company known as Indian Textile Syndicate Ltd. THE dividend income therefrom was divided between the three Bagla brothers, and, ultimately, their shares were credited to their respective families and assessed in the hands of each of these in the status of a Hindu undivided family. Sri Rameshwar Prasad Bagla was appointed the Managing Director of the said Company. A remuneration of Rs. 21,600 was received by him as a Director It was claimed that the sum was the personal income of Rameshwar Prasad Bagla and therefore should be excluded from the assessment of the Hindu undivided family. THE Income-tax officer for the reasons given by him in the assessment order for the immediately preceding assessment year 1952-1953, included in the said sum in the assessment of the assessee Hindu undivided family. THE assessee had claimed, vide, his letter dated 18-8-1952, sent along with the return, that the Managing Director's allowance was the personal income of Sri Rameshwar Prasad Bagla, and, therefore, it had not been returned in the return of the assessee family. THE Income-tax officer held that as Rameshwar Prasad was appointed as Managing Director not because of any personal qualification but because the majority of the shares and the controlling interest in Messrs. Indian Textile Syndicate Ltd. was held by M/s. Gangadhar Baijnath whereof the assessee family was a partner, the Managing Director's allowance was therefore the income of the assessee family and not that of Sri R. P. Bagla in his individual capacity.

(3.) BEFORE us also the main attempt of Mr. Mehrotra has been to distinguish the Supreme Court decision in Kalu Babulal Chand's case (1959) 37 ITR 123= (AIR 1959 SC 1289). The facts of two cases can ever be the same as pointed out by the Supreme Court in Abdul Kayoom v. Commr. of Income-tax, (1962) 44 ITR 689=(AIR 1962 SC 680) "similarly is not enough because even a single significant detail may alter the entire aspect". Further, in deciding such cases we should avoid the temptation to decide the case as said by Cordoza in the Nature of Judicial Process by matching the colour of one case against the colour of another. Nevertheless, what is important when considering a Supreme Court decision which is binding under the Constitution as the law of the land is the ratio decidendi thereof and whether that is applicable to the facts of the particular case. If the ratio applies then it will not be right for any Court to draw fine distinctions between the case in hand and the facts of the Supreme Court case. Even an obiter of the Supreme Court has to be given the utmost weight.