DHANWATAY V D Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) A very short question of law arises for determination upon this reference, and the question is:

(2.) THE assessee is an HUF. Its Karta is on V. D. Dhanwatay. THEre was a business known as Shivaji Fine Art Litho Works which was carried on by a partnership under a deed of partnership dt the 1st April, 1951. V. D. Dhanwatay was one of the partners and it is common ground that in this partnership he represented the HUF consisting of himself and his two minor sons. Clause (16) of the partnership deed provided for the payment of remuneration to V. D. Dhanwatay as well as the other partners at the rates mentioned in that clause. V. D. Dhanwatay was to get Rs. 1,250 per month, which appears subsequently to have been increased to Rs. 1,500 per month in the accounting year, so that the remuneration he received during the accounting year was Rs. 18,000. It was found by the Tribunal that there was not an iota of evidence to show that Dhanwatay rendered any service to the partnership in his individual capacity and the Tribunal held that what was paid to Dhanwatay in the form of remuneration was only for the purpose of adjustment of the rights inter se between the parties. In that view, the Tribunal considered that the remuneration received was received by him on behalf of the HUF and was, therefore, properly included in the income of the HUF.