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N. Veeriah Reddiar and Bros. Vs. Commissioner of Income-tax, KeralA. - Court Judgment

LegalCrystal Citation
SubjectDirect Taxation
CourtKerala High Court
Decided On
Case NumberIncome-tax Reference No. 38 of 1964
Reported in[1967]64ITR474(Ker)
AppellantN. Veeriah Reddiar and Bros.
RespondentCommissioner of Income-tax, KeralA.
Cases ReferredTax v. Jugal Kishor Baldeo Sahai
Excerpt:
- - 1 and 2 we have heard counsel at length but are not satisfied that the appellate tribunal was wrong in the conclusion it reached......the karta of a joint hindu family is bound by reason of his being the karta to manage the business of the family without being entitled to any remuneration. a hindu undivided family cannot, therefore, in the absence of a special agreement to any remuneration to the karta for managing the business of the family, claim as a deduction amounts paid as remuneration to the karta for managing the joint family business.' (head-note).we are in agreement with the decision. and it follows that these two questions also have to be answered against the assessee.the reference is answered as above, but in the circumstances of the case without any order as to costs. a copy of this judgment under the seal of the high court and the signature of the registrar will be sent to the appellate tribunal as.....
Judgment:

M. S. MENON C.J. - This is a reference by the Income-tax Appellate Tribunal, Madras Bench, under section 66 (2) of the Indian Income-tax Act, 1922. The assessment years concerned are 1958-59 and 1959-60; and the accounting periods, the Malayalam years 1132 and 1133, respectively. The questions referred are :

'(1) Whether, on the facts and in the circumstances of the case, the addition of Rs. 16,066 to the assessees income for 1958-59 assessment is valid in law

(2) Whether, on the facts and in the circumstances of the case, the addition of Rs. 14,589 to the assessees income for 1959-60 assessment is valid in law

(3) Whether, on the facts and circumstances of the case, the assessee is entitled to the deduction of the salary of Rs. 1,800 paid to the karta as an admissible deduction in the computation of the assessees total income for the assessment year 1958-59

(4) Whether, on the facts and circumstances of the case, the assessee is entitled to the deduction of the salary of Rs. 2,700 paid to the karta as an admissible deduction in the computation of the assessees total income for the assessment year 1959-60 ?'

Questions Nos. 1 and 2

We have heard counsel at length but are not satisfied that the Appellate Tribunal was wrong in the conclusion it reached. The reason for the conclusion is the increase in the volume of the retail business which, it is not disputed, will produce a layer volume of profit than the wholesale business of the assessee. The figures given in the order of the Appellate Tribunal are not correct; but that in this case is indicative only of a lack of case, and not a lack of judgment. Even on the basis of the correct figures, to which our attention has been drawn, the increase in the volume of the retail business will justify the addition of Rs. 16,066 in respect of the assessment year 1958-59 and the addition of Rs. 14,589 in respect of the assessment year 1959-60.

The proposition of the retail sales to the total sales, according to the correct figures and as admitted at the bar, was only just over seven per cent. in 1131 M. E. It rose to over thirteen per cent. in 1132 M. E. and to over seventeen per cent. in 1133 M. E.

We are in agreement with the reasoning of the Tribunal and, applying it to the correct figures, answer these two questions in the affirmative and against the assessee.

Questions Nos. 3 and 4

The decision in Commissioner of Income-Tax v. Jugal Kishor Baldeo Sahai is against the contention of the assessee. In that case the Allahabad High Court said :

'Apart from any special agreement the karta of a joint Hindu family is bound by reason of his being the karta to manage the business of the family without being entitled to any remuneration. A Hindu undivided family cannot, therefore, in the absence of a special agreement to any remuneration to the karta for managing the business of the family, claim as a deduction amounts paid as remuneration to the karta for managing the joint family business.' (Head-note).

We are in agreement with the decision. And it follows that these two questions also have to be answered against the assessee.

The reference is answered as above, but in the circumstances of the case without any order as to costs. A copy of this judgment under the seal of the High Court and the signature of the Registrar will be sent to the Appellate Tribunal as required by sub-section (5) of section 66 of the Indian Income-tax Act, 1922.

Questions answered against the assessee.


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