Hegde, J. - (1.) The question of law arising for decision in these appeals by certificate under S. 66A (2) of the Income Tax Act, 1922 (to be hereinafter referred to as the Act) is: "Whether on the facts and in the circumstances of the case, the managing director's remuneration received by Sri Rajkumar Singh was assessable in his individual hands and not in the hands of the assessee Hindu Undivided Family -
(2.) This question was referred by the Income-tax Appellate Tribunal, Bombay Bench 'A' to the High Court of Judicature at Bombay (of M. P. ) on an application made under S. 66 (1) of the Act by the Commissioner of Income-tax Madhya Pradesh. The High Court has answered that question in favour of the Revenue. As against that decision this appeal has been brought.
(3.) The assessee in this case is a Hindu Undivided Family and the concerned assessment year is 1954-55, the relevant accounting period being the year ending Diwali 1953 i.e. November 6, 1953. Previously a Hindu Undivided Family was carrying on business under the name and style of Sarupchand Hukamchand. That family was carrying on several businesses one of which was the management certain mills. That family disrupted on March 30, 1950. The assessee is the branch of that family. On March 31, 1950, a company under the name and style of Sarupchand Hukumchand Private Ltd. was incorporated. The capital of the company consisted of Rs.5 crores divided into 20,000 preference shares of Rs. 1000 each and 3,000 ordinary shares of Rs. 1000 each. The company itself was incorporated for the purpose of acquisition from M/s. Sarupchand Hukumchand, certain managing agencies, businesses, factories and properties and for that purpose to enter into an agreement with the said firm and to carry on business as managing agents of Rajkumar Mills Ltd., the Hukumchand Mills Ltd. and the Hira Mills Ltd. and the other businesses mentioned more particularly in the Memorandum of Association of the company. The first Directors of the company were: (1) Sir Hukumchand Saroopchandji (2) Rajkumarsingh Hukumchand ji (3) Lady Kanchanbai Hukamchand ji (4) Mrs. Premkumaridevi Rajkumarsinghji (5) Raja Bahadursingh Rajkumarsinghji (6) Rustomji Cowasji Jall.;