- (1.) The following question of law arising out of the order of the tribunal was sought to be raised by the Department: "Whether on the facts and in the circumstances of the case, the tribunal was justified in law in holding that the salary could not be assessed in the hands of the HUF. "
(2.) The tribunal rejected the application under Section 256 (1. The Revenue made an application under Section 256 (2 of the Income Tax Act before the High court. The High court also rejected that application. The a Revenue has now come up in appeal.
(3.) The law is well settled by several decisions of this court that if a member of a Hindu Undivided Family (in short "huf") joins a partnership and he is given a salary for managing the firm or rendering special services to the firm, the salary will be his individual income. But if his salary is really a part of the return of the investments made by the HUF in the partnership firm, the salary income would be added to the income of the HUF. Reference can be made to the two decisions of this court in the case of Raj Kumar singh Hukam Chandji v. commissioner OF INCOME TAX and also the case of Prem Nath v. commissioner OF INCOME TAX where this proposition of law was reiterated. As against this, reference was made in the High court to the case of commissioner OF INCOME TAX v. R. M. Chidambaram Pillai. The High court was of the view that this judgment is in conflict with the other judgments of this court and on that basis a certificate for fitness of appeal under Section 261 was granted.;