COMMISSIONER OF INCOME TAX Vs. S N N SANKARALINGA IYER

JUDGEMENT

(1.) THIS reference raises a very plain question, viz., whether in the circumstances and on the facts of this case, the two sums of Rs. 18,991 and Rs. 105 received by the respondent as Managing Directors' remuneration and Director's sitting fees from the Indo Commercial Bank could be said to be a part of the income of the Hindu undivided family of which he was the karta.

(2.) THE assessment was made on the basis that the family of which Mr. Sankaralinga Aiyar was the karta or the manager was an undivided Hindu family. For the assessment year 1943-44 Mr. Sankaralinga Aiyar claimed that the remuneration of Rs. 18,991 which he received as the Managing Director of the Indo Commercial Bank and a sum of Rs. 105 which he received as Director's sitting fees, were his personal earnings and not property belonging to the undivided Hindu family of which he has been the head and the manager. THE only circumstance relied on behalf of the Commissioner of Income-tax to declare these two amounts, family property is that in order to acquire the qualification for managing director Mr. Sankaralinga Aiyar utilised family funds and purchased shares, and as the qualification was acquired by utilising the family funds, it is claimed that his remuneration earned as managing director as director's sitting fees must be treated as joint family property. Articles 87 and 88 of the Articles of Association of the Indo-Commercial Bank lay down the qualification of a managing director and Article 88 requires that :