| Case ID |
008d02c9-f215-454b-a3c5-acaf6bc35886 |
| Body |
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| Case Number |
IT REFERENCE No. 369 OF 1963 |
| Decision Date |
Feb 23, 1967 |
| Hearing Date |
|
| Decision |
The court held that the amount of Rs. 6,000 received by Nagar Das was not to be treated as personal income but rather as part of the profits belonging to the Hindu Undivided Family (HUF). The court found that the remuneration paid to Nagar Das and the second partner, Shyam Sunder, was the same despite their differing levels of experience. The partnership deed indicated that the remuneration was variable and did not directly correlate to personal services rendered. The court concluded that the sum belonged entirely to the HUF and no part was to be treated as personal income of Nagar Das, thereby ruling in favor of the revenue. |
| Summary |
In the landmark case of Nagar Das v. Commissioner of Income Tax, the Allahabad High Court deliberated on whether the remuneration received by Nagar Das, a partner representing his Hindu Undivided Family, should be classified as personal income or as part of the HUF's income. The court emphasized that the term 'remuneration' in the partnership deed was indicative of profits rather than salary for personal services. The case highlighted crucial aspects of partnership agreements, the definitions of remuneration versus salary, and the implications of representing an HUF in business. The judgment reinforced that payments made in a partnership context do not automatically translate into personal income for individual partners, particularly when the partnership structure and remuneration terms suggest otherwise. This case is significant for understanding income classification in partnership structures, especially in relation to family-run businesses and the taxation implications therein. |
| Court |
Allahabad High Court
|
| Entities Involved |
Not available
|
| Judges |
JAGDISH SAHAI,
M.H. BEG
|
| Lawyers |
Ashok Gupta,
R.N. Maru,
B.L. Gupta,
R.L. Gulati
|
| Petitioners |
Nagar Das
|
| Respondents |
Commissioner of Income Tax
|
| Citations |
1967 SLD 533 = (1967) 66 ITR 203
|
| Other Citations |
Jugal Kishore Baldeo Sahai v. CIT [1967] 63 ITR 238 (SC),
Mathura Prasad v. CIT [1966] 60 ITR 428 (SC),
Piyare Lal Adishwar Lal v. CIT [1960] 40 ITR 17 (SC)
|
| Laws Involved |
Income-tax Act, 1961
|
| Sections |
67
|