Law: Income Tax Act, 1922

Section: 66

JUDGMENT Tambe, J.-On requisition made by this court under sub-section (2) of section 66 of the Indian Income-tax Act (hereinafter referred to as the Act), the Income-tax Appellate Tribunal, Bombay, has submitted a statement of the case and referred to this court the following question of law arising out of its appellate order : "Whether on the facts and circumstances of the case the payment of Rs. 7,500 (Rupees seven thousand five hundred) paid to Shri M.D. Dhanwatay for rendering services to the firm, could be included in the total income of the assessee family ?" The assessee before us is a Hindu undivided family of which Shri M.D. Dhanwatay (hereinafter referred to as Marotirao), is a karta. The assessment year is 1954-55, the relevant accounting period being the year ended September 30, 1953. The facts in brief are : Marotirao was a partner in the partnership concern which carried on business under the name and style of Messrs. Shivraj Fine Art Litho Works. The share capital contributed by Marotirao was entirely contributed by the Hindu undivided family (hereinafter referred to as the assessee) of which he was a karta. The rights of the partners inter se were at the relevant time governed by the partnership agreement which according to the statement of the case is annexure "A" to the statement. However, it appears that annexure "A" which has been incorporated in the statement of the case is not a deed of partnership but a deed amending certain clauses of the deed of partnership wherein the remuneration paid to each partner has been altered. The deed of partnership dated April 1, 1951, which governed the rights of the partners has been filed on record by Mr. Joshi, counsel for the department. Mr. Bobde admits it to be a true copy of the deed of partnership and it has been agreed between the parties that it should be accepted on record as part of the statement of the case. We direct so. The business done by the partnership is of lithography and art printing and is carried on by means of a press under the name and style of the Shivraj Fine Art Litho Works. It is a partnership for a period of 10 years. The total capital is Rs. 10,50,000. It may be stated that…

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