Law:

Section:

Section 4 of the Income-tax Act, 1961 [Corresponding to section 3 of the Indian Income-tax Act, 1922] - Hindu undivided family - Assessable as - Two brothers 'M' and 'C', who were members of joint Hindu family, entered into a partnership and were appointed as managing agents of 'D' mill under an agreement - After death of 'C' fresh managing agency agreement was entered into between 'D' mill and 'M' and four sons of 'C' - Revenue authorities claimed that income earned by each of four sons of 'C' under managing agency agreement was joint family income and not their individual income - Whether since in terms of managing agency agreement there was no obligation on part of managing agents either to advance money or keep any of assets in hands of mills as a condition precedent for exercising their rights under agreement or for continuance of agreement, there was no legal basis for coming to conclusion that income earned by four sons of 'C' under managing agency agreement was joint family property and not their individual income - Held, yes FACTS Two brothers of 'M' and 'C', who were members of joint Hindu family, entered into a partnership and were appointed as managing agents of a 'D' mill under an agreement, 'C' died in 1945. Thereafter there was a fresh agreement of managing agency between 'D' mills and 'M' and the four sons of 'C'. The revenue authorities claimed that the income earned by each of the four sons of 'C' under the managing agency agreement was the joint family property and was not their individual income. On reference: HELD In the terms of the managing agency agreement of 1945, there was no obligation on the part of the managing agents either to advance money or keep any of the assets in the hands of the mills as a condition precedent for exercising their rights under the agreement or for continuance of the agreement. In these circumstances, there was no legal basis for coming to the conclusion that the income earned by the four sons of 'C' under the managing agency agreement was joint family property and not their individual income. Note: Decision was in favour of assessee. CASE REVIEW M.N. Murugappa Chetty and Sons v. CIT [1952] 21 I.T.R. 311 -…

Deprecated: trim(): Passing null to parameter #1 ($string) of type string is deprecated in /home/digixyei/sldsystempk.com/view/master-layout/view_case.php on line 492