V. D. DHANWATEY vs THE COMMISSIONER OF INCOME TAX, M.P. NAGPUR(With Connected

The Supreme Court held that the remuneration received by a karta of a Hindu undivided family (HUF) for services rendered as a partner in a firm is not taxable as individual income but rather as income of the HUF. The Court emphasized that the remuneration was directly linked to the investment of joint family funds in the partnership, thus falling under the principle established in The C.I.T., West Bengal v. Kalu Babu Lal Chand. The appeals were dismissed, affirming the High Court's ruling that the remuneration constituted an adjustment of the family's share in profits rather than individual earnings.