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PETITIONER: K.S.  SUBBIAH P-ILLAI

       Vs.

RESPONDENT: THE COMMISSIONER OF INCOME TAX

DATE OF JUDGMENT:       10/03/1999

BENCH: R.C.Lohati, S.S.M.Quadri, S.P.Bharucha

JUDGMENT:

     BHARUCHA., J.

     In  these  appeals filed by the assessee, which -is  a Hindu Undivided Family, we are concerned with the Assessment Years  1959-60  to  1965-66 and 1969-70  and  1970-71.   The question that we are required to consider reads thus:

     "Whether, on the facts and in the circumstances of the case,  the  remuneration  and  commission  received  by  Sri K.S.Subbiah  Pillai  was  assessable  in the  hands  of  the assessee Hindu Undivided Family?

     It  may  be  mentioned  at the outset  that  the  same assessee  was  assessed in AndhraPradesh for the  Assessment Years 1966-67 to 1968-69.  The same question arose in regard to   those  assessments.   The   question  was  answered  on reference  by the High Court of Andhra Pradesh in favour  of the  assessee  and  the  Revenue did not  carry  the  matter Further.

     The  judgment,  of  the   Andhra  Pradesh  High  Court afore-mentioned  was c"itea before the High Court at  Madras "in  the  reference proceedings out of which  these  appeals arise  but  the Madras High Court dissented  therefrom.   It dilated  at  length  on Hindu Law but, with  great  respect, missed  the point that the Income Tax Appellate Tribunal  is the  final  fact-finding  authority and, as  it  has  itself noticed  in  the judgment under challenge, the Tribunal  had held  that the remuneration and cornmission received by  the Karta  of  the  HUF  were earned by him on  account  of  his personal  qualifications and exertions and not on account of the  investment  of  the family funds in  the  company  and, therefore, could not be treated as the income of the HUF.

     The  High  Court,  having analysed  the  law,  rightly concluded  that the broad principle that emerged was whether the remuneration received by the coparcener was in substance one of the modes of return made to the family because of the investment of the family funds in the business or whether it was   compensation  made  for   services  rendered  by   the individual  coparcener.   If it was the former, it  was  the income  of  the HUF:  but if it was the latter, then it  was the  income  of  the individual coparcener.   Applying  this test,  the High Court held, "There is absolutely no evidence

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to support the contention of the learned counsel for the

     assessee  that the development of the business was due to  any peculiar qualification or experience on the part  of the assessee.  "

     We  cannot agree.  Having analysed the law, as "it did correctly,  the  High  Court should have taken note  of  the finding  recorded by the Tribunal and noticed by it earlier, namely,  that  the  remuneration and  commission  that  were earned by the Karta were earned by him on account of his

     personal  qualifications  and  exertions  and  not  on account  of  the  investment  of   the  family  funds   and, therefore, should

     have held that the -income could not be treated as the Income of the HUP.

     In  the result, the appeals are allowed.  The judgment and  order  under  appeal  1s set aside.   The  question  is answered  in the negative and In favour of the assessee.  No order as to costs.