JUDGMENT
S.C. Mohapatra, J.
1. These are three references made under Section 256(1) of the Income-tax Act, 1961, on the following common question of law :
“Whether, on the facts and circumstances of the case, the Tribunal was right in allowing remuneration of Rs. 9,000 to the karta although there was no specific evidence to the effect that any income earned by the Hindu undivided family other than the share income from the firm necessitated commensurate services which were rendered by the karta ?”
2. All the three assessees are Hindu undivided families. They constitute a partnership firm named as M/s. P. Laxminarayana and Sons. Out of the shares of the joint families in the profits of the firm, Rs. 9,000 was paid to the karta for having looked after the business on behalf of the assessees.
3. Salary given to the karta was not allowed by the Income-tax Officer on the ground that it is the duty of the karta to manage the family affairs being the guardian and, accordingly, he is not entitled to any salary.
4. The fact of payment of salary is not disbelieved. The Tribunal held that there is no bar in law for payment of salary to the karta for managing the business and allowed the claims of the three assessees.
5. Mr. S. C. Ray, the learned Advocate-General and standing counsel, submitted that the karta of a Hindu undivided family is not entitled to extra remuneration. Normally that would be so. However, in the absence of any prohibition in any law, if members of the Hindu undivided family decided to pay some remuneration to the karta who is the manager for having
taken up responsibility of the business, the same cannot be refused. When, on facts, the payment is not disbelieved and there is no unreasonableness found in that regard, we are of the view that, on the facts and in the circumstances of the three cases, the Tribunal was right in allowing remuneration of Rs. 9,000 to the karta although there was no specific evidence to the effect that any income earned by the Hindu undivided family other than the share income from the firm necessitated commensurate services which were rendered by the karta. Accordingly, the question is answered in the affirmative, in favour of the assessees. There shall be no order as to costs.
J.M. Mahapatra, J.
6. I agree.