Judgement

RAMASWAMI, J. :- This appeal is brought, by certificate, from the judgment of the Madras High Court in T. C. No. 151 of 1962 dated October 17, 1963.

2. The appellant (hereinafter referred to as the assessee ) is a Hindu Undivided Family consisting of the father and four major sons. The assessee became a shareholder in the Trichy-Sri Rangam Transport Company Ltd. (hereinafter referred to as the company ) in 1934 and owned 90 shares out of the 300 shares of the company. The shares were acquired with the funds of the Hindu undivided family of the father and his four major sons. There were initially four shareholders including the assessee, two of whom were directors. On the death of one of the Directors, the assessee became a director in 1941 and on the death of another director who was managing the business the assessee became the Managing Director with effect from 1942. By a resolution dated April 16, 1944 the company granted him an honorarium of Rs. 3,000 for the year 1943 44 and subsequently raised it gradually till it became Rs. 1,000 per month with 121/2 per cent commission on the net profits of the company. The Managing Director had control over the financial and admi