Judgment

SHAH, J.:- P. N. Krishna Iyer-hereinafter called the assessee-set up in 1923 a motor transport business in the former State of Travancore. In 1945 there arose disputes between the assessee and his brothers about the division of the estate of the joint family of which they were members. The disputes were settled by mutual agreement dated October 23, 1951 and the motor transport business together with the "wrokshop, stores, agency, cinema companies etc." were treat as the business of the joint family, and on partition were allotted to the assessee. An application filed by the assessee before the 1st Additional Income-tax Officer, Trichur, for recording the partition was accepted.

2. In the meantime on July 3, 1952, a private limited company P. S. N. Motors (Private) Ltd. was floated with the object of taking over the motor transport business carried on by the assessee. By the Articles of Association, the assessee was to be the Governing Director of the Company for life and to draw such remuneration and exercise such powers detailed in the agreement to be entered into between him and the company in that behalf, and so long as he held the office of Governing Director, the gener