SATYANARAYANA RAO, J.

The question that was referred to us for our decision is :

"Whether on the facts and in the circumstances of the case, the inclusion of a sum of Rs. 2,46,407 for the assessment year 1944-45 and Rs. 1,03,985 for the assessment year 1945-46, representing remuneration derived by the managing agency of the Davangere Cotton Mills, Ltd., Davangere, in the total income of the assessee family is lawful." *

The assessee is a Hindu undivided family. The only question that arises for consideration in this reference is, whether the income derived by Hanumanthappa and his son under the managing agency agreement with the Davangere Cotton Mills Company, entered into on 15th March, 1937, should be included in the total income of the assessee under Section 16 of the Act. Being an income which accrued in the Native State, it is exempt under Section 14 of the Act from tax, but it could be taken into consideration under Section 16 of the Act in computing the total income of the assessee for the purpose of determining the rate. It is from that point of view that the question becomes relevant

The joint family was carrying on business in British India under the name and style of R. Hanumanthappa and Son. At the time of the managing agency agreement, the two members Hanumanthappa and Rama Setty constituted themselves into a firm and entered into the managing agency agreement. Rama Setty has a minor son and we do not know the exact date of his birth and therefore we are unable to state whether this boy was in existence on the date on which the managing agency agreement was entered into. Under the Indian Companies Act, as interpreted by this Court in Murugappa Chetty and Sons v. Commissioner of Income-tax, a joint family as such cannot enter into a managing agency agreement in view of the definition of "managing agent" in Section 2, clause 9(a), of the Indian Companies Act. In the Mysore State, the Mysore Companies Act (Act XVIII of 1938) contains also similar provisions as the Indian Companies Act with reference to managing agency and the definition is also identical. Though at the moment this agreement was entered into by the firm of Hanumanthappa and Son with the limited company, Davangere Cotton Mills, there was no prohibition, as the Mysore Act came into force only in 1938, still, on the language of the document, it is clear that the other party of the document was the firm and not the individuals Hanumanthappa and Rama Setty. Even if they have entered into in their individual capacity, the joint family as such would not acquire any interest in the commission earned by the individuals, because they were not purporting to act on behalf of and for the benefit of the joint family. The fact therefore that the disability which, under the law as it now exists, viz., that a joint family as such could not enter into a managing agency agreement, did not exist when this agreement was entered into in Mysore State would not help the revenue authorities to enable them to include this income in the total income of the assessee. On 20th March, 1940, the deed of partnership was executed between the two, Hanumanthappa and Rama Setty, whereunder it was stated that even on 15th March, 1937, when the managing agency agreement was entered into with the company, it was decided that the two individuals should constitute themselves into a partnership under the name and style of R. Hanumanthappa and Son with effect from 20th November, 1936. This undoubtedly establishes that there was a partnership which was in existence even in 1937, partnership between Hanumanthappa and his son, and it was that partnership that in fact entered into an agreement with the company. The deed of partnership is also important as it contains a provision that the two partners should have the liberty to draw separately and utilise their respective shares in the income of the company, that is, the managing agency commission, and it will be open to them to credit to