Satyanarayana Rao, J.-This reference raises a very plain question, viz., whether in the circumstances and on the facts of this case, the two sums of Rs. 18,991 and Rs. 105 received by the respondent as managing director’s remuneration and director’s sitting-fees from the Indo-Commercial Bank could be said to be a part of the income of the Hindu undivided family of which he was the Karta.

The assessment was made on the basis that the family of which Mr. Sankaralinga Ayyar was the Karta or the Manager was an undivided Hindu family. For the assessment year 1943-44 Mr. Sankaralinga Ayyar claimed that the remuneration of Rs. 18,991 which he received as the managing director of the Indo-Commercial Bank and a sum of Rs. 105 which he received as director’s sitting-fees, were his personal earnings and not property belonging to the undivided Hindu family of which he has been the head and the manager. The only circumstance relied on behalf of the Commissioner of Income-tax to declare these two amounts family property, is that in order to acquire the qualification for managing director, Mr. Mr. Sankaralinga Ayyar utilised family funds and purchased shares, and as the qualification was acquired by utilising the family funds, it is claimed that his remuneration earned as managing-director and director’s sitting-fees must be treated as joint family property. Articles 87 and 88 of the Articles of Association of the Indo-Commercial Bank lay down the qualification of a managing director and Article 88 requires that

“no director shall be eligible to be a managing director unless at the time of his appointment as such and also during his continuance of that office, he holds, in his own right, unencumbered shares of the Bank of the nominal value of one-eighth of the total issued capital for the time being”.

This article was subsequently amended by substituting “1,500 unencumbered A series shares of the Bank”for“one-eight of the total issued capital for the time being”. The Appellate Tribunal decided in favour of the assessee and treated the two items as the individual property of Mr. Sankaralinga Aiyar. This position is contested on behalf of the Commissioner of Income-tax by his learned counsel.

The remuneration of the managing director is earned by him in consideration of the services which he rendered to the Bank. No part of the family funds were spent or utilised for acquiring this remuneration, except that the necessary shares to acquire the qualification of managing director were purchased out of the joint family funds. There is no detriment to the family property’in any manner or to any extent as admittedly the shares earn dividend which is included in the income of the family. Under Hindu Law, the remuneration of the managing director whose employment is in the nature of a contract of service would ordinarily be his self-acquisition and unless the earnings are thrown into the common stock or, in other words, blended with the family property, they would not become family property. The mere fact that the income is entered it in the family accounts or is mixed in the bank account would not make it family property as that by itself would not constitute blending under Hindu Law, as it requires the throwing of the income into the common stock with the intention of abandoning the ownership and vesting it in the family. It is therefore difficult to see on what basis the claim that the remuneration and the sitting-fees constitute joint family property can be sustained. No doubt the shares were purchased out of the joint family funds and were shown as held by him in his own right. It is impossible to infer from that, that the appointment itself was on behalf of and for the benefit of the joint family; or, in other words, that he was managing director as representing the undivided family. It is argued by the learned counsel for the Commissioner of Income-tax that there may be an agreement, or from the facts and circumstances an inference may be drawn, un

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