Judgment Uday Sinha, J. 1. These are two references under Sec.256(1) of the Income-tax Act, 1961. They relate to the assessment years 1964-65 and 1965-66. The questions referred to us for our opinion are the following : "Assessment year 1965-66 : (1) Whether, on the facts and in the circumstances of this case, the Tribunal were correct in law in excluding the share income received from the trust, M/s. Gopal Narain Singh and others, from the total income of the Hindu undivided family? (2) Whether, on the facts and in the circumstances of this case, the Tribunal were correct in law in excluding the directors remuneration from the total income of the Hindu undivided family ? Assessment year 1964-65 : Whether, on the facts and in the circumstances of this case, the Tribunal were correcl in law in excluding the share income received from the trust, M/s. Gopal Narain Singh and others, from the total income of the Hindu undivided family ? " 2. Question No. (1) in relation to the assessment year 1965-66 is the same as the question for the assessment year 1964-65. In the order of reference, the question relating to exclusion of directors remuneration from the total income has been mentioned only in relation to the assessment year 1965-66. The annexures to the statement of facts show that it arises in the assessment year 1964-65 as well, but it has not been referred to us in relation to that assessment year. In the petition filed by the Revenue under Sec.256(1) of the Income-tax Act (hereinafter to be referred to as "the Act"), there is a challenge to the exclusion of the directors remuneration in relation to the assessment year 1964-65 as well, but the only question suggested by the Revenue is the one relating to the exclusion of share income. No question relating to the directors remuneration is mentioned in that petition. Be that as it may, in the view that I have taken, it is not very relevant whether that question has been referred to us in relation to the assessment year 1964-65 or not. 3. In relation to the exclusion of share income received from M/s. Gopal Narain Singh, the stand of the Revenue is that it was assessable in the estate of M/s. Gopal Narain Singh, Hindu undivided family. 3. In relation to the exclusion of share income received from M/s. Gopal Narain Singh, the stand of the Revenue is that it was assessable in the estate of M/s. Gopal Narain Singh, Hindu undivided family. The stand of the assessee is that it is the individual income of the assessee and is liable to be assessed as such. In order to appreciate the controversy, a short genealogy would be useful. Genealogy Jalim Singh | ________________|___________________ | | Ram Bilas Singh Ram Charitar Singh | Nageshwar Prasad Singh Anokhi Devi (wife) | _________________|_______________________________________________________ | | | | | Gopal Krishna Govind Shyam Girdhar Narain Narain Narain Narain Narain Singh Singh Singh Singh Singh (Born in (Born in (Born in (Born in 1947) 1954) 1957) 1959) 4 Ram Bilas Singh and Ram Charitar Singh were sons of Jalim Singh, mentioned above, constituting a joint family. In 1942, a partition suit was filed. The parties to the suit were Ram Charitar Singh on the one hand and Ram Bilas Singh, his son, Nageshwar Prasad Singh, and the latters son, Gopal Narain Singh, on the other hand. By arbitration, an award was made. The suit was decreed on a compromise in terms of the award. A final decree was passed on July 21, 1943. In terms of the final decree, considerable movable and immovable properties were allotted to Ram Bilas Singh, his son, Nageshwar Prasad Singh, and grandson, Gopal Narain Singh (the assessee). Ram Bilas Singh died on August 30, 1956. Ten days before his death, he executed a will whereby he bequeathed all his personal assets, movable and immovable, to his grandson, Gopal Narain Singh, and his two minor brothers, Govind Narain Singh and Krishna Narain Singh. At that time, Girdhar Narain Singh and Shyam Narain Singh, the two sons of Nageshwar Prasad Singh, had not been born. The will was probated on December 20, 1958. Under the will, all the properties of Ram Bilas Singh were left to the benefit of Gopal Narain Singh and his two brothers, Krishna Narain Singh and Govind Narain Singh. In terms of the will, the three beneficiaries were assessed individually in respect of the income from the bequeathed properties. Under the will, no interest was created in favour of Nageshwar Prasad Singh, father of the assessee. In terms of the will, the three beneficiaries were assessed individually in respect of the income from the bequeathed properties. Under the will, no interest was created in favour of Nageshwar Prasad Singh, father of the assessee. It is not known whether Nageshwar Prasad Singh, father of the assessee, was possessed of any property or not since no interest had been created in him by the will of Ram Bilas Singh. Be that as it may, the statement of facts shows that Nageshwar Prasad Singh executed a deed of gift in favour of Krishna Narain Singh, by which he transferred some properties in his possession out of the properties received by him from the ancestral nucleus. 5. In terms of the last will of Ram Bilas Singh, the entire estate of the testator had been bequeathed to the three grandsons, namely, Gopal Narain Singh, the assessee, Govind Narain Singh and Krishna Narain Singh. Two grandsons, namely, Shyam Narain Singh and Girdhar Narain Singh, born subsequently had thus no interest in the joint family property of Ram Bilas Singh. In 1961, Anokhi Devi, wife of Nageshwar Prasad Singh, instituted a suit as guardian of the two newly born sons, Shyam Narain Singh and Girdhar Narain Singh. In the suit, the partition decree of 1943 was severely assailed. The plaintiffs asserted in the suit that the assets of the branches of Ram Bilas Singh had always remained joint and the members have always been the members of the joint Hindu Mitakshara family. It was also asserted by the plaintiffs that although by the final decree of July 21, 1943, considerable movable and immovable properties were allotted to the branch of Ram Bilas Singh, the said properties, in fact and in law, belonged to the members of the joint family of the branch of Ram Bilas Singh and so the decree showing the allotment in the names of Ram Bilas Singh, Nageshwar Prasad Singh and Gopal Narain Singh, was beyond the scope of the suit and ultra vires. It was contended that the property so allotted were the joint family properties of the plaintiffs. It was contended that the property so allotted were the joint family properties of the plaintiffs. The plaintiffs also asserted that the properties acquired in the name of different persons, subsequent to the said partition, were the same joint family nucleus and with the aid of the joint family properties received in the said partition and so those subsequently acquired properties and the business were also joint family properties of the plaintiffs and the defendants. In short, the stand was that the entire properties allotted to Ram Bilas Singh, Nageshwar Prasad Singh and Gopal Narain Singh were, at all times, joint family properties and constituted one Hindu undivided family. The suit was decreed in terms of an award. In terms thereof, the 1st Additional Subordinate Judge, Gaya, passed a final decree on August 24, 1963. In this decree, it was specifically mentioned that even before the passing of the final decree, the trust properties were always treated as Hindu undivided family properties and the income was in the nature of Hindu undivided family properties. The decree of 1943 allotting separate shares and properties to Ram Bilas Singh, Nageshwar Prasad Singh and Gopal Narain Singh was completely set at naught. It would not be wrong to say that apart from bringing about a partition between Ram Charitar Singh and Ram Bilas Singh, the decree became non est so far as Nageshwar Prasad Singh and Gopal Narain Singh were concerned. 6. In terms of the decree, the entire properties became joint family properties. The income, therefore, became the income of the Hindu undivided family. In terms of the final decree, all the five brothers of the assessee were allotted separate shares. The decree made it absolutely clear that the properties and the income were in the nature of Hindu undivided family properties. On this basis, the share of profits from the trust, M/s. Gopal Narain Singh and others, amounting to Rs. 42,214 for the assessment year 1964-65 and the directors remuneration amounting to Rs. 23,072 for the assessment year 1965-66 were assessed in the hands of Gopal Narain Singh in the status of a Hindu undivided family, as the nucleus of the income were the Hindu undivided family properties. 42,214 for the assessment year 1964-65 and the directors remuneration amounting to Rs. 23,072 for the assessment year 1965-66 were assessed in the hands of Gopal Narain Singh in the status of a Hindu undivided family, as the nucleus of the income were the Hindu undivided family properties. The directors remuneration of Gopal Narain Singh in respect of M/s. Singh and Chanchani (P.) Ltd. and Hind Strip Mining Corporation Ltd. were also assessed as income of the Hindu undivided family as the shares of those companies had been acquired out of the funds of the Hindu undivided family properties. The assessee, being aggrieved by the order of the Income-tax Officer, appealed to the Appellate Assistant Commissioner who accepted the contention of the assessee that the share income from the properties belonged to the assessee in his individual capacity. He did so on the basis of the earlier order of the Tribunal in respect of the assessment years 1960-61, 1961-62, 1962-63 and 1963-64. In regard to the directors remuneration, the Appellate Assistant Commissioner held that those were received on account of the individual skill and acumen displayed in the management of the two companies, namely, M/s. Singh and Chanchani (P.) Ltd. and Hind Strip Mining Corporation Ltd. The order of the Appellate Assistant Commissioner was affirmed by the Tribunal in the appeal filed by the Revenue. 7. The Revenue, being aggrieved by the orders of the Appellate Assistant Commissioner and the Tribunal, claimed reference to this court. Hence, the present references before us and the questions which have fallen for our consideration. 8. The questions in short are whether the share income, i.e., dividends received from M/s. Gopal Narain Singh and the directors remuneration of the assessee, was his individual income or whether it should have been assessed as income of the Hindu undivided family. In regard to the share income, the Tribunal has proceeded upon the footing that M/s. Gopal Narain Singh was a trust. That seems to be a serious misconception on its part and that seems to be the root cause of the entire misdirection. It is true that Ram Bilas Singh, the karta of the whole estate created a will in favour of three of his grandsons, but no trust was created. That seems to be a serious misconception on its part and that seems to be the root cause of the entire misdirection. It is true that Ram Bilas Singh, the karta of the whole estate created a will in favour of three of his grandsons, but no trust was created. It should be a matter of serious consideration, if Ram Bilas Singh could create any estate divesting Nageshwar Prasad Singh of any interest in the Hindu undivided family properties. Be that as it may, there were three beneficiaries under the will, but no trust was created. Two of the beneficiaries were minors and the assessee, the third beneficiary, was a major. Further, the entire arrangement under the will was set at naught by the decree passed in 1963. The statement of facts makes it absolutely clear that the award which was the basis of the decree stated that all properties and income thereof were Hindu undivided family properties. In that view of the matter, the share income of M/s. Gopal Narain Singh was nothing but the income of the entire family, i.e., of the Hindu undivided family. The assessee may have been looking after the properties, but the income obviously was of the Hindu undivided family and not the individual income of the assessee. The effect of the decree of the civil court passed in 1963 should not be minimised. If that is borne in mind, the will and the probate have no significance. They must be held to be non est. If those aspects are borne in mind, the answer to the question obviously would be that the share income would be the income of the Hindu undivided family and not the individual income of the assessee. The Income-tax Officer was, therefore, fully justified in treating the share income received from M/s. Gopal Narain Singh as the total income of the Hindu undivided family. 9. The Income-tax Officer was, therefore, fully justified in treating the share income received from M/s. Gopal Narain Singh as the total income of the Hindu undivided family. 9. The Tribunal noticed that in the decree of 1963, although there was a clear declaration by all the parties that all the properties were Hindu undivided family properties, yet the Tribunal accepted the stand of the assessee that his share income was individual property from the fact that the Income-tax Officer had assessed the income up to August 28, 1963, in the status of the trust and that shows that the Income-tax Officer believed that the trust property was not Hindu undivided family property till August 23, 1963. The Tribunal observed that the Income-tax Officer would not have assessed the income of the assessee for the assessment year 1964-65 and that the decree did not direct the three earlier beneficiaries to repay the amount to the other co-sharers. In my view, this is where the Tribunal committed a serious error. The fact that Gopal Narain Singh, Krishna Narain Singh and Govind Narain Singh were not made to disgorge some of the income for payment to Shyam Narain Singh and Girdhar Narain Singh is not the crux of the matter. The real matter to be considered is that there was an unequivocal declaration by all the co-sharers that all the properties were joint and the entire income was Hindu undivided family income. 10. The Appellate Assistant Commissioner had held the share income to be the individual income on the basis of the order passed in the assessment years 1960-61 and onwards. The situation therein was different. The assessment for 1960-61 was made on August 7, 1964. The decree of the partition suit of 1963 does not appear to have been brought to the notice of the Income-tax Officer, There could, therefore, be justification for treating the bequeathed properties under the will as individual -properties. But, now we know that there was a partition which made the probate non est. The allotment of shares and properties under the will also became non est. In that view of the matter, I have not the least doubt that the share income had to be treated as income of the Hindu undivided family. It could not have been excluded from the income of the Hindu undivided family. 11. The allotment of shares and properties under the will also became non est. In that view of the matter, I have not the least doubt that the share income had to be treated as income of the Hindu undivided family. It could not have been excluded from the income of the Hindu undivided family. 11. The next question is whether the income of the assessee as directors remuneration was to be assessed as individual income or as income of the Hindu undivided family. The law in this behalf was laid down by the Supreme Court in Raj Kumar Singh Hukam Chandji V/s. CIT [1970] 78 ITR 33, where Hegde J. held that in determining whether the remuneration received by any individual is the income of the individual to whom it is purported to have been given or that of the Hindu undivided family of which he is a coparcener, the test is whether the remuneration received by the coparcener in substance though not in form was but one of the modes of return made to the family because of the investment of the family funds in the business or whether it was a compensation made for the services rendered by the individual coparcener. If it be the former, it must be the income of the Hindu undivided family but if it be the latter, it would be the income of the individual coparcener. In that case, their Lordships found that the managing directors had been appointed by resolution of the board of directors of the company and they were subject to removal at any time. Further, there was no material to show that they had been appointed as managing directors on behalf of the family or as a result of any outlay or expenditure of, or detriment to, the family property, or that their appointment was linked with the acquisition of the business or floatation of the company. Let us see how the facts stand in this case. 12. The Income-tax Officer has observed in his order (annexure 1 to the statement of the case) that the assessee became a director of the company by dint of his having shares in those companies and those shares actually belonged to him in the status of the Hindu undivided family. In paragraph 7, the Appellate Assistant Commissioner observed as follows : "7. In paragraph 7, the Appellate Assistant Commissioner observed as follows : "7. Although the funds belonged to the Hindu undivided family with which the shares were acquired in M/s. Hind Strip Mining Corporation Ltd. and M/s. Singh and Chanchani (P.) Ltd., the directors remuneration paid to Gopal Narain Singh is for his individual skill and acumen brought into play in the management of these two companies. Hence, the directors remuneration of Rs. 23,072 would belong to Gopal Narain Singh." 13. The finding of facts thus is that Gopal Narain Singh, the assessee, had been paid directors remuneration on account of his individual skill and acumen brought into play and paid by the management of M/s. Hind Strip Mining Corporation Ltd, and M/s. Singh and Chanchani (P.) Ltd. This question was considered by the Tribunal in paragraph 13 of its order, but it shows that for the assessment for the years 1958-59 to 1963-64, the assessee was claiming that the directors remuneration should be assessed in the hands of the Hindu undivided family. But the stand of the Revenue was that it had to be assessed as the individual income of the assessee. The assessee conceded before the Tribunal that the amount of directors remuneration would be the personal income of the assessee. When the assessee accepted the stand of the Revenue, the Revenue once again has taken a somersault and has claimed that the directors remuneration paid to the assessee must be treated as income of the Hindu undivided family. Every assessee must know where he stands. The Revenue must make up its mind. Be that as it may, since there is no res judicata in taxation proceedings, it is open to the parties to change their stance. The Tribunal noted in paragraph 14 of its order that there was nothing to show that the assessee had been appointed director because of his holding shares which were the properties of the Hindu undivided family or on account of his special skill and acumen. No material has been placed on record in this behalf. This case is thus fully covered by the decision of the Supreme Court in Raj Kumar Singh Hukam Chandji V/s. CIT [1970] 78 ITR 33. It must, therefore, be held that the income as directors remuneration of Gopal Narain Singh is his individual income. No material has been placed on record in this behalf. This case is thus fully covered by the decision of the Supreme Court in Raj Kumar Singh Hukam Chandji V/s. CIT [1970] 78 ITR 33. It must, therefore, be held that the income as directors remuneration of Gopal Narain Singh is his individual income. The questions thus referred to us are answered as follows : Assessment year 1965-66 : (1) The Tribunal was not correct in law in excluding the share income received from M/s. Gopal Narain Singh and others from the total income of the Hindu undivided family. (2) The Tribunal was correct in law in excluding the directors remuneration from the total income of the Hindu undivided family. Assessment year 1964-65: This question is the same as the first question for the year 1965-66. In this regard as well, I hold once again that the Tribunal was not correct in law in excluding the share income received from M/s. Gopal Narain Singh and others from the total income of the Hindu undivided family. 14 The only question for 1964-65 and the first question for 1965-66 are thus answered in the negative, in favour of the Revenue and against the assessee. The second question for 1965-66 must be answered in favour of the assessee and against the Revenue, Learned senior standing counsel stated at the Bar that the second question referred for the assessment year 1965-66 arose in 1964-65 as well. That appears to be so from the orders of the Income-tax Officer and the Appellate Assistant Commissioner. In that situation, for both the assessment years, the directors remuneration must be excluded from the total income of the Hindu undivided family. 15. The references are thus answered as mentioned above. In the circumstances of the case, there shall be no order as to costs. Let a copy of this judgment be transmitted to the Assistant Registrar, Income-tax Appellate Tribunal, in terms of Sec.260 of the Income-tax Act, 1961. Ashwini Kumar Sinha, J. 16 I agree.