These appeals by revenue pertaining in to three partners of firms, Anguvilas M. V. Muthiah Pillai Firm, Dindigual are consolidated and disposed of by common order of sake of convenience as they involve common facts n d common issue raising common grounds. These appeals pertain to assessment years 1978-79 to 1980-81 and 1982-83 and are directed against common but separate orders of Commissioner (Appeals) dated 8-9-1983 wherein he held that salary income received by partners who represented their respective HUFs in abovesaid firm should not be included in hands of HUF but should be separately assessed in hands of partners in individuals status. In common grounds, revenue urged that orders of Commissioner (Appeals) should be set aside and that of ITO be restored. 2. assessee are HUFs (specified) and they are represented in firm, Anguvilas M. V. Muthiah Pillai Firm by their kartas. firm is carrying on business in manufacture and sale of scented tobacco. Originally assessment under section 143(3) of Income-tax Act, 1961 ('the Act'), was made in case of each partner for assessment year 1978-79 excluding remuneration of Rs. 13,200, Rs. 13,200 and Rs. 15,600, respectively in cases of partners, Shri M. V. M. Chellamuthu Pillai, Shri M. V. M. Veeramuthu Pillai and Shri M. V. M. Angamuthu Pillai. Later on, assessment was reopened under section 147(b) of Act as result of information as to law contained in Tribunal's decision in case of S. Janagarajan [IT Appeals Nos. 957 and 958 of 1977-78, dated 31-1-1978] and, consequently, income had escaped assessment as result of wrong deduction of remuneration from allocated share income. For reasons given in assessment order for 1979-80 ITO included remuneration as part of share income from firm and brought to tax amount in hands of respective HUFs. In other years, ITO included remuneration as part of share income by way of regular assessments under section 143(3). 3. case of ITO was that partners were paid remuneration right form first year of joining firm besides share of profits therein and, therefore, assessee' contention that remuneration was paid for vast experience and mixing of secret ingredients with tobacco, was not tenable. In past up to and including assessment year 1978-79 remuneration paid to partners was duly admitted and assessed as income of respective HUFs. partnership deeds dated 6-2-1978 and 6-2-1979 and codicil dated 6-3-1971 provided for annual remuneration and monthly remuneration to partners and there was provision for increasing salary to partners by mutual agreement of partners. Further, remuneration was not paid for individual skill because business was in existence even prior to partition on 4-2-1954 and, therefore, right to claim salary arose as result of partnership contract and not for individual skill. As partners they were only required to perform normal work of firm and, therefore they were not entitled to any payment in individual capacity. partner played dual role - one in th capacity of partner in looking after firm's business and another as manager of HUF and claim of salary for individual services creates conflicts of interests and there was also no justification for claiming salary from share income in terms of section 67 of Act. Hence, he has included remuneration received by partners as their share income and assessed same in hands of respective HUFs. 4. On appeal by assessee, Commissioner (Appeals) in his speaking order in case of partner Shri M. V. M. Angamuthu Pillai upheld validity of reassessment proceedings taken for assessment year 1978-79 on basis of interpretation of law given by Tribunal which constituted 'information' in terms of section 147(b). On merits he disagreed with view of ITO that remuneration paid to partner should be included in HUF assessment by relying on ratio of Supreme Court in case of CIT v. Gurunath V. Dhakappa [1969] 72 ITR 192, Premnath v. CIT [1970] 78 ITR 319 and Rajkumar Singh Hukum Chandji v. CIT [1970] 78 ITR 33 wherein it has been held that where remuneration was paid by firm to partner for services rendered by him such salary should be assessed in hands of partners in his individual capacity and not in capacity of karta of HUF. Her also noted different judgment of Supreme Court in case of V. D. Dhanwatey v. CIT [1968] 68 ITR 365 wherein it has been held that if remuneration received by partner was directly relatable to investment of HUF funds invested by partner and if there was detriment to HUF assets because of remuneration by partner in his individual capacity then department will be justified in including salary income in HUF assessment. In view of this decision, Commissioner (Appeals) set out to ascertain facts of case to find out whether remuneration received by partners was for services rendered by them in their individual capacity or was merely different name for his share of net profit of firm. In this regard, Commissioner (Appeals) came to conclusion that he was satisfied that each of partners has special skill and experience and facts that no member of family was paid remuneration before partition on 4-2-1954 and kartas included their respective remuneration in respective HUF assessments up to assessment year 1971-72 were irrelevant for deciding issue before him inasmuch as admittedly principle of res judicata did not apply to income-tax proceedings. Thereafter, Commissioner (Appeals) proceeded to consider actual services rendered by each of partners and observed that in firm's business of manufacturing scented chewing tobacco involving trade secrets. partner Shri Angamuthu Pillai looked after purchases of firm, Shri Veeramuthu Pillai looked after sales of firm and Shri Chellamuthu Pillai looked after labour administration and amount of remuneration paid to each partner as per codicil dated 6-2-1971 and partnership deeds dated 6-2-1978 and 6-2-1979 were very reasonable and could not be called excessive by any means considering magnitude of business of firm. 5. Commissioner (Appeals) thereafter applied test laid down by Supreme Court in case of V. D. Dhanwatey (supra) and found that share o f profit for assessment year 1978-79 was Rs. 1,28,734 while salary income paid to partner was Rs. 15,600 in case of Angamuthu Pillai and, therefore, salary income was small amount only. He has also cited decision of Tribunal 'B' Bench, Madras in case of ITO v. T. Illango [IT Appeal No. 435 (Mad.) of 1982. dated 11-6-1982] wherein has been held that salary paid to partner who was karta of HUF should be assessed in hands of individuals and not in hands of HUF. He has also referred to affidavits dated 28-8-1972 filed by Smt. Mariammal to effect that partners have rendered actual services to firm and those affidavits stood unrebutted. For these reasons, Commissioner (Appeals) came to conclusion that remuneration should be assessed in individual hands of partners and not as part of share income of firm in hands of respective HUFs. 6. learned departmental representative has been heard and besides reiterating common grounds taken in these appeals he emphasised fact that in law there could be no employer - employee relationship as held by Supreme Court in case of CIT v. R. M. Chidambaram Pillai [1977] 106 ITR 2 9 2 and, therefore, remuneration received by partners could not be considered as payment for services rendered in their individual capacity. He, therefore, submitted that ITO was justified in including remuneration as part of share income of HUFs. 7. learned counsel for assessee, on other hand, submitted that test laid down by Supreme Court in case of V. D. Dhanwatey (supra) was crucial to decide issue and Commissioner (Appeals) having found as matter of fact that payment of remuneration was not detrimental to interests of HUF he supported orders of Commissioner (Appeals). In this connection, he submitted that Allahabad High Court in case of Laxmandas v. CIT [1982] 138 ITR 628 has held that merely because payment of salary to karta was on account of clause in partnership agreement that by itself would not necessarily render payment to individual payment to his HUF and payment of salary to karta could not be assessed as income of his HUF. 8. We have duly considered rival contentions and facts of case. In our view orders passed by Commissioner (Appeals) are valid in law justified in facts and circumstances of case set out in his orders and therefore, do not require any interference. Allahabad High Court in case of Laxmandas (supra), has duly noted decisions of Supreme Court in cases of CIT v. D. C. Shah [1969] 73 ITR 692, CIT v. Gurunath V. Dhakappa [1969] 72 ITR 192, V. D. Dhanwatey (supra) and also decision of Supreme Court in R. M. Chidambaram Pillai's case (supra) and held that merely because payment of salary to karta was on account of clause in deed of partnership that by itself would not necessarily render payment to individual payment to HUF and payment of salary to karta could not be assessed as income of his HUF. High Court has also held that where HUF is partner in firm through its karta and if karta has received any remuneration from firm because of his special aptitude for business of firm and for services rendered by him to firm and if remuneration is earned not on account of any detriment to joint family assets, then such remuneration received by karta is not assessable as income of HUF, unless remuneration has direct nexus with investment of funds of family in firm. In our view, decision of Allahabad High Court applies to assessee's cases squarely. It is on record that assessee-partners have rendered specialised services in different sections of business of manufacturing scented tobacco and turnover has been increased to 1.5 crores. Allahabad High Court has duly noted decision of Supreme Court in case of R. M. Chidambaram Pillai (supra) but distinguished case. Even in case of R. M. Chidambaran Pillai (supra) Supreme Court has observed as under: "...... In income-tax law firm is unit of assessment, by special provisions, but is not full person which leads to next step that since contract requires two distinct persons, viz., employer and employee, there cannot be contract of service, in strict law, between firm and one of its partners. So that any agreement for remuneration of partner for taking part in conduct of business must be regarded as portion of profits being made over as reward for human capital brought in......" From above observation it is clear that remuneration paid to partner was nothing but reward for human capital brought in by them in contradistinction to capital or investment of respective HUFs. Therefore, keeping in view specialised services rendered by partners which fact remains uncontroverted remuneration paid to partners should be regarded only as reward for human capital brought in by them and, therefore, remuneration should be assessed in individual hands of respective partners. 9. Madras High Court in case of CIT v. Surendra Manilal Mehta 1984 Tax LR 371 held in similar circumstances as under: "...... Indeed Sri Suresh B. Mehta has been found by Tribunal to posses certain special skill. Payment of remuneration for making available to business of firm such special skill would really be in nature of compensation for services rendered by exercise of such special skill. This is not just same as attending to business of firm in ordinary course as partner entitled to do so. Therefore, remuneration paid by firm and received by partner is not in any manner related to investment of the, Hindu undivided family in firm. On other hand, it is in nature of compensation for making available to firm, benefit of personal skill and experience of four out of six partners, in line of business pursued by firm. In exercising such skills for purpose of conduct of business of firm, detriment, if any, is personal to partners and not to undivided family or its properties or investment in firm......" (p. 374) In fact, Madras High Court has referred to decision of Supreme Court in case of R. M. Chidambaram Pillai (supra), and observed that decision of Supreme Court did not in any manner assist in advancing case of revenue. After referring to various decisions, Madras High Court has upheld decision of Tribunal holding that remuneration paid in that case was for services rendered by partners and such receipt would not partake character of income of HUF for purposes of tax treatment. Following respectfully aforesaid decision of Madras High Court, we have no hesitation in upholding order of Commissioner (Appeals) and rejecting grounds taken by revenue. 10. In result, appeals are dismissed. *** FIRST INCOME TAX OFFICER v. M.V.M. CHELLAMUTIUPILLAI