Recurring alimony from a decree is taxable income, while a non-commuted lump sum maintenance payment is capital receipt.

Monthly alimony of Rs. 750 payable under a decree of nullity was income because it was a recurring, periodic receipt arising from a definite enforceable source and was not a casual or windfall payment, so it was liable to tax. The lump sum alimony of Rs. 25,000 was capital in nature because it was a single payment, not a periodic return, and was not shown to be a commutation of a pre-existing right to recurring income, so it was not taxable as income. The governing distinction was between periodic receipts from a definite source and a capital payment.

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Issues: (i) Whether monthly alimony of Rs. 750 received under a decree of nullity was income liable to tax. (ii) Whether lump sum alimony of Rs. 25,000 received under the same decree was income liable to tax.

Issue (i): Whether monthly alimony of Rs. 750 received under a decree of nullity was income liable to tax.

Analysis: The recurring monthly payment arose from the decree, which crystallised the assessee's enforceable right to receive alimony. The payment was regular, periodic, and referable to a definite source. It therefore answered the judicial tests of income as a return coming in with regularity from a definite source and was not a casual or windfall receipt.

Conclusion: The monthly alimony was income in the assessee's hands and was liable to tax.

Issue (ii): Whether lump sum alimony of Rs. 25,000 received under the same decree was income liable to tax.

Analysis: The lump sum payment did not represent a periodic return and was not shown to be a commutation of any pre-existing right to recurring income. The decree recognised and partly worked out the assessee's maintenance right by a single capital payment, and the amount was not traceable to the character of income in the same manner as the monthly allowance.

Conclusion: The lump sum alimony was a capital receipt and was not income liable to tax.

Final Conclusion: The reference was answered against the assessee on the recurring monthly alimony and in her favour on the lump sum alimony, resulting in mixed success.

Ratio Decidendi: A recurring payment arising from a decree and payable periodically from a definite source is income, but a lump sum payment that is not a commutation of recurring income and is in the nature of a capital payment is not taxable as income.

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