Recurring maintenance allowance treated as taxable income; exemption failed because payment was not from Hindu family or estate income.

A recurring maintenance allowance received under a political arrangement was treated as income because a periodical receipt from a definite source falls within the broad meaning of income under the taxing statutes. The claimed exemption failed because the statutory exception for sums received by a member of a Hindu undivided family, or from an impartible estate, applies only where the payment comes from the income of that family or estate. As the allowance was paid from the consolidated fund after merger, and not from such income, the receipt remained taxable and the exemption was denied.

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Issues: (i) Whether the maintenance allowance of Rs. 2,000 per month received by the appellant constituted income chargeable to tax. (ii) Whether the allowance was exempt from income-tax under the provisions relating to sums received by a member of a Hindu undivided family or from an impartible estate.

Issue (i): Whether the maintenance allowance of Rs. 2,000 per month received by the appellant constituted income chargeable to tax.

Analysis: The expression "income" in the relevant taxing statutes was construed broadly and inclusively. A recurring monetary receipt from a definite source falls within the ordinary meaning of income, and the allowance was a periodical receipt received by the appellant. The Court therefore treated the maintenance allowance as income for the purposes of the Income-tax Act.

Conclusion: The allowance was income chargeable to tax.

Issue (ii): Whether the allowance was exempt from income-tax under the provisions relating to sums received by a member of a Hindu undivided family or from an impartible estate.

Analysis: The exemption provisions applied only where the sum received by a member of a Hindu undivided family was paid out of the income of the family or, in the case of an impartible estate, out of the income of the estate belonging to the family. After merger of the erstwhile State, the property, if any, vested in the Union of India and the allowances were paid from the consolidated fund under a political arrangement, not from the income of a Hindu family or impartible estate. The claim for exemption therefore did not fall within the statutory exception.

Conclusion: The allowance was not exempt and the liability to pay income-tax was upheld.

Final Conclusion: The maintenance allowance was held taxable and the claimed exemption was denied, so the challenge to the levy failed.

Ratio Decidendi: A recurring maintenance allowance received under a political arrangement after merger of a princely State is taxable as income, and exemption is unavailable unless the payment is shown to be directly from the income of a Hindu undivided family or an impartible estate within the statutory exception.

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