Maintenance allowance exemption upheld for a cash annuity received in lieu of a village grant under tax concession rules.

A cash annuity received in lieu of a village grant was held to be a maintenance allowance and therefore exempt from tax under paragraph 15(1)(i) of the Part B States (Taxation Concessions) Order, 1950. The Tribunal found, on the family arrangement and surrounding correspondence, that the recipient had been maintained since 1922 and that the village grant itself was by way of maintenance, even though the documents also referred to status, dignity and prestige. Maintenance was not limited to food and clothing and could reflect the status of the recipient. On reference, the SC held that the High Court could not reappreciate the Tribunal's findings under section 66(1) of the Income-tax Act.

---

---

Issues: Whether the sum of Rs. 35,807 granted to the assessee in lieu of the village grant constituted a maintenance allowance exempt under paragraph 15(1)(i) of the Part B States (Taxation Concessions) Order, 1950.

Analysis: The grant of the village and the later cash annuity had to be read in the background of the family arrangement and surrounding correspondence. The Tribunal had found that the appellant had been receiving maintenance since 1922 and that the village grant was also by way of maintenance, even though expressions such as "status and dignity" and "prestige" appeared in the documents. Maintenance was not confined to food and raiment and could vary with the status of the recipient. On a reference under section 66(1) of the Income-tax Act, the High Court was not entitled to go behind the Tribunal's findings and reappreciate the material as if in appeal.

Conclusion: The sum of Rs. 35,807 was maintenance allowance and was exempt from tax under paragraph 15(1)(i) of the Order; the answer was therefore in favour of the assessee.

---