Widow's pension from UN staff fund treated as exempt receipt, not taxable income in the beneficiary's hands.

Widow's pension received from the United Nations Joint Staff Pension Fund was treated as a non-taxable receipt because it flowed from the deceased employee's exempt United Nations employment arrangement under the United Nations (Privileges and Immunities) Act, 1947. The deceased had contributed to the fund, and the widow received the pension as beneficiary under the scheme rules. On that basis, the amount was regarded as recompense linked to exempt emoluments rather than taxable income in the beneficiary's hands. The tribunal followed its earlier view that pension connected with United Nations emoluments is exempt, and the inclusion of the widow's pension in income was therefore unsustainable.

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Issues: Whether the widow's pension received from the United Nations Joint Staff Pension Fund was assessable to income-tax.

Analysis: The pension derived from the United Nations staff pension scheme was linked to the exempt emoluments of the deceased employee under the United Nations (Privileges and Immunities) Act, 1947. The deceased had contributed to the pension fund under the scheme, and the widow received the amount as beneficiary under the fund rules. The pension was treated as a recompense flowing from the exempt employment-related arrangement and not as taxable income in the hands of the beneficiary. The earlier tribunal view that pension linked to United Nations emoluments was exempt was followed, and the same reasoning was applied to the widow's pension.

Conclusion: The widow's pension was not taxable and the assessment made by including it in income was not sustainable.

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