https://www.taxtmi.com/caselaws?id=37791 Amounts paid by a Maharaja to his adopted son and daughter-in-law from privy purse funds were examined on the test of diversion of income at source versus application of income after receipt. The exemption attached to the privy purse in the Maharaja's hands did not control the tax character of later family payments. Because there was no custom, usage, statutory duty, or enforceable obligation to make those payments, and the sums varied at his discretion, they were treated as voluntary payments made after receipt of income. On that basis, the payments were not taxable as income in the hands of the recipients. en-us Thu, 01 Feb 1979 00:00:00 +0530 Tue, 31 Jan 2017 15:35:00 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=37791 Amounts paid by a Maharaja to his adopted son and daughter-in-law from privy purse funds were examined on the test of diversion of income at source versus application of income after receipt. The exemption attached to the privy purse in the Maharaja's hands did not control the tax character of later family payments. Because there was no custom, usage, statutory duty, or enforceable obligation to make those payments, and the sums varied at his discretion, they were treated as voluntary payments made after receipt of income. On that basis, the payments were not taxable as income in the hands of the recipients. Case-Laws Income Tax Thu, 01 Feb 1979 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=37791