TaxTMI 
TaxTMI 
1969 (12) TMI 28
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.... State the question arose whether the " Dholpur House " should be treated as private property of the ruler or the property of the State of Rajasthan. By letter dated 20th October, 1951, the Government of India informed the said Maharaja that the said house would be considered to be the property of the Rajasthan State but 1/3rd of the rental value would be paid to His Highness as a purely ex gratia arrangement, and in the event of the sale of the house, His Highness would be entitled to 1/3rd of the sale price minus the share of the Government of India in the form of 75% of the incremental value. Paragraph 2 of this letter, which is relevant, is quoted below : " As Your Highness is aware, we had to decide the question of the Delhi house on certain general principles and it will not be possible for us to make an exception in the case of your house alone ; I am afraid therefore that the decision that the house should be State property cannot be changed. In view, however, of the various circumstances connected with the Delhi house, the Government of India have decided that without prejudice to the decision that the house will be State property and as a purely ex gratia arrangement, ....
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....emant Singhji who was recognised as the Ruler of the Dholpur State. These payments ceased when the said property was sold out. The amounts of payments made are detailed below : Assessment year Rs. 1953-54 21,257 1954-55 21,257 1955-56 11,998 1955-56 9,259 1956-57 21,257 1957-58 21,257 1958-59 &nb....
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....he appellant over a series of years as long as this property continued to be with the Rajasthan Government. The Tribunal observed that notwithstanding the fact that it was a voluntary offer by the Government to pay this amount but since it was a promise which was not likely to be flouted at any time, the nature of this receipt in the assessee's hands was that of a periodical monetary return coming in with expected regularity.The Tribunal further held that the promise by the Government to pay the amount could be described as the source of income. The Tribunal finally observed that the payments, since they were being factually made to the assessee, could not be said to depend upon the whim of the payer. Although the undertaking by the Government to pay the amount may not be enforceable at law, nevertheless it was sufficient to constitute a source of income and the payments made to the assessee an income taxable under the Income tax Act. The Tribunal, however, did not agree that such income fell to be assessed under section 9 of the Income-tax Act, 1922. It was assessable only under section 12 of the said Act. " Two points arise in this reference. The first is whether the various a....
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....d therein and one class is that of receipts which are of a casual and non-recurring nature unless of course such receipts arose from business or the exercise of a profession, vocation or occupation. The scheme of the Act therefore shows that the concept of income under the Income-tax Act is of a comprehensive and all-pervading nature, and may include any receipt by a person. Viewed in this light, the various amounts received by the assessee were no doubt income under the Income-tax Act. Now, we come to the second point. It is clear that there is an express exemption of a receipt which is of a casual and non-recurring nature from being included in the total income unless such receipt arose from business or the exercise of a profession, vocation or occupation. In the instant case, it is contended before us that the various amounts received by the assessee were of a casual and non-recurring nature. The payments depended on the sweet will of the Government of India and were not compulsory and were not made on account of any obligation incurred by the Government of India, but were ex gratia, i.e., gratuitous. We have to examine whether, under these circumstances, it would be not prop....
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....or occupation. They were casual and non-recurring in nature inasmuch as they depended on the good wishes of the Government of India. The view that we have taken is amply supported by the law laid down in Rani Amrit Kunwar v. Commissioner of Income-tax , Rev. Father Prior, Sacred Heart's Monastery v. Income-tax Officer and H. H. Maharani Shri Vijaykuverba Saheb of Morvi v. Commissioner of Income-tax. In Rani Amrit Kunwar's case the Allahabad High Court was considering a case in which Rani Amrit Kunwar, who was the sister of His Highness Maharaja of Nabha State and was married to the Ruler of the Kalsia State, was receiving allowances which was budgeted in the budget of the Nabha State. Such allowance were being paid consecutively for a period of 20 years. Braund J. took view that the allowances were not to be construed to be the income of the Rani, but it was something in the nature of mere recurring windfalls though the payments were made regularly for the better part of 20 years. After analysing the concept of income, he observed that in construing the word " income " in the Indian Income-tax Act, one has to ask oneself whether having regard to all the circumstances surrounding....
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....the assessee, that such income would be exempt under section 4(3)(vii). Learned counsel for the department has, however, relied on the decision of the Punjab High Court in Princess Ruby Rajiber Kaur v. Commissioner of Income-tax. In that case, according to the long-standing custom prevailing in the Jind State, Princess Ruby Rajiber Kaur Grewal, daughter of the Maharaja of Jind, was given an annual allowance of Rs. 12,000 by that State in lieu of dowry. After the merger of the Jind State in the Pepsu region, the payment was stopped by the Pepsu Government some time in 1949. But on representation to the Government of India, the payments were made. Payment was again stopped by the Government of Pepsu in 1950 but they were again made to the Princess on the direction of the Government of India conveyed by the letter dated 25th November, 1953, which is quoted below : " I am directed to refer to the correspondence resting with Shri P. S. Rai's D.O. letter No. 215/A DV 53/4166 dated the 21st October, 1953, and to say that, after further careful examination of the case, the Government of India are satisfied that, (a) there was a custom in the jind State of granting annual allowances t....