HER HIGHNESS MAHARANI KESARKUNVERBA SAHEB OF MORVI Vs. COMMISSIONER OF INCOME TAX BOMBAY NORTH KUTCH AND SAURASHTRA AHMEDABAD

JUDGEMENT

(1.) This is an appeal by special leave against a judgment and order of the High Court of Bombay. The assessee Her Highness Maharani Kesarkunverba Saheb, the Raj Mata of Morvi State, is the appellant and the Commissioner of Income-tax Bombay, North, is the respondent. The question that arises for decision is whether the annual cash allowance paid to the appellant in circumstances stated below falls within Paragraph 15 (1) (i) of the Part B States (Taxation Concessions) Order, 1950 (hereinafter referred to as the Order) and is therefore exempt from income-tax.

(2.) The appellant was receiving from the Morvi State since 1922 an allowance called 'Jiwai' (maintenance allowance). By a Resolution dated September 26, 1947 passed by His Highness Lukhdhirji of Morvi, the husband of the appellant, it was resolved that a sum of Rs. 5,000/- per month be paid to the appellant and provision be made for the amount by the Treasury Office in the Budget in the same manner as before. On January 21, 1948 His Highness Lukhdhirji abdicated and his son His Highness Mahendra Singhji succeeded to the rulership. The covenant for the formation of Kathiawar States' Union was signed on January 23, 1948. On February 26, 1948 a Resolution was passed by the son of the appellant granting a village, Mota Dehisara, to the appellant. The relevant portion of this Resolution was as follows:

(3.) On appeal to the Appellate Assistant Commissioner the amount of Rs. 35,807/- was held to be liable to tax and not the sum of Rs. 24,193/-. An appeal was then taken to the Income-tax Appellate Tribunal which held that the entire sum was exempt from income-tax and super-tax, as it fell within Paragraph 15 (1)(i) of the Order. The Tribunal said: