MAHARAVAL LAKSHMANSINGH Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) AT the instance of the assessee the Income-tax Appellate Tribunal, Jaipur Bench, Jaipur ("the Tribunal" herein), has referred the following question of law arising out of its order dated July 21, 1978:

(2.) THE assessee is an individual. THE assessment year involved is 1975-76. THE previous year relevant to the assessment year 1975-76 ended on September 30, 1974. THE return for the previous year in question was filed on August 16, 1975, declaring a total income of Rs. 17,328. During the assessment proceedings, it was noticed by the Income-tax Officer that the assessee has rented out quarters, garage and godowns on rent at the rate of Rs. 9,322 per annum. THE assessee disclosed this income. In view of Section 10(19A) of the. Income-tax Act, 1961 (No. XLIII of 1961) (for short "the Act"), the annual value of any one palace of the Ruler was exempt. THE Income-tax Officer, vide order (annexure A) dated October 31, 1977, did not accept the contention of the assessee holding that in the previous year in question, the entire palace was not occupied by the assessee and, as such, the value of that portion of the palace, which was not inoccupation of the Ruler, was not exempt. He, therefore, made an addition of Rs. 9,322.

(3.) IT will be relevant to refer to Section 7 of the Rulers of Indian States (Abolition of Privileges) Act, 1972. (Act No. 54 of 1972) (for short "the Act of 1972"), by which certain amendments were made in the Act. According to Section 7 of the Act of 1972, before Clause (20) in Section 10, Clause (19A), which is as under, was inserted and deemed to have been inserted with effect from December 28, 1971 :