T.P. Mukerjee, J. - (1.) This is a reference made by the Appellate Tribunal under Sec. 27(1) of the Wealth -tax Act (hereinafter referred to as "the Act"). The reference has been made at the instance of Maharaja Vibhuti Narain Singh of Varanasi (hereinafter referred to as "the assessee"). The statement of the case submitted by the Tribunal relates to the assessment years 1957 -58 and 1959 -60, the corresponding period being the 31st March, 1957, and the 31st March, 1958.
(2.) The material facts bearing on this reference are as follows:
(3.) The assessee was previously the ruler of a Native State called the Banaras State. On 5th September, 1949, there was an agreement between the Governor -General of India and the assessee. India at that time enjoyed dominion status under the British Crown. Article I of that agreement, extracts from which have been annexed to the statement of the case as annexure "A", runs as follows: "The Maharaja of Banaras hereby cedes to the Dominion Government full and exclusive authority jurisdiction and powers for and in relation to the governance of the State and agrees to transfer the administration of the State to the Dominion Government on the 15th day of October, 1949 (hereinafter referred to as 'the said day') As from the said day, the Dominion Government will be competent to exercise the said powers, authority and jurisdiction in such manner and through such agency as it may think fit.";;