- (1.) THE assessee is a Hindu undivided family (hereinafter referred to as "the HUF" ). The relevant previous year ended on 31st March, 1967. The case relates to the assessment year 1967-68. The sources of income of the assessee were from house property, capital gains and there was also "income from other sources". The assessment was completed on 15th March, 1972, on a total income of Rs. 36,430 as against the returned income of Rs. 16,433. The Nawab of Malerkotla transferred in favour of Shri Sewal Singh a piece of land measuring 12 kanals and 3 marlas stating its value to be Rs. 16,000. In respect of the aforesaid land, the ITO fixed its value at Rs. 20,000 and included the same as the assessee-HUF's income holding that the said land had been conveyed by the Nawab in token of the service rendered by Shri Sewal Singh in his capacity as a general attorney to the Nawab for the purpose of selling the lands belonging to the Nawab;
(2.) IN appeal, filed before the AAC, the assessee-HUF raised the plea that the land in question had been gifted to the assessee-HUF by the Nawab in token of his love and affection. The learned AAC accepted the assessee's appeal.
(3.) BEING aggrieved, the revenue went in appeal to the Income-tax Appellate Tribunal, Chandigarh Bench (hereinafter referred to as the "tribunal" ). The Tribunal observed that if the assessee had not been appointed as general attorney and worked to the entire satisfaction of the Nawab, the question of gift would never have arisen and held that the so-called gift was primarily a payment in lieu of the services rendered by the assessee to the Nawab as his general attorney. As a result, the amount, of Rs. 20,000 was found to be taxable income of the assessee-HUF. The Tribunal refused to consider the contention raised on behalf of the assessee that the land in question was gifted to Shri Sewal Singh in his individual capacity and the value of the land gifted could not be taken to be income in the hands of the HUF on the ground that this plea was not raised before the authorities below.;