MAHARAJ KUMAR GOPAL SARAN NARAIN SINGH Vs. COMMISSIONER OF INCOME-TAX

JUDGEMENT

(1.) THE appellant appeals from a judgment of the High (Court of Judicature at Patna on a reference under Section 66 (2) of the Indian Income-tax Act, 1922 (hereinafter referred to as the Act ). THE question for decision may be stated to be whether the appellant is assessable to income-tax and super-tax in respect of an annual sum of Rs. 2,40,000 payable to him during his life pursuant to a covenant contained in the indenture hereinafter mentioned.

(2.) THE appellant was the owner of an estate in British India known as the Nine Annas Tekari Raj. He had a daughter who had married a son of Rani Bhubaneshwari Kuar (hereinafter referred to as the Rani ).

(3.) THE taxing authorities in assessing the appellant in respect of the year 1931-1932 included in his assessable income the following item :-" Other sources, annuity, Rs. 2,40,000," being the sum received by him in pursuance of the Rani's covenant. THE appellant contends that no part of this receipt should be included, (1) because, being merely an instalment of the purchase price payable on the sale of his estate, it is not an annuity but a capital sum ; alternatively (2) because even if it be an annuity it is not taxable, because it does not fall within the description of what is taxable under the Act; and in the further alternative (3) because even if it would otherwise fall within such description, it is " agricultural income " and as such specifically excepted from the operation of the Act.