1947 (2) TMI 25 - HC - Income Tax

Summary

Issues Involved:
1. Whether the maintenance allowance received by the assessee was referable to the will and codicil executed by her deceased husband.
2. Whether the assessee's right to receive maintenance from the estate affects the taxability of the allowance received under the will and codicil.
3. Whether the maintenance allowance received by the assessee was as a member of a Hindu undivided family within the meaning of Section 14(1) of the Income Tax Act.

Issue-wise Detailed Analysis:

Issue 1: Whether the maintenance allowance received by the assessee was referable to the will and codicil executed by her deceased husband.
The Tribunal found that the maintenance allowance specified in the will and codicil was intended for the respondent's guzara or maintenance as a widow in the family. This was supported by the fact that the maintenance allowance was made a charge on specific properties of the taluqdari estate. The Tribunal concluded that the provision of a specified sum of maintenance under the will did not modify her right as a family member to be maintained out of the estate's income.

Issue 2: Whether the assessee's right to receive maintenance from the estate affects the taxability of the allowance received under the will and codicil.
The Tribunal held that the respondent's right to maintenance from the estate as a family member was not waived, renounced, or surrendered. The maintenance allowance received under the will and codicil was deemed to be in line with her inherent rights as a family member. The Tribunal referenced the decisions in Commr. of Income tax, C.P. and U.P. v. Rudh Kumari and Mt. Radha Kuer v. Commr. of Income Tax B. & O., which supported the view that the maintenance received by a widow from a family estate is exempt under Section 14(1).

Issue 3: Whether the maintenance allowance received by the assessee was as a member of a Hindu undivided family within the meaning of Section 14(1) of the Income Tax Act.
The High Court addressed this issue by examining the nature of the Mahewa estate and the respondent's status. It was argued that the Mahewa estate, being an impartible estate, meant the income belonged solely to the holder and not the joint family. However, the Court noted that the real question was whether the assessee received the payment as a member of a Hindu undivided family, not the source of the payment. The Court cited the case of Commr. of Income Tax v. Narayana Gajapathi Raju, which clarified that the status of the recipient as a family member was crucial for claiming exemption under Section 14(1).

The Court also referenced the case of Commr. of Income tax, C.P. and U.P. v. Rudh Kumari, which supported the view that the existence of a will did not negate the right to claim maintenance as a family member. The Court concluded that the maintenance allowance received by the respondent was indeed as a member of a Hindu undivided family, irrespective of the will and codicil.

Conclusion:
The High Court concluded that the maintenance allowances received by Rani Bijay Raj Kunwari in Faslis 1345 and 1346 were received by her as a member of a Hindu undivided family within the meaning of Section 14(1) of the Income Tax Act. The assessee was entitled to claim exemption from income tax for these allowances. The Court ordered the Income Tax Department to pay Rs. 200 in costs to the assessee.