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TMI Blog1935 (5) TMI 27X X X X Extracts X X X X X X X X Extracts X X X X ..... in respect of an annual sum of ₹ 2,40,000 payable to him during his life pursuant to a covenant contained in the inden ture hereinafter mentioned. The appellant was the owner of an estate in British India known as the Nine Annas Tikari Raj. He had a daughter who had married a son of Rani Bhubaneshwari Kuar (hereinafter referred to as the Rani.) By an indenture, dated March 29, 1930, and made between the appellant of the one part and the Rani of the other part, the appellant conveyed the greater portion of his said estate to the Rani for the valuable consideration therein appearing. The indenture recites among other facts that the appellant was absolute owner of the estate and that for the purpose of discharging certain of his d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd proceedings whatsoever in respect of the said debts or any of them. This indenture does not itself contain any charge on the estate of the annual sums covenanted to be paid; but their Lordships were informed and the case proceeded upon the footing that the stipulated security had been given by a separate document: 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, ₹ 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f this Act to accrue, or arise, or to be received in British India. (2)...... (3) This Act shall not apply to the following classes of income: ....... (viii) Agricultural income. ....... 6. Save as otherwise provided by this Act, the following heads of income, profits and gains, shall be chargeable to income tax in the manner hereinafter appearing, namely:- (i) Salaries. (ii) Interest on Securities. (iii) Property. (iv) Business. (v) Professional Earnings. (vi) Other Sources. 7. (1) The tax shall be payable by an assessee under the head 'Salaries' in respect of any salary or wages, any annuity, pension, or gratuity, and any fees, commissions, perquisites, or profits received by him in lieu of, or in addition ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... question was not a capital sum, but was income within the meaning of that word as used in Section 12 (1) of the Act, and therefore taxable. On the other hand, KHAJA MOHAMMAD NOOR, J., took the view that the transaction was a sale of the estate for a capital sum or price of an amount dependent on the duration of the appellant's life, and that each annual payment was instalment of that capital sum and therefore not taxable as income. Their Lordships find themselves in agreement with the Chief Justice and VARMA, J. Indeed but for the elaborate argument addressed to the Board they might well have contended themselves with adopting the careful judgment of the Chief Justice which covers the whole ground. It is impossible, without ignori ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. But it was argued that even though the life annuity be income, as distinct from capital, it still is not income taxable under the Act, because the words income, profits and gains in Section 12(1) of the Act must be construed as including only such income as constitutes or provides a profit or gain to the recipient, i.e., that the word income is in some way limited by its association with the words profits and gains. This being so, it is said that in view of (a) the true value of the estate (alleged to be about 2 crores of rupees) and (b) the age of the appellant (alleged to be about 47 at the date of the transaction), the annuity could never constitute or provide a profit or gains to him, and therefore cannot be income whi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the taxing Acts of other countries, Acts which are couched in different terms and framed upon different lines. So far as these decisions had any relevance to the points under consideration, they appear to have been suitably considered and dealt with in the judgments of the Chief Justice and VARMA, J. Their Lordships think it unnecessary to discuss them further. They content themselves with repeating the view expressed in the judgment of the Board above referred to, that little can be gained by trying to construe an Income Tax Act of one country in the light of a decision upon the meaning of the income-tax legislation of another. For the reasons above appearing, their Lordships are of opinion that this appeal should be dismissed, and t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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