Law:

Section:

Section 60A of the Indian Income-tax Act, 1922, read with paragraphs 15 of the Part B States (Taxation Concessions) Order, 1950 - Power to make exemption, etc., in relation to merged territories or to territories which immediately before 1-11-1956, were comprised in any Part B State or to Chandernagre - Appellant/assessee, wife of ruling prince of a Part B State, was granted by said State maintenance allowance and also a village - Said State subsequently became part of Saurashtra Union which refused to continue maintenance allowance and to recognize grant of village to appellant but granted certain cash annuities in lieu of said village and also certain cash amount per annum by way of maintenance allowance - Whether, cash annuities granted in lieu of village to appellant was maintenance falling with paragraph 15(1)(i) of 1950 order and as such was exempt from tax - Held, yes Section 256 of the Income-tax Act, 1961 [Corresponding to section 66 of the Indian Income-tax Act 1922] - High Court - Reference to - Whether High Court can not go behind findings of Tribunal - Held, yes FACTS The appellant was receiving from the Part B State since 1922 a maintenance allowance called Jiwai. By a resolution dated 26-9-1947, passed by husband of the appellant, it was resolved that certain sum per month be paid to the appellant and provision be made for the amount by the Treasury Office in the budget in the same manner as before. On 21-1-1948, the appellant's husband abdicated and his son succeeded to the rulership. On 26-2-1948, a resolution was passed by the son of the appellant granting a village to the appellant. On 20-3-1948, the said State became a part of the Saurashtra Union. The Government of Saurashtra refused to continue the maintenance allowance or to recognise the grant of the village to the appellant. It paid to the appellant an amount of Rs. 35807 in lieu of her right to enjoy income from village and also Rs. 24193 per annum by way of Jiwai. The ITO held both of those amounts to be liable to tax. On appeal to the AAC the amount of Rs. 35807 was held to be liable to tax and not the sum of Rs. 24193. On further appeal, the Tribunal held that the cash annuity of…

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