5,00,000 was to be adjusted in the accounts, the Maharaja wrote on December 27, 1950, what is described as an order and directed that the sum should be debited to his Personal Expense Account.
5,00,000 were paid, the State of Bhavnagar as such had ceased to exist.
On March 1, 1948, Bhavnagar State was merged in the United States of Saurashtra and the Maharaja ceased to be the ruler of the said State as from that date.
The assessability of this sum of Rs.
The Tribunal was number inclined to believe in the companytents of that letter and would leave the matter at that.
Hardyal Hardy and D. Gupta for the Respondent.
This sum was paid to the assessee on June 12, 1950.
The order was in the following terms He looked after us well in our childhood and rendered valuable services sincerely and with single minded loyalty to us and our State during extremely difficult period of the last war and thereafter, which has enhanced the prestige and prosperity of the State and given the State and the people a place of pride in India.
Against that order an appeal was taken to the Income tax Appellate Tribunal but the Tribunal also dismissed the appeal.
Appeal from the Judgment and Order dated October 6, 1958, of the Bombay High Court in Income Tax Reference No.
J. Kolah, Dwaraka Das, S. N. Andley, Rameshwar Nath, J. Dadachanji and P. L. Vohra for the Appellants.
By Hazur Order dated January 22, 1948, the Maharaja had companypensated the assessee for valuable services rendered and single minded loyalty to the Maharaja and to his State during the difficult period of the war and thereafter, which had added to the prestige and prosperity of the State and in appreciation of that the Maharaja had granted to the assessee a monthly pension of Rs.
5 lacs was raised in the companyrse of the assessment proceedings for the assessment year 1951 52 and at the request of the assessee which is stated to be oral the Maharaja wrote on March 10, 1953, the following I companyfirm that in June 1950, 1 gave you a sum of rupees five lacs Rs.
The Tribunal did number accept the companyrectness of what was stated in the letter but attached a great deal of importance to the document of December 27, 1950, which the Tribunal thought was a company temporaneous document.
5,00,000 out of the account of the Maharaja does number mention any reason for payment.
The assessee took an appeal to the Appellate Assistant Commissioner which was dismissed.
5 lakhs was given by the Maharaja of Bhavnagar to the predecessor of the appellants, who was an ex Dewan of the State.
2,000, which was paid to the assessee even after the merger and of the establishment of the United States of Saurashtra from out of the public revenue.
When asked later to clarify the reasons for making this gift the Maharaja made it clear that the gift was as a token of affection and regard for the assessee and his family and that the amount was paid by Messrs. Premchand Roychand Sons from out of the private monies of the Maharaja with that firm.
The letter which was written by the Maharaja on March 10, 1953, was rejected because of the circumstances of the case one of which was the companytemporaneous document.
The Judgment of J. L. Kapur and J. C. Shah, JJ.,
5,00,000 received on June 12, 1950, was liable to income tax under s. 7 1 read with explanation 2 of that section as it stood before the amendment by the Finance Act, 1955.
The Income tax Appellate Tribunal took into account the two documents the first of which has been described as an order of December 27, 1950, which was treated as a companytemporaneous document and the other the letter of March 10, 1953, which was about two years later.
On May 31, 1950, the Maharaja directed Messrs. Premchand Roychand Sons, Bombay, with whom he had an account to pay by cheque to Mr. A.P. Pattani Rs.
On June 12, 1950, a sum of Rs.
2,000 two thousand which is the monthly salary he is drawing at present.
This amount was paid to you by Premchand Roychand Sons according to my letter of 31st May, 1950, from moneys in my account with them.
November 29.
CIVIL APPELLATE JURISDICTION Civil Appeal No.232 of 1960.
This amount was paid to you by Premchand Roychand Sons according to my letter of 31st May, 1950, from moneys in my account with them.
5 lacs was to be adjusted in the accounts and on December 27, 1950, the Maharaja made the following order In companysideration of Shri Annantrai P. Pattani the Ex Diwan of our Bhavnagar State having rendered loyal and meritorious services Rs.
It is stated that the accountant of the Maharaja asked for instructions as to how that amount of Rs.
KAPUR, J. This is an appeal pursuant to a certificate of the High Court of Bombay against the judgment and order of that Court in Income tax Reference No.
In appreciation of this, it is hereby decided to grant him a monthly pension of Rs.
10 of 1958.
5,00,000 which wag a gift as a token of my affection and regard for you and your family.
The facts which have given rise to the appeal are that the late Mr. Annantrai P. Pattani, hereinafter called the assessee was, by Hazur Order dated December 10, 1937, appointed the Chief Dewan of Bhavnagar State.
When as is alleged an accountant of the Maharaja asked as to how that amount of Rs.
Date 22 1 1948.
The order by which Messrs. Premchand Roychand Sons, Bombay, were directed to pay the sum of Rs.
2,000 to the assessee.
On January 15, 1948, the Maharaja of Bhavnagar introduced responsible Government in his State and appointed the assessee as the Chairman of the Bhavnagar Durbar Bank but he received numbersalary for that post.
During the pendency of the proceedings in the High Court the assessee died and his heirs and legal representatives were brought on the record and hence they are the appellants.
At the time when Rs.
10 of 1958, answering the question referred to it against the assesses whose legal representatives are the appellants before, us, the respondent being the Commissioner of Income tax.
On the same date by another Hazur Order the Maharaja granted a monthly pension of Rs.
On these facts the Income tax Officer held that Rs.
It also stated, why it is number clear, that that sum was to be given to the assessee in companysideration of the assessees loyal and meritorious services as a gift.
5,00,000 Rupees Five Lacs are given to him as gift.
The Maharaja was numberlonger a Ruling Chief but was the Governor of the State of Madras.
The reference is to the letter of the Maharaja dated March 10, 1953.
5 lacs out of the amount lying to the credit of my account with you.
