1962VIL140BOMDT Equivalent Citation 1963 49 ITR 594 Bom nbsp BOMBAY HIGH COURT nbsp Incometax Reference No 61 of 1961 nbsp Dated18101962 nbsp HH MAHARANI SHRI VIJAYKUVERBA SAHEB OF MORVI AND ANOTHER nbsp Vs nbsp COMMISSIONER OF INCOMETAX BOMBAY CITY II nbsp Bench Y S TAMBE CJ AG AND V S DESAI J nbsp STATEMENT OF CASE By these four applications which are consolidated for the sake of convenience the administrator of the estate of the late HH Maharaja Sir Lukhdhirji Bahadur of Morvi the assessee requires the Appellate Tribunal to refer to the High Court some questions said to be of law and which are said to arise out of its orders under section 334 made on August 22 1960 in ITA Nos 4149 4150 4151 and 4152 all by the assessee and ITA No 3968 an appeal by the department all of 195960 Inasmuch as in our opinion a question of law does arise out of the aforesaid orders we hereby draw up a statement of the case and refer it to the High Court of Judicature at Bombay under section 661 of the Indian Incometax Act 1922 2 These reference applications arise out of the assessments made upon the assessee for the assessment years 195051 195152 195253 and 195354 the corresponding previous years being the financial years ended March 31 1950 1951 1952 and 1953 The applicants require the Tribunal to refer to the High Court one question which is common to all the four years and one more question which is peculiar to the assessment year 195354 and arising out of the Tribunals order in the departments appeal ITA No 3968 of 195960 The common question is in regard to the assessees claim to deduct professional charges of Rs 500 paid to JK DoshiampCo chartered accountants The question peculiar to the assessment year 195354 is in regard to the assessability of a sum of Rs 120000 3 At one time HH Maharaja Sir Lukhdhirji Bahadur of Morvi was the ruler of the erstwhile Indian State of Morvi He abdicated the Gadi in favour of his son HH Maharaja Mahendrasinhji on 21st January 1948 The father Maharaja died on May 4 1957 leaving behind him a will according to which his son HH Maharaja Mahendrasinhji was the sole executor The said sole executor also died on August 17 1957 leaving behind him his will which appointed certain persons as executors thereof Since the estate of the father Maharaja was not completely administered by them the executors of the will of the son Maharaja became administrators of the estate of the late HH Maharaja Sir Lukhdhirji and that is how these administrators came to be concerned in the incometax proceedings and these reference applications 4 HH Maharaja Sir Lukhdhirji Bahadur engaged the services of JK DoshiampCo chartered accountants to get his incometax assessments settled by the incometax department It appears that even after his death his executor HH Maharaja Mahendrasinhji and later the administrators continued to draw upon the services of the said firm The firm was to be paid Rs 300 for services rendered by it in getting the assessment settled for each assessment year The substantial portion of income brought to tax for these four assessment years consists of interest on securities section 8 dividends and interest on bank current accounts section 12 The sum of Rs 500 was not claimed as a deduction in the computation of income from a source under a particular head but it was a consolidated claim for a deduction in the computation of income from several sources falling under several heads It was common ground between the department and the assessee that the latter did not maintain any accounts and as such the provisions of section 13 would not come into operation for the purpose of computing income from a particular source falling under section 12 and if any under section 10 The claim for deduction of Rs 500 say in the computation of the income of the previous year ended March 31 1950 was founded on the sole ground that though the firm was to render professional services very much later after March 31 1950 in getting the assessment completed for the assessment year 195051 the subjectmatter of the computation related to the account year ended March 31 1950 At one time it was alleged that the assessee incurred liability to pay the said sum of Rs 500 in the account year ended March 31 1950 itself That allegation however remained unproved and as a matter of fact was not persisted in in the later stages of the proceedings It is also common ground that the sum of Rs 500 was not paid by the assessee to the firm of chartered accountants in the year ended March 31 1950 On these facts the Incometax Officer rejected the claim for deduction of Rs 500 for each of the years in the computation of income of the account years ended March 31 1950 1951 1952 and 1953 The department was prepared to allow such expenses either on quotactual payment basisquot or on quotincurred liability basisquot In appeal the Appellate Assistant Commissioner directed that such expenses should be allowed by the Incometax Officer in the year in which quotrelevant bills for the charges were presented to the appellantquot by the firm of chartered accountants Being dissatisfied with the said direction the matter was brought in appeal to the Tribunal Having regard to the facts mentioned above the Tribunal found no reason to interfere with the direction given by the Appellate Assistant Commissioner which it characterised as quotquite reasonable and fair particularly in a case of no accountantsquot This contention of the assessee has been dealt with by the Tribunal in paragraph 6 of its main order in ITA No 4149 of 195960 a copy of which is marked annexure quotAquot and forms part of the case 5 On these facts the assessee requires the Tribunal to refer the following question to the High Court for each of the four years 195051 195152 195253 and 195354 nbspnbspnbspnbspnbspnbspnbspnbspnbspnbspnbspnbspnbspnbspnbspnbspnbsp quotWhether the accountants fees are allowable in the respective years in which they were claimed by the applicantsquot This question hardly brings out the real controversy between the assessee and the department In our opinion on the facts set out in the preceding paragraphs the following question arises and though we frame it in relation to account year ended March 31 1950 it would hold good mutatis mutandis for the account years ended March 31 1951 March 31 1952 and March 31 1953 nbspnbspnbspnbspnbspnbspnbspnbspnbspnbspnbspnbspnbspnbspnbspnbsp quotWhether the sum of Rs 500 can be deducted in arriving at the total income of the previous year ended March 31 1950 when it was neither paid in that year nor any liability to pay it was incurred in that year though it related to professional services to be rendered at some future date after March 31 1950quot We refer the above question accordingly 6 Next the facts having bearing to the more important question viz liability to pay tax on the receipt of Rs 120000 for the assessment year 195354 The material facts are these As already stated HH Maharaja Sir Lukhdhirji Bahadur abdicated the Gadi of Morvi in favour of his son HH Mahendrasinhji on 21st January 1948 From a statement placed before the Tribunal at the time of hearing of the appeals it was found that a sum of Rs 10000 was being paid each month by the son Maharaja to the father Maharaja at some time during it from April 1949 onwards Occasionally where the payment could not be made each month the sum was paid in arrears The statement also showed instances where a sum of Rs 10000 was paid in advance The said statement also showed that a sum at the monthly rate of Rs 10000 was paid for the period April 1949 to October 1953 The Tribunal was assured on behalf of the assessee that no such payment was made for the period November 1953 to April 1954 though the department did not accept that position The Tribunal also found that since April 1954 the payments were being made on quarterly basis at the rate of Rs 30000 per quarter and such payments continued to be made between April 1954 to April 1957 and they ceased thereafter as HH Maharaja Sir Lukhdhirji Bahadur died on May 4 1957 Thus in the account year ended March 31 1953 the father Maharaja received a sum of Rs 120000 from the son Maharaja In response to certain enquiries made by the Incometax Officer in regard to the said monthly payment of Rs 10000 a letter dated January 16 1954 was addressed by JK Doshi amp Co chartered accountants to him a copy of which is marked annexure quotBquot and forms part of the case It stated as follows nbspnbspnbspnbspnbspnbspnbspnbspnbspnbspnbspnbspnbspnbsp quotMoreover amount of personal allowance of Rs 10000 per month allowed by HH Shri Mahendrasinhji to his father was always transferred from the above referred joint account to the personal account of Sir Lukhdhirjiquot The said firm of chartered accountants wrote another letter on June 27 1957 to the Incometax Officer copy of which is marked annexure quotCquot and forms part of the case It contains the following nbspnbspnbspnbspnbspnbspnbspnbspnbspnbspnbspnbspnbspnbsp quotIt may further be observed that on the abdication of His Highness Maharaja Sir Lukhdhirji Bahadur on January 21 1948 His Highness was being paid at Morvi Rs 10000 per month by way of Jiwaiquot It will be observed that while at one place the monthly sum of Rs 10000 has been described as Jiwai ie by way of maintenance allowance in another place it has been described as quotpersonal allowancequot 7 The contention raised before the Incometax Officer by Mr JK Doshi of Messrs JK DoshiampCo chartered accountants was that the said sum of Rs 120000 was not a taxable receipt The Incometax Officer disposed of this contention by observing as follows quotThe assessee has not shown Rs 120000 received by him from HH Shri Mahendrasinhji as annuity in the return of income The assessees accountant claims that it is Jiwai allowance of Rs 10000 per month received by the assessee from HH Shri Mahendrasinhji and is exempt from tax Shri JK Doshi accountant of the assessee has not put forward any specific grounds on which the exemption is claimed He stated that it is customary but there is nothing in the Indian Incometax Act 1922 which exempts a customary payment from tax It is for the assessee to prove that the exemption is available to him under the Incometax Act The assessee has failed to satisfy me regarding the claim for exemption Simply by stating that the Jiwai was fully exempt the assessee cannot get exemption In fact this allowance is received by him every month and it is in the nature of annuity taxable under the Actquot 8 Being aggrieved by the Incometax Officers inclusion of the said sum of Rs 120000 in the computation of the total income the assessee went in appeal to the Appellate Assistant Commissioner By that time Mr NA Palkhivala advocate came on the scene and appeared before him Mr Palkhivala contended before the Appellate Assistant Commissioner that the payments made to the father Maharaja by the son Maharaja were ex gratia payments made quotat the rate of Rs 10000 each monthquot that they were made quotwithout legal obligation and there is not even any customary bindingquot It will thus be seen that while the position taken by the accountant Shri JK Doshi before the Incometax Officer was that the sum of Rs 10000 was by way of maintenance allowance and that it was customary to make such allowance by the ruling chief to relations Mr Palkhivala took the position as described above and shifted the ground for exemption before the Appellate Assistant Commissioner In support of the claim for exclusion of the said sum Mr Palkhivala relied upon the Allahabad High Court decision in the case of Rani Amrit Kunwar 1946 14 ITR 561 In accepting his contention the Appellate Assistant Commissioner observed as follows quotIn view of the above decision and as there is not even any customary obligation for payment of the amount to the appellant by his son on the formers abdication in favour of the latter I agree with the learned representative that the amount cannot be taxed as incomequot 9 Being aggrieved by the decision of the Appellate Assistant Commissioner on the said point the department brought the matter in appeal to the Tribunal the contention raised before it being nbspnbspnbspnbspnbspnbspnbspnbspnbspnbspnbspnbspnbspnbspnbsp quotThe Appellate Assistant Commissioner erred in deleting a sum of Rs 120000 which was assessed by the Incometax Officer as jiwai in the hands of the assesseequot Before the Tribunal Mr Palkhivala counsel for the assessee took strong objection to the use of the words such as jiwai or quotannuityquot to describe the said sum of Rs 120000 though he added that the description would not hurt him The two contentions before it were i That the said sum of Rs 120000 did not represent any quotincomequot at all and ii that if at all it was quotincomequot received and falling within the ambit of the Incometax Act it was exempt under section 43vii on the ground that it was of a casual and nonrecurring nature 10 On the other hand the departments contention was that the monthly payment of Rs 10000 represented a customary payment made by the ruling chief to a relation of his for his maintenance that after the father Maharaja abdicated the Gadi in favour of the son Maharaja the position became reversed and the said jiwai allowance was being paid by the sonMaharaja to the father Maharaja Since the payment was being made in accordance with custom and usage that itself provided a source for the said sum for being an quotincomequot and that this being a periodic and customary payment it could not be considered as receipt of a casual and nonrecurring nature In support of these contentions the departmental representative strongly relied upon i Statement made by the assessees authorised representatives JK DoshiampCo in their letter of January 16 1954 annexure quotBquot ii Statement made by them in their letter of August 27 1957 annexure quotCquot iii The following note appearing in the return made for 194849 by HH Maharaja Shri Mahendrasinhji of Morvi when he was in receipt of a monthly payment of Rs 10000 from the then ruling chief HH Maharaja Sir Lukhdhirji Bahadur nbspnbspnbspnbspnbspnbspnbspnbspnbspnbspnbsp quotHis Highness who was a Yuvaraja up to January 21 1948 received a jiwai at Morvi of Rs 10000 per month which is not taxablequot For reasons given by the Tribunal in paragraphs 13 and 14 of its order in ITA No 4149 of 195960 annexure quotAquot the Tribunal rejected the contention of Mr Palkhivala and accepted those of the department At this stage it is necessary to make certain observations as to what happened before the Tribunal at the time of hearing As already stated the monthly sum of Rs 10000 was described as jiwai or quotpersonal allowancequot by JK DoshiampCo in their letters addressed to the Incometax Officer There was as a matter of fact no dispute whatever in regard to the nature of the said sum before him and this is abundantly clear from the extract reproduced above from the Incometax Officers assessment ordervide paragraph 7 above It was for the first time before the Appellate Assistant Commissioner that Mr Palkhivala shifted the ground as he did and as described above in regard to the nature of the said sum When the matter came before the Tribunal he bitterly complained that in its appeal to the Tribunal the department was putting forth a new factual case for the first time when it sought to assess the sum of Rs 120000 as customary payment made by the ruling chief to a relation of his for his maintenance The Tribunal did not accept this submission made by Mr Palkhivala that the department was taking a new position before the Tribunal for the first time and it was pointed out to him that there was really no dispute before the Incometax Officer in regard to the nature of the said sum which has been described on more than one occasion by the assessees authorised representatives JK DoshiampCo Here the assessee preferred to disown what was written by the said chartered accountants JK DoshiampCo in their letter of August 27 1947 annexure quotCquot by pointing out that the said accountants quothad no authority to represent the assessee because HH Maharaja Sir Lukhdhirji died on January 4 1957quot Hence without accepting Mr Palkhivalas contention that the department was trying to make out a new case altogether before the Tribunal in its own appeal a suggestion was thrown by the Bench that quotthe case might go back for investigation of factsquot Incidentally some other facts would have also been investigated viz the assurance given to the Tribunal by Mr Palkhivala that there was no monthly payment for the period November 1953 to April 1954 but Mr Palkhivala preferred to oppose the said suggestion quoton the ground that there were no more facts to be found and hence the remand was quite unnecessaryquot In these circumstances the Tribunal preferred to decide the contention on the material that was on record and before it and as already stated accepted the departments appeal 11 On these facts the assessee requires the Tribunal to refer the following two questions to the High Court for the assessment year 195354 nbspnbspnbspnbspnbspnbspnbspnbspnbspnbspnbspnbsp quoti Whether the amount of Rs 120000 stated to have been received by HH Lukhdhirji from HH Mahendrasinhji for the assessment year 195354 is at all liable to tax as income within the meaning of the Indian Incometax Act 1922 ii If the answer to question No 1 is in the affirmative whether the said amount is exempt from tax under section 43vii of the Actquot In our opinion the following questions arise nbspnbspnbspnbspnbspnbspnbspnbspnbspnbspnbspnbsp quot1 Whether the monthly sum of Rs 10000 received by HH Maharaja Sir Lukhdhirji Bahadur from HH Maharaja Mahendrasinhji during the year ended March 31 1953 is income for the purposes of the Indian Incometax Act 1922 and 2 If so whether the said receipt is of a casual and nonrecurring nature and as such exempt from tax under section 43viiquot We refer the above two questions accordingly for the assessment year 195354 12 The departmental representative had no suggestions to make Mr Palkhivala on behalf of the assessee wanted the questions as framed by the assessee himself to be referred to the High Court in the place of the question as framed by us We see no reason to accept this suggestion Mr Palkhivala also urges that certain factual statements made by us and inferences drawn by us are inconsistent with the proceedings before the lower authorities Probably what Mr Palkhivala wanted was certain amplifications of certain statements made by us We see no reason to make any further additions but at his request we are annexing the following documents collectively marked quotDquot 1 Copy of the assessment order made by the Incometax Officer on February 12 1958 for the assessment year 195354 2 Copy of the consolidated order No KAP 154 571 572amp573 made by the Appellate Assistant Commissioner on May 13 1959 3 Copy of grounds of appeal filed by the department in its appeal ITA No 3968 of 195960 4 Copy of statement showing payments made by HH Maharaja Mahendrasinhji to HH Maharaja Sir Lukhdhirji Bahadur 13 HH Sir Jiwaji Rao Scindia Maharaja of Gwalior one of the administrators with the will annexed of HH Sir Lukhdhirji died at Bombay on or about 16th July 1961 leaving HH Vijaykuverba Maharani of Morvi and Mr MP Dadachanji as such surviving administrators N A Palkhivala with B A Palkhivala for the assessee G N Joshi with R J Joshi for the Commissioner JUDGMENT The judgment of the court was delivered by VS DESAI JThe following three questions have been referred to us by the Incometax Appellate Tribunal in the present reference quot1 Whether the sum of Rs 500 can be deducted in arriving at the total income of the previous year ended March 31 1950 when it was neither paid in that year nor any liability to pay it was incurred in that year though it related to professional services to be rendered at some future date after March 31 1950 2 Whether the monthly sum of Rs 10000 received by HH Maharaja Sir Lukhdhirji Bahadur from HH Maharaja Mahendrasinhji during the year ended March 31 1953 is income for the purposes of the Indian Incometax Act 1922 and 3 If so whether the said receipt is of a casual and nonrecurring nature and as such exempt from tax under section 43viiquot The questions arise out of the order passed by the Tribunal relating to the assessment of the assessee for the assessment years 195051 to 195354 Although in question No 1 the dates mentioned are with reference to the first assessment year viz 195051 the same question arises in the remaining three years also Question No 1 therefore is common to all the assessment years Questions Nos 2 and 3 only relate to the assessment year 195354 The learned counsel appearing for the assessee has stated before us that the assessee does not want to press question No 1 and the said question therefore need not be answered We will accordingly not answer question No 1 The facts necessary to be stated in connection with questions Nos 2 and 3 are as follows The original assessee HH Maharaja Lukhdhirji Bahadur of Morvi who has since died on the 4th of May 1957 and is now represented by the surviving administrators of his estate was the ruler of the erstwhile Indian State of Morvi On the 21st of January 1948 he abdicated the gadi in favour of his son HH Maharaja Mahendrasinhji From 1st of April 1949 a sum of Rs 10000 was being paid each month by the son Maharaja to the assessee This monthly payment admittedly continued to be paid from April 1949 to October 1953 and from April 1954 to April 1957 According to the assessee for the interval between November 1953 to April 1954 such payment was not made but that statement of the assessee was not accepted by the Tribunal It will thus be seen that a monthly payment of Rs 10000 continued to be made by the son Maharaja to the father Maharaja from April 1949 until the father Maharaja died on the 4th of May 1957 In the assessment year 195354 the Incometax Officer brought to tax the sum of Rs 120000 in respect of the said payment which the assessee had received during that year In reply to the inquiries which the Income tax Officer had made during the said assessment proceedings the chartered accountants under instructions from the assessee had referred to the said payment as an amount of personal allowance of Rs 10000 allowed to HH Maharaja Lukhdhirji by his son HH Maharaja Mahendrasinhji and in another letter which they had sent on the 27th of June 1957 they had stated that on the abdication of His Highness the Maharaja Lukhdhirji Bahadur on January 21 1948 His Highness was being paid at Morvi Rs 10000 per month by way of jiwai It was contended before the Income tax Officer that the amount was exempted from tax being in the nature of jiwai or maintenance allowance This contention however was not accepted by the Incometax Officer who took the view that the payment was in the nature of an annuity which was taxable under the Act In the appeal before the Appellate Assistant Commissioner it was contended on behalf of the assessee that the jiwai allowance received by the assessee was an ex gratia payment made to him by his son without there being any legal obligation on him to make the said payment or in the absence of any legal custom binding on him It was therefore not quotincomequot at all and hence not taxable The Appellate Assistant Commissioner held that the payment made by the son Maharaja to the father Maharaja in the present case was not under any contractual or other legally binding obligation nor could it be said to be in consideration of the father having abdicated the gadi in favour of his son According to him therefore the amount of the payments was not income which was taxable under the India Income tax Act He accordingly accepted the contention of the assessee and modified the order passed by the Incometax Officer to that extent Against this part of the Appellate Assistant Commissioners order the department appealed to the Appellate Tribunal Before the Tribunal the argument advanced by the assessee was twofold It was contended in the first place that the payment was not quotincomequot under the Indian Incometax Act and secondly if it was income at all it was exempt under section 43vii being of a casual and nonrecurring nature It was contended on the other hand by the department that the monthly payment of Rs 10000 made by the son Maharaja to the father Maharaja represented a customary payment made by the ruling chief to a relation of his for maintenance and therefore constituted quotincomequot under the Indian Incometax Act as being income from a definite source It was further urged that since the payment was being made periodically over a long period of time it could not be regarded as casual or nonrecurring The Appellate Tribunal accepted the contentions put forward on behalf of the department and allowed the appeal filed by the department It has then drawn up a statement of the case and referred to this court the two questions relating to this part of its order which we have already stated Mr Palkhivala the learned counsel appearing for the assessee has urged that on the facts found in the present case the payment made to the assessee by his son Maharaja could not be said to be the assessees income from any source It was found by the Appellate Assistant Commissioner that the payment was not made in pursuance of any contractual or other legally binding obligation it was also not in consideration of the abdication of the gadi by the father Maharaja in favour of his son and the payment therefore was a purely ex gratia payment made by the son to his father as by way of allowance Mr Palkhivala complains that the Tribunal has erred in taking the view that the payment was made in accordance with the custom and usage and the custom and usage therefore provided the source for the said payment and thus constituted it the income of the assessee According to him there was no material whatsoever before the Tribunal for the said conclusion and the three pieces of evidence on which it sought to rely in that connection do not supply any such evidence Now the said three pieces of evidence are the two statements of the chartered accountants in the letters which they had written to the Incometax Officer in reply to his enquiries to which we have already made reference earlier In one of them they referred to the payment as the personal allowance given by the son Maharaja to the father Maharaja and in the other they referred to it as a jiwai allowance The third piece of evidence was a note appearing in the son Maharajas return for the assessment year 194849 in which in referring to a similar allowance of Rs 10000 which the father Maharaja before his abdication was paying to his son the son had stated that he was receiving it as jiwai allowance Mr Palkhivala says that the fact that a payment is being made by way of jiwai allowance or a personal allowance does not constitute it a payment made under either a contractual or legal obligation unless the right to such allowance is possessed or acquired by the person to whom the allowance is made under a legal or contractual provision or under a custom or usage having the force of law There is no evidence whatsoever of any such legal or contractual obligation nor is there any evidence of any such custom or usage The circumstance that a father was paying a similar allowance to the son by way of allowance will not constitute any evidence of a custom that a son on succeeding to the gadi on the abdication of the gadi by the father is required to make such an allowance in favour of his father Mr Palkhivala points out that in the history of Morvi the present abdication was the only abdication that had taken place and therefore there could be no possibility of any custom or usage being established under which a father Maharaja on an abdication of the gadi will be entitled to receive a jiwai or personal allowance from the son succeeding to the gadi According to Mr Palkhivala therefore the payment in the present case could not be said to be customary at all in the sense of being made in pursuance of a legally binding custom It can at the most be customary in the sense of habitual and a habitual payment without there being any right in the person to whom the payment is made to enforce the said payment if not made cannot be anything but an ex gratia or voluntary payment The payment in the present case therefore is a purely voluntary payment The payment moreover is in no way connected with the office profession or vocation of the person to whom the payment is made Such a payment Mr Palkhivala argues is a payment which does not proceed from any definite source and cannot therefore qualify to be quotincomequot under the Indian Incometax Act Mr Palkhivalas further argument is that at any rate even if it is held to be quotincomequot it would be an income of a casual and nonrecurring nature Now there can be no doubt that the payments made by the son Maharaja to the father Maharaja in the present case were voluntary payments in the sense that if the payment were discontinued there would have been no right in the father Maharaja to have them enforced against the son Further there was no contractual or other legal obligation in pursuance of which the payments were made The Tribunal has no doubt taken the view that they could be regarded as having been made in accordance with a custom or usage requiring the ruling chief to make a maintenance allowance to a relation There is however no evidence whatsoever of such a custom or usage which could be said to have a binding force The said inference is drawn by the Tribunal because the payment has been referred to as a jiwai allowance by the accountants in their letter under instructions from the Maharaja and because it appeared that the son Maharaja was in receipt of a jiwai allowance from his father while the father was the ruler Now neither of these facts can in our opinion be sufficient to warrant a legal inference that there was a custom or usage having the force of law requiring such payments to be made The mere circumstance that an allowance was paid by the father to his son without anything more would not suffice to draw an inference that the allowance was paid under the obligation of a binding custom or usage Nor could the circumstance be sufficient to hold in favour of a custom requiring the ruling chief to make a maintenance allowance in favour of any relation of his It must also be noted that what militates against such an inference is the fact that on the material on the record in the present case while the abdication took place in January 1948 the payment of allowance started more than a year later from April 1949 If the payment was in pursuance of a legally binding obligation whether arising from contract or from a custom or usage having the force of law the payment would have started immediately after the abdication and would not have been postponed till a year thereafter There is no evidence also to connect the said payment with the abdication of the gadi in any way excepting the bare fact that the payment has come to be made some time after the abdication In these circumstances it must be held that the payment is wholly voluntary The only features of the payment which may have to be considered are that the payments have been made to a person who had held the gadi that the payments have been made subsequent to his having relinquished the gadi in favour of his son and that the payments have been made over fairly a long period right up to the death of the payee with almost an unbroken regularity What has got to be considered is whether the voluntary payments made in such circumstances would constitute the income of the payee There is no doubt that under the Indian Incometax Act even payments which are voluntarily made may constitute quotincomequot of the person receiving them It is not necessary that in order that the payments may constitute quotincomequot they must proceed from a legal source in that if the payments are not made the enforcement of the payments could be sought by the payee in a court of law It does not however mean that every voluntary payment will constitute quotincomequot Thus voluntary and gratuitous payments which are connected with the office profession vocation or occupation may constitute quotincomequot although if the payments were not made the enforcement thereof cannot be insisted upon These payments constitute quotincomequot because they are referable to a definite source which is the office profession vocation or occupation It could therefore be said that such a voluntary payment is taxable as having an origin in the office profession or vocation of the payee which constitutes a definite source for the income What is taxed under the Indian Incometax Act is income from every source barring the exceptions provided in the Act itself and even a voluntary payment which can be regarded as having an origin which a practical man can regard as a real source of income will fall in the category of quotincomequot which is taxable under the Act Where however a voluntary payment is made entirely without consideration and is not traceable to any source which a practical man may regard as a real source of his income but depends entirely on the whim of the donor cannot fall in the category of quotincomequot What we have to see therefore in the present case is whether the payment made by the son Maharaja to the father Maharaja though voluntary could be regarded as having an origin in what might be called the real source of income On the facts found in the present case we cannot say that the payments would be referable to any such source The department has not been able to show any material on record from which such a conclusion can be drawn Mr Joshi learned counsel for the revenue has argued that the course could be inferred from the fact that the payment was made to a person who held the position of an exMaharaja and it was in pursuance of the position occupied by him that the payment was made The other fact which may indicate the source is that the payment has been made to a person who has renounced the gadi in favour of the son and has thus accelerated his succession to the gadi It may therefore be said that the payment has been made in consideration of the said circumstance which constitutes the source of the income We are afraid we cannot accept these submissions of Mr Joshi in the absence of any further material placed before us The position of the exMaharaja would not be regarded as an office held by him for which the payment has been made As we have already pointed out the payment had started a considerable time after the abdication ie a considerable time after the said position came to be occupied by the son Maharaja Again there being no evidence of any connection between the abdication of the gadi and the subsequent payment made to the father Maharaja it is not possible to say that the said circumstance also affords any foundation for the source of income It may be that these circumstances may have been either partly or wholly responsible for the desire to arise in the mind of the son Maharaja to make an allowance for his father but even assuming that it served as a motive for the payment it would not suffice to make the payment anything but a purely voluntary payment depending upon the whim of the donor Mr Joshi has also pointed out that the reference to the allowance as jiwai itself connotes an allowance for maintenance and it is the obligation of the ruling chief to maintain his relations The said obligation therefore provides the source of the income Mr Palkhivala has pointed out that although the allowance has been referred to as jiwai it could not be regarded as an allowance for maintenance in the sense of money required for the maintenance of the father because the father was possessed of a large fortune himself and his yearly income which was assessable to tax even apart from this payment was in the neighbourhood of Rs 5 lakhs The allowance therefore could not be said to have been proceeding from the obligation of a ruling chief to maintain his relations or dependants In our opinion therefore the payments made by the son Maharaja to the father Maharaja in the present case could not be said to be payments which constituted income under the Indian Incometax Act The view that we are taking is supported by the decision of the Full Bench of the Allahabad High Court in Rani Amrit Kunwar v Commissioner of Incometax 1946 14 ITR 561 In that case the question arose whether the annual wardrobe allowance which the assessee was receiving from her brother the Maharaja of Nabha State out of the State budget constituted her income under the Indian Incometax Act There was no contractual or other legal obligation under which the payments were made and there was also no evidence in the case to show that the payments were attributable to any custom usage or traditional obligation It was held on these facts that there was no origin for the payments which could amount in its nature to a definite source so as to render each payment quotincomequot and not merely a casual or annual income and hence the payments were not income and were not assessable to incometax In our opinion there is hardly any distinction between the said case and the case before us In that case also the payments were made by a Maharaja to a person who stood in the relationship of a sister to him The payments were made regularly every year as wardrobe allowance on two festive occasions It was held that in the absence of any further evidence which would show some more sanction to those payments they were merely the result of the bounty of the ruler and therefore could not be said to have their origin in a definite source which the assessee could regard as a real source of income In our opinion therefore the payments of Rs 120000 with which we are concerned in the present case could not be said to be the income of the assessee In the view that we are taking the next question viz whether if it was income it was exempt from tax under section 43vii as being of a casual and nonrecurring nature does not fall to be considered Mr Palkhivala has urged that it would be so exempt under section 43vii He has argued that the payment is of a casual nature because it depends upon the sweet will of the donor and if not paid to him could not be enforced against him He has further argued that the payment is also nonrecurring in the right sense of the term and the mere circumstance that it has been paid at regular intervals does not make it cease to be a nonrecurring payment According to him a nonrecurring payment is one for the recurrence of which the payee has no right to expect In the present case the payee could have had no right to expect the recurrence because there was no obligation whatsoever on the part of the payer to make the same The payee would get it if it was paid and may perhaps hope for it but he would have no right to expect that the payment will necessarily be made or that he will necessarily get it Mr Joshi on the other hand has argued that when it is said that a payment is voluntary there could possibly be no right in the payee either to get it or even to expect it Since even a voluntary payment can be one which is not casual or nonrecurring the test for determining whether a payment is nonrecurring or not in the case of a voluntary payment cannot be said to be whether the payee has a right to expect it or not because if the payee has a right to expect it it would cease to be a voluntary payment We do not propose to go into a detailed discussion of the submissions urged before us though prima facie we are inclined to agree with the view put forward by Mr Palkhivala because it is not necessary to answer the said question in view of our answer to the earlier question In the result therefore question No 1 is not answered because it is not pressed Our answer to question No 2 is in the negative and in view of our answer to question No 2 question No 3 need not be answered Assessee will be entitled to get threefourths of the costs from the department No order on the notice of motion Question No 2 answered in the negative nbsp