http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 1 of 12
PETITIONER: MAHESH ANANTRAI PATTANI AND ANOTHER
Vs.
RESPONDENT: THE COMMISSIONER OF INCOME-TAX, BOMBAY NORTH, AHMEDABAD
DATE OF JUDGMENT: 29/11/1960
BENCH: KAPUR, J.L. BENCH: KAPUR, J.L. HIDAYATULLAH, M. SHAH, J.C.
CITATION: 1961 AIR 946 1961 SCR (2) 742 CITATOR INFO : R 1963 SC1343 (13,37,38)
ACT: Income tax-Gift or Remuneration for Past services--Payment to retired Dewan of Indian State by Ex-Ruler--Liability to tax--Indian Income-tax Act, 1922 (11 of 1922), s.7(1), Explanation (2).
HEADNOTE: A who was the Dewan of the State of Bhavnagar before responsible government was introduced in the State, was granted a monthly pension of Rs. 2,000 by the Maharaja of the State by an order dated January 15, 1948. On March 1, 1948 the State of Bhavnagar was merged in the United States of Saurashtra and the Maharajah ceased to be the Ruler of the State. Subsequently on May 31, 1950, the Maharaja directed his banker in Bombay to pay A a sum of Rs. 5 lakhs out of the amount lying to his credit and when he was asked for instructions as to how that sum was to be entered in the books of account he passed an order on December 27, 1950, to the effect that in consideration of A having rendered loyal and meritorious services the said sum was given to him as a gift and that the amount should be debited to his personal expense account. The liability of the...