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TMI Blog1971 (12) TMI 25X X X X Extracts X X X X X X X X Extracts X X X X ..... l in respect of income from property, interest from bank and other sources. It appears that the relations between her and her husband were not cordial and resulted in frequent quarrels. The husband and the wife in order to avoid deterioration of their relations agreed to live apart and an agreement for separation was executed between the parties on the 16th day of September, 1954. Under clause (1) of that agreement, the assessee was given the option to live separate from her husband free from marital control and authority of the husband. Clause (2) there of contained an agreement that neither the wife nor the husband shall molest or interfere with the other or bring a suit for the restitution of conjugal rights against the other. Clause (4) of the deed insured payment of an amount of Rs. 2,000 per month to the assessee for maintenance of herself and her two children till the assessee did not remarry and continued to perform the other terms and conditions of the deed. The parties consented to the appointment of an arbitrator in respect of any dispute between the parties, and made the award binding on them. The assessee received various amounts from her husband as maintenance during ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the mere fact that the assessee received the entire amount, it could be taxed in its entirety in her hands. The amount representing the maintenance of her two sons was held in trust by her for the maintenance of her two children. It was impressed with an obligation to defray the maintenance charges of her two minor children and as such the mere act of receiving the money on behalf of her two children could not make the entire amount taxable in her hands. We are accordingly of the view that the entire amount received by the assessee as maintenance was not taxable solely in her hands. The first question is of some complexity. The assessee along with her two children had started living separately from her husband. The situation on the recitals contained in the deed was brought about on account of unhappy relations between the parties resulting in frequent quarrels. The deed of separation was executed in order to prevent further deterioration in relations between the parties. Not only did it have the result of permitting the wife to live apart, but denied the husband access to the wife and also prevented him from filing a suit for restitution of conjugal rights. The wife as a resul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l safety that she is entitled to separate residence and maintenance (Mulla on Hindu Law, 13th edition, article 555). This was the established rule of Hindu law till the enactment of the Hindu Married Women's Right to Separate Maintenance & Residence Act, 1946 (Act XIX of 1946), which came into force on 23rd April, 1946. Section 2 of that Act sets out certain grounds on which a married Hindu woman was entitled to separate residence and maintenance from her husband. Clauses (i) to (vi) of section 2 do not cover the case of the present kind. Clause (vii) justifies a claim for separate maintenance and residence "for any other justifiable cause". This clause, however, in our opinion does not entitle the wife to maintenance on the mere ground of incompatibility of temper or frequent quarrels. No authority has been cited to support a right of separate residence and maintenance on such a ground alone. Apart from this, the agreement brings to an end all marital rights which a husband can exercise in relation to his wife. Such an agreement, to our mind is opposed to the basic tenets of Hindu law relating to marriages. That being so, it can be said that the agreement in question is opposed t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s then urged that the principle laid down in the Calcutta case should not be applied to the present case, inasmuch as the agreement in the Calcutta case was a pre-nuptial agreement. In the present case, although the agreement has been entered into by the parties after their marriage this by itself is not sufficient to dissuade us from applying the principle laid down in the Calcutta case. Apart from the Calcutta case, it has already been seen that the agreement entered into between the parties is not in consonance with any rule of Hindu law, or sanctioned by any statute, and that it is opposed to public policy, and as such hit by section 23 of the Contract Act. The Madras case dealt specifically with an agreement between the husband and the wife for separate residence and had been entered into after their marriage and even then the agreement was held to be void. At this stage, it would be useful to refer to cases cited on behalf of the parties relating to maintenance allowance. In Raja Rameshwar Rao v. Commissioner of Income-tax, interim maintenance allowance was received by the assessee under the Hyderabad Abolition of Jagir Regulation. This was held to be income and not a mere wi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of Rs. 10,000 was directed to be paid together with all arrears. The assessee claimed that the amount received was in the nature of a gift, and not taxable. It was found that the payment of dowry in the shape of an annual allowance to married daughters and sisters was based on a well established custom of the Jind ruling family, and that it was in view of this custom that the allowance was continued by the Government of India. The Punjab High Court held that inasmuch as the payments were made on the basis of an established custom, the amount received by the assessee constituted her income. In that case, it was sought to be urged that inasmuch as the assessee could not bring a suit for recovery of the amount in question against the Government of India, the amounts should not be treated as her income. The Punjab High Court declined to go into that question, and took the view that inasmuch as the payments were being made by the Government on the acceptance of the position that the custom was of a binding nature, the amounts could be said to have been received by the assessee on the ground that such a custom had been accepted, and, therefore, constituted the income of the assessee. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the amount received must have its origin either in a business activity, an investment or an enforceable obligation. Considering the matter further, he opined on page 574 of the report as below : "But there seems to me to be another class of cases altogether in which in particular circumstances payments may be made by one person to another which can only be explained on the ground that the giver intends to give, and the recipient expects to receive, with regularity or expected regularity and from a source the nature of which is to produce such a payment, an 'income' which is in the income-tax sense his own. I can find nothing in the Indian Income-tax Act to warrant any general conclusion that it is only in a case in which, if the payment is discontinued, the recipient will have an immediate right of action against the payer, that it will be income in his hands in the Indian income-tax sense. That is to put too limited a construction on the word 'income'." Malik J. agreed with the answers given by Braund J. to the questions referred, although he did not go into the question as to whether amounts received were the income of the Rani for he took the view that even if they were her i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ss could not be liable to tax. That income realised from illegal business is taxable as any other income is well-settled and reference in this context may be made to the case of Minister of Finance v. Smith. Thus, we are of the view that inasmuch as the assessee herself has traced the origin of the payment to the agreement, it cannot be said that the agreement did not constitute the source of the receipt. Even if such a source existed, could the receipt be termed as the income of the assessee? The word "income" as used in the Income-tax Act has often been characterised by judicial decisions as formidably wide and vague in its scope. It is a word of elastic import and its extent is not controlled and is not governed by the words "profits and gains" in section 10 of the Act. Every receipt generally may be described as income unless it is expressly exempt. Dooars Tea Co. Ltd. v. Commissioner of Agricultural Income-tax is a case on the point. In coming to this conclusion, their Lordships have referred to the decision of Sir George Lowndes J. in the case of Commissioner of Income-tax v. Shaw Wallace & Co. and Maharajkumar Gopal Saran Narain Singh v. Commissioner of Income-tax. We are o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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