TMI Blog1961 (7) TMI 4X X X X Extracts X X X X X X X X Extracts X X X X ..... urden of proof somewhat strictly upon the assessee. The Tribunal, though it gave no reasons, hold that the expenses were incurred in relation to the management. The conclusion is based on some evidence. These expenses fall within clause (a) of section 14(5) as expenditure in connection with land or its administration, and they amounted to ₹ 26,057 in the year 1358 Fasli. For the year. 1357 Fasli, the amount debatable to these items from ₹ 14,390 will have to be determined. The evidence before us is not sufficient to state the exact amount. In favour of assessee. Appeal partly allowed. - - - - - Dated:- 17-7-1961 - Judge(s) : S. K. DAS., M. HIDAYATULLAH., J. C. SHAH JUDGMENT The judgment of the court was delivered by HIDAYATULLAH J.---The appellant, Raja S. V. Jagannath Rao, was the Jagirdar of Jatprole Samasthan in the former Hyderabad State. In the year 1357 Fasli, the Income-tax Act (1357 Fasli) was passed by the legislature, to come into force on Azur 1, 1357 Fasli. The present appeals, with special leave, concern the assessment of the appellant's income to income-tax and super-tax under the Act of 1357 Fasli for the assessment years, 1357 Fasli and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llant on the validity of the Act is this : The Act was passed by the Hyderabad Legislative Assembly and was assented to by His Exalted Highness, the Nizam. Under the Hyderabad Legislative Assembly Ain, there was a prohibition on the introduction of certain kinds of bills in the Assembly. The appellant relies upon sub-sections (8) and (9) of section 18 of the Ain, which in their English translation read as follows : " 18. There shall not be introduced into, or moved in the Assembly, any bill, or motion, or resolution, or question, or other proceedings relating to or affecting the following matter : (8) The relations of His Exalted Highness with the holders of samasthans and Jagirdars and with such other grantees as derive grants from sanads. (9) The powers of His Exalted Highness over the present or future grants, whether they be in the form of land or cash." These two sub-sections deal with laws affecting the relations between the holders of Samasthans and Jagirs on the one hand, and His Exalted Highness, the Nizam, on the other. The Act in question imposes a tax and does not seek to affect the relations aforesaid. It is a little difficult to read into the Income-tax Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... really commands embodying rules of conduct emanating from one whose will is sovereign, or, in other words, supreme. Legislative sovereignty must be found to uphold the laws. It depends upon the Constitution of a particular State, where it resides. It may not reside in a Ruler but in a legislature, where the Ruler has surrendered or been made to surrender his powers, as, for example, the King in Parliament in England, or it may reside in an absolute and sovereign Ruler, who has not parted with it, the legislature being merely his amanuensis. In the latter case, the will of the Ruler expressed as a rule of conduct is the law, whether made by him directly or through his legislature. The Ain itself derived its authority from the Nizam only, and the Nizam, as the supreme legislator, could frame a law in derogation of the Ain, which was his own creation. The Ain was not a supreme law such as a Constitution, the limits imposed by which could not be exceeded even by the Nizam. The Ain prohibited the introduction of laws of a particular kind in the Assembly, and the Nizam could reject them as being in contravention of the Ain even if passed by the Assembly. The position, however, was not th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tions of money so spent professedly unless there be orders in exercise of prerogative powers of the grantor authorising such expenditures. For example, he may be authorised by the sanad creating his tenure to maintain elephants or bodyguards. These expenditure would then, though personal, be necessary and legal, because of the constitutional position of the grantor when the tenure was created and continued. But the statement of the case should show the legal basis upon which deductions are allowed. If the assessee was entitled to maintain elephants, stables, paraphernalia, etc., under the grants, he should have filed them before the income-tax authorities. Evidently this has not been done ; at any rate there is no mention of the fact in the statement of the case. In the result, the answer to the question is in the negative." The relevant provisions of the law may now be read. Section 14(5) as translated by Messrs. Ramchandra Rao Kurtadikar and B. V. Subbarayudu reads as follows: "In respect of income from land-revenue paid to the Jagirdar by the holder of any non-Khalsa land in lieu of the use or possession thereof and in respect of any income derived by giving over Abkari tr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ate or personal. In our opinion, the High Court put the burden of proof somewhat strictly upon the assessee. The Tribunal, though it gave no reasons, hold that the expenses were incurred in relation to the management. The conclusion is based on some evidence. The maintenance of elephants, stables, bodyguards, etc., is not entirely for the jagirdar's personal or private ends, and cannot be said to be wholly unrelated to the management of the estate. Such equipage is considered part and parcel of the administration of an estate, such as a jagir. Elephants, drummers and bodyguards are used on occasions for administrative purposes, and even if these might be few and far between, the expenditure must be regarded as one incurred in connection with land and its administration. The expenses over drummers (but not over domestic servants) in the first year, and over stables, elephants and bodyguards (but, not over festivals and jatras or on charities and subscriptions) in the second year, were deductible. These expenses fall within clause (a) of section 14(5) as expenditure in connection with land or its administration, and they amounted to Rs. 26,057 in the year 1358 Fasli. For the year. 13 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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