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1927 Supreme(Nagpur) 241
HIGH COURT OF NAGPUR
COMMISSIONER OF INCOME TAX – Appellant
Versus
MOHOMAD NURULLA KHAN – Respondent
Decided on : 08-12-1927
The historical context and distribution of territories are deemed irrelevant to the taxability of income under the Income Tax Act.
Headnote:
Income Tax Act - Taxability of Rents from Villages - The court held that the rents realized from the villages situated in the Nizam's territory and brought into Berar are taxable under the Income Tax Act, despite the historical context of the villages being part of a jagir granted revenue-free to the ancestors of Nawab Mohammad Salamullah Khan.
Fact of the Case:
The question of taxability of rents from villages situated in the Nizam's territory and brought into Berar was referred to the court. The historical context of the villages being part of a jagir granted revenue-free to the ancestors of Nawab Mohammad Salamullah Khan was considered.
Finding of the Court:
The court found that the income derived from the villages and brought into Berar is taxable under the Income Tax Act, regardless of the historical distribution of territories and the revenue-free grant of the jagir.
Issues: The issue was whether the rents realized from the villages situated in the Nizam's territory and brought into Berar are taxable under the Income Tax Act, considering the historical context of the villages being part of a jagir granted revenue-free to the ancestors of Nawab Mohammad Salamullah Khan.
Ratio Decidendi: The court's decision was influenced by the fact that the historical context and distribution of territories were deemed irrelevant to the question of taxability under the Income Tax Act.
Final Decision: The income derived from the villages situated in the Nizam's territory and brought into Berar is held to be taxable under the Income Tax Act.
1. The question of law referred by the Commissioner of Income Tax is stated as follows:
Whether the rents realized from the tenants of Kosgaon and Dhotra villages, situate in the Dominions of His Exalted Highness the Nizam and brought into Dewalghat in Berar are taxable under the Income Tax Act, in view of the fact that these villages form part of one single jagir consisting of four ;villages which jagir was granted revenue free to the ancestors of Nawab Mohammad Salamullah Khan, Khan Bahadur, C.I.E., and in view of fact that owing to distribution of territories, two of them, i.e., Kosgaon and Dhotra, hap. pened to go to the Nizam's territory.
2. The last phrase is an incorrect statement of fact, as the two villages did not happen to go to the Nizam's territory, but happened to stay there, while the other two happened to go to Berar. But neither that nor any of the other facts stated has anything to do with the question of the exemption from Income Tax of the income derived from the villages and brought into Berar, nor has any other fact or consideration been stated which can be regarded as even relevant to it. The answer is that the income in question is taxable under the Income Tax Act.
