RAJAH S. V. JAGANNATH RAO versus COMMISSIONER OF INCOME-TAX, HYDERABAD

Citation: [1962] 2 S.C.R. 848 · Decided: 17-07-1961 · Supreme Court of India · Bench: S.K. DAS · Disposal: Case Partly allowed

Judgment (excerpt)

1961 
July, 17 
84.8 
SUPREME COlJRT REPORTS 
(1962) 
RAJAHS. V. JAGANNATH RAO 
v. 
COMMISSIONER OF INCOME-TAX, HYDERABAD 
(S. K. DA.s, M. HIDAYATULLAH- and J. C. SHAH, JJ.) 
Income Tax-Levy of tax onJagirs-Jagil'dar in erstu:hile 
Hyderabad State-,-Validity of enactment- Retrospective effect-
Olaim for deduction of expenses of maintenance of elephants and 
bodyguards-Hyderabad Income-tax Act, 1357 Fasli; s. 14(5)(a). 
The appellant who was a Jagirdar in the former· 
Hyderabad State wfs assessed, to income-tax.and super-tax for 
the assessment years, 1357 Fasli and 1358 Fasli, corresponding 
to the years, J 948-49 and J 949-50, under the provisions of the 
Hyderabad Income-tax Act, 1357 Fasli, which \Vas passed by 
the Hyderabad Legislative'Assembly and came into force on 
Azur 1,1357 Fasli. The appellant challenged tire validity of 
the assessment on the grounds ( J) that under the Hyderabad 
.Legislative Assembly Ain the Assembly was prohibited fro!" 
introducing bills which dealt with laws affecting ihe relations 
between the holders of Jagirs on the one hand and the Nizam 
on the other, that the provisions of the Act in so far as they 
"'seemed. to leVy a tax on Jagirs amounted to an enroacliment 
µpon the relations between theJagirdars and the ~izam, and 
that the bill introduced in 1;ontravention of the Ain was, v..oid 
ab initio, even though it had' been assented 'to by the Nizam, 
(2)that the Act could not aff~ct, in any case, the income for the 
account year 1356 Fasli, corresponding to the-assessmtnt year 
1357 Fasli, because the Act came into force 
only. 'from 
Aur 1,1357 Fasli, and (3) that the Income-tax Officer erred in 
disallowing the daim for deduction of the amount spent on 
acco.unt of maintenance of elephants, •stables1 drummers, 
bodyguards, etc., in conitection with management of the Jagir 
Estate, and in treating the amoun~ ·as personal expenditure. 
Held, (I) that the Hyderaba<! Income·tax Act, 
1357 
Fasli, did not affect the relations between the holders of Jagirs 
and the Nizam, and that even if it could be said to affect 
indirectly these relations, the Aet having been passed with the 
assent of the Nizam, was valid, and the question whether it 
could be introduced in the.Legislative Assembly did not arise 
as 
it'~ must be regarded as a law emanating from the Nizam1 
inc supreme legislator in the State, whose laws promulgated 
in any manner were binding upon the subject. 
. 
. 
T 
849 
2 S.C.R. SUPREME COURT REPOR S 
Ameer-un-Nissa Begam v. Mahboob Begum, A. I. R; 1955 
S. C. 352, Director of Endowments, Government of Hyderabad 
v. Akram Ali, A. I. R. 1956 S. C. 60 and Madhaorao [Y· 
State of Madhya Bharat, (1961) I S. C.R. 957, applied. 
. 
(2) that the income for the 1356 Fasli was rightly assessed 
under the provisions of the Act for the assessment year 1357 
Fasli. 
Union of India v. Madan Gopal Kabra, (1954) S. C.R. 
541 and Rajputana Mining Agencies Ltd. v. The Union of India, 
(1961) I S. C. R. 453, followed. 
(3) that the maintenance of elephants, stabies, drummers, 
and bodyguards by the Jagirdar was not entirely for his 
personal or private ends but must be con•idered part and parcel 
of the administration of the estate, and the expenditure for 
such maintenance must be regarded as one incurred in connec"'. 
tion with land and its administration within the meaning of 
s. 14(5)(a) of the Act. it was accordingly deductible for 
purposes of income-tax. 
CIVIL APPELLATE JURISDICTION: Civil Appeals 
Nos. 1661-68 of 1959. 
Appeals by special leave from the judgment 
and decree dated April 15, 1955, of the former 
Hyderabad (now Andhra Pradesh) High Court in 
Reference Nos. 198 and 199 of 1953 aljd 19 of 1954. 
A. V. Viswanatha Sastri and K. R. Choudhri, 
for the appellant. 
· 
K. 'iv. Rajagopal Sastri and D. Gupta, for the 
respondent. 
1961. July 17. The Judgment of. the Court 
was delivered by 
1961. -
Rajah S.V. 
JtJgannaih RM 
v 
(!,ymmissibiiir oj 
I namie-tax, 
Hyderabad 
HIDAYATULLAH, J.-The appellant, 
Rajah 
JJidayaiulla~ J; 
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 l, 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 1358 Fasli, corresponditig to 
1961 

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