January 2025

In this landmark 1937 judgment, the Lahore High Court established crucial principles for taxing maintenance allowances from impartible estates. The Court allowed exemption for Rs. 6,000 received annually by Kunwar Kartar Singh from his brother’s jagir, ruling it constituted agricultural income under Section 4(3)(viii) as it was a direct apportionment of the revenue assignment mandated by the Government. However, the Court dismissed the alternative claim under Section 14(1), holding the allowance wasn’t received as a HUF member but as a statutory beneficiary under the Descent of Jagirs Act. The judgment clarifies that exemptions depend on the allowance’s source character rather than mere familial relationships, setting precedent for distinguishing between agricultural income derivations and HUF receipts.