B.S. Dhillon, J.
1. The assessee is a Hindu undivided family (hereinafter referred to as 'the HUF'). The relevant previous year ended on 31st March, 1967. The case relates to the assessment year 1967-68. The sources of income of the assessee were from house property, capital gains and there was also 'income from other sources'. The assessment was completed on 15th March, 1972, on a total income of Rs. 36,430 as against the returned income of Rs. 16,433. The Nawab of Malerkotla transferred in favour of Shri Sewal Singh a piece of land measuring 12 kanals and 3 marlas stating its value to be Rs. 16,000. In respect of the aforesaid land, the ITO fixed its value at Rs. 20,000 and included the same as the assessee-HUF's income holding that the said land had been conveyed by the Nawab in token of the service rendered by Shri Sewal Singh in his capacity as a general attorney to the Nawab for the purpose of selling the lands belonging to the Nawab;
2. In appeal, filed before the AAC, the assessee-HUF raised the plea that the land in question had been gifted to the assessee-HUF by the Nawab in token of his love and affection. The learned AAC accepted the assessee's appeal.
3. Being aggrieved, the revenue went in appeal to the Income-tax Appellate Tribunal, Chandigarh Bench (hereinafter referred to as the 'Tribunal'). The Tribunal observed that if the assessee had not been appointed as general attorney and worked to the entire satisfaction of the Nawab, the question of gift would never have arisen and held that theso-called gift was primarily a payment in lieu of the services rendered by the assessee to the Nawab as his general attorney. As a result, the amount, of Rs. 20,000 was found to be taxable income of the assessee-HUF. The Tribunal refused to consider the contention raised on behalf of the assessee that the land in question was gifted to Shri Sewal Singh in his individual capacity and the value of the land gifted could not be taken to be income in the hands of the HUF on the ground that this plea was not raised before the authorities below.
4. During the pendency of the appeal before the Tribunal, the transaction of gift of land by the Nawab of Malerkotla to Shri Sewal Singh was treated by the GTO as a gift and the value thereof was assessed to gift-tax in the hands of the Nawab for the assessment years 1967-68 as per assessment order dated 13th February, 1973. At the instance of the assessee, the Tribunal has referred the following questions of law for the opinion of this court :
'1. Was the Tribunal, on the facts and in the circumstances of the case, right in law in not going into the assessee's contention that the transfer of the land being in favour of Shri Sewal Singh, individual, the market value thereof did not constitute income assessable in the hands of the Hindu undivided family ?
2. If question No. 1 is answered in the affirmative and against the assessee, was the Tribunal, on the facts and in the circumstances of the case, right in law in holding that the transfer of the land in question by the Nawab in favour of Shri Sewal Singh was by way of remuneration for his services rendered as a general attorney ?
3. If question No. 2 is answered in the affirmative and in favour of the revenue, is the said finding in the assessee-Hindu undivided family's case sustainable in the face of the gift-tax assessment order dated 16th February, 1973, made in the Nawab's case for the assessment year commencing on 1st April, 1967 and,
4. If question No. 3 is answered in the affirmative and against the assessee, was the Tribunal, on the facts and in the circumstances of the case, right in law in holding that the income comprised by the market value of the land in question was assessable in the hands of the assessee-Hindu undivided family, M/s. Sewal Singh Ajit Singh of Malerkotla ?'
5. At the very outset, we may point out that the questions referred to us are not happily worded. This was conceded by the learned counsel for the parties as well. The learned counsel for the parties agree that the basic question to be determined is whether the Tribunal, on the facts and circumstances of the case, was right in law in holding that the transfer of the land in question by the Nawab in favour of Shri Sewal Singh, was by way of remuneration for the services rendered by him as his generalattorney. Even if question No. 1 is answered in the negative, still this question will need determination. The counsel also concede that if the answer to this question, which is the subject-matter of question No. 2, is in the negative, no other question shall survive for determination. We, therefore, propose to deal with question No. 2 first.
6. Question No. 2.--After hearing the learned counsel for the parties and going through the records of the case, we find that the Tribunal while placing reliance on the general power of attorney executed by the Nawab of Malerkotla in favour of Shri Sewal Singh, came to the conclusion that the land gifted to Shri Sewal Singh was given to him in lieu of the services rendered by Shri Sewal Singh to the Nawab as his general attorney. The Tribunal held that had Shri Sewal Singh not functioned as the general attorney of the Nawab, there was no occasion for gifting the land to him. The Tribunal further observed that the Nawab must be knowing many other persons but he chose to gift the land to Shri Sewal Singh only because he functioned as general attorney. We are unable to agree with the conclusions arrived at by the Tribunal. The contents of the gift deed, which is annex. 'I' with the paper book, clearly make mention that since Shri Sewal Singh in his capacity as general attorney served the donor honestly and faithfully and it was because of the honesty and faithfulness that the donor developed true and natural love and affection with him and out of this love and affection, he gifted 13 kanals and 3 marlas of land to Shri Sewal Singh. The plain reading of the deed would show that the transaction in question is a gift. Merely because Shri Sewal Singh served the Nawab in the capacity of general attorney, is no ground to hold that the transaction in question was not a gift. It of course goes without saying that if the revenue had placed some other material on the record to show that the transaction in question was not by way of gift but was in the form of payment in lieu of the services rendered by Shri Sewal Singh, in that case, the conclusion could be arrived at that the value of the gifted land was income and was not a gift, but there is nothing on the record to believe the plain words used in the gift deed. Our view, that the onus is on the revenue in this regard, finds support from the judgment of the Bombay High Court in Dilip Kumar Roy v. CIT : 94ITR1(Bom) .
7. We may also observe that there was no contractual or legal obligation on the part of the Nawab to pay any remuneration to Shri Sewal Singh nor Shri Sewal Singh had any legal right to receive the remuneration. It was only because the Nawab developed love and affection with Shri Sewal Singh in view of his honest and faithful conduct that the gift in question was made.
8. In similar circumstances, their Lordships of the Supreme Court in Mahesh Anantrai Pattani v. CIT : 41ITR481(SC) came to the conclusionthat the gift of rupees five lakhs made by the Maharaja of Bhavanagar to the Chief Dewan of his native State was a gift and could not be termed as income in the hands of the Dewan. The observations made by their Lordships in that case aptly apply to the facts of the present case. We may point out that the learned AAC relied on the decision of their Lordships in Mahesh Anantrai Pattani's case : 41ITR481(SC) but the Tribunal held that the principles laid down in that case were not applicable to the present case. We are unable to agree with this finding of the Tribunal.
9. For the reasons recorded above, question No. 2 is answered in the negative, i.e., in favour of the assessee and against the revenue and it is held that the transaction in question is a gift and not remuneration paid by the Nawab to Shri Sewal Singh for the services rendered by him as his general attorney. In view of our answer to question No. 2, the learned counsel for the parties agree that the other questions referred to this court need not be answered. We order accordingly. The revenue shall bear the costs.
Gokal Chand Mittal, J.
10. I agree.