TMI Blog1968 (11) TMI 38X X X X Extracts X X X X X X X X Extracts X X X X ..... nt of expenditure incurred by them for the first year was to the extent of Rs. 27,842 and for the second year to the extent of Rs. 27,603. The wife as well as the minor children had their own sources of income and the expenses incurred by them were out of the said income. The Expenditure-tax Officer held that they were "dependants" of the assessee under section 2(g)(i) and the expenditure was, therefore, liable to be included in the expenditure of the assessee under section 4(ii). He, accordingly, clubbed these amounts to the expenditure of the assessee and brought them to tax. The Appellate Assistant Commissioner disagreed with the view taken by the Expenditure-tax Officer. In his opinion since these persons had adequate resources of their own, which had come to them not through the assessee but through others and the expenses incurred by them were out of their own resources, they could not come within the definition of "dependants" of the assessee. Section 4(ii), therefore, was not available for bringing the expenditure incurred by them within the taxable expenditure of the assessee. He, accordingly, allowed the assessee's appeals and directed the deletion of the amounts. Against ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... provisions of the Act was made liable to tax at the rates specified by the Finance Act applicable to the relevant year. "Assessee" under the Act meant an individual or a Hindu undivided family by whom expenditure-tax or any other sum was payable under the Act. "Taxable expenditure" meant the total expenditure of the assessee which was liable to be taxed under the Act. The word "dependant" in the original Act was defined as follows: "(i) Where the assessee is an individual, his or her spouse or child wholly or mainly dependent on the assessee for support and maintenance; (ii) Where the assessee is a Hindu undivided family- (a) every coparcener other than the karta, and (b) any other member of the family who under any law or order or decree of a court, is entitled to maintenance from the joint family property." The char in section 3 in the original Act was as follows: "3. (1) Subject to the other provisions contained in this Act, there shall be charged for every financial year commencing on and from the first day of April, 1958, a tax (hereinafter referred to as expenditure-tax) at the rate or rates specified in the Schedule in respect of the expenditure incurred by any ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0; and (ii) where the assessee is a Hindu undivided family, of Rs. 30,000 in respect of the karta and his wife and children, and a further allowance of Rs. 3,000 for every additional coparcener, provided that the basic allowance for the Hindu undivided family as a whole shall not exceed Rs. 60,000 in any case." It will thus be seen from the foregoing provisions that under the scheme of the Act, as it originally stood, the expenditure subject to the deductions and allowances as specified in the Act, which was made liable to tax, was the expenditure incurred by the assessee and expenditure incurred by third parties for the benefit of the assessee or his dependants which otherwise the assessee had to incur himself, and such expenditure as was incurred by the dependants of the assessee for the benefit of the assessee or any of his dependants out of the properties gifted, donated, or settled on trust by the assessee to them or out of any other source, which the assessee had created for them either directly or indirectly. The dependants of the assessee, where the assessee was an individual, were his wife and children provided they were wholly or mainly dependent on the assessee for s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er directly or indirectly, by any person other than the assessee in respect of any obligation or personal requirement of the assessee or any of his dependants to the extent to which the amount of all such expenditure in the aggregate exceeds Rs. 5,000 in any year; (ii) where the assessee is an individual, any expenditure incurred by any dependant of the assessee, and where the assessee is a Hindu undivided family, any expenditure incurred by any dependant from or out of any income or property transferred directly or indirectly to the dependent by the assessee. Explanation.- For the removal of doubts, it is hereby declared that nothing contained in this section shall be deemed to require the inclusion in the expenditure of the assessee of any expenditure incurred by any other person for or on behalf of the assessee by way of customary hospitality or which is of a trivial or inconsequential nature." The amendment made in the basic allowance under section 6 was as follows: "6. (1) The taxable expenditure of an assessee for any year shall be computed after making the following deductions and allowances, namely:--.......... (h) a basic allowance- (i) where the assessee is an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... were wholly or mainly dependent for their support and maintenance on the assessee were covered by the definition of the word "dependant". Under the original definition, therefore, in order to be a dependant, the person had to be either a spouse or a child of the assessee, and, moreover, had to be dependent wholly or mainly on the assessee for support and maintenance. Under the amended definition, what is intended to be done, according to the assessee is merely to enlarge the field of dependants by introducing an additional category. Whereas, under the unamended section, dependants could only by the spouse and children, who were wholly or mainly dependent on the assessee for their maintenance and support, under the amended section persons other than the spouse and children could also be the dependants on the assessee provided they also were wholly or mainly dependent on the assessee for their support and maintenance. It is, therefore, argued on behalf of the assessee that the amended definition does not do away with the requirement that the spouse or the minor child has to be dependent wholly or mainly on the assessee for support and maintenance in order to qualify as a dependant of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d support. It will be seen from the unamended definition that the spouse and children, whether major or minor, were to be considered as dependants provided they were wholly or mainly dependent on the assessee for their support and maintenance. The test of dependency was necessary to be satisfied in the case of every one of them. Under the amended definition, however, two different groups are contemplated: one consisting of the spouse and minor children and the other of other persons including the major children. The first group is dealt with by the first part of the definition which states what the word "dependant" is intended to mean and the second in the extended part of the definition in which the test of dependency on the assessee for Support and maintenance is required to be satisfied. The assessee's argument that the amended definition is only intended to enlarge the categories of dependants by adding another category to the category originally specified and is not intended to do away with the qualification of dependency which the original category was required to satisfy, is not capable of being sustained. In the first place, if that were the intention, it was not necessary ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... As to the first argument, we have already held that the wife and the two minor sons of the assessee are dependants of the assessee, and consequently, the expenditure incurred by them will come in for consideration under section 4(ii). As to the second argument, it appears to us difficult to hold that the closing part of the clause governs the first part as contended by the assessee. It is clear from the provision, as it is worded, that it is dealing with two cases: firstly, the case where the assessee is an individual and, secondly, the case where the assessee is an undivided Hindu family. In the first case the provision is complete with the part, which says "where the assessee is an individual, any expenditure incurred by any dependant of the assessee". The case, where the assessee is a Hindu undivided family is dealt with in the latter part of the provision, and it is only in that latter part that the expenditure is required to be incurred by the dependant from or out of any income or property transferred directly or indirectly to the dependant by the assessee. It is urged on behalf of the assessee that the use of the common word "assessee", which applies to both the cases, v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s urged by the learned counsel that the basic idea of the expenditure-tax is to tax the expenditure of the assessee: the expenditure which he himself has incurred or the expenditure incurred by his dependants, whom he was under an obligation to maintain and support or the expenditure, which has been incurred by some third parties for the benefit of the assessee or his dependants. In other words, the expenditure-tax was a tax intended to be levied on such expenditure as a man would incur for himself and his dependants or which would be incurred for him by others. The expenditure, which is brought to tax as the expenditure of the assessee, must have some nexus with the income or source of the assessee or his responsibilities and obligations. The expenditure of the dependants of the assessee, if incurred by the assessee himself or by the dependants themselves from or out of the income or property transferred to them by the assessee, which otherwise the assessee would have to bear himself, would, undoubtedly, qualify for the expenditure-tax. But where the expenditure incurred by the wife and the children is altogether independent of the assessee himself, having no connection to their d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he language of a statute is clear and unambiguous and leads to a certain construction about which there can be no doubt, the circumstance that accepting the construction, which is in consonance with the clear language of the section, might lead to inconvenience, hardship or anomalous results, will provide no justification for not accepting the said construction. In the interpretation of a provision of law, what the court must be primarily guided by is the language of the section and not the convenience or inconvenience or the consequences which might result therefrom. It is no doubt true that if the language of the provisions was capable of another construction and the choice was between two possible constructions, the submissions urged by the learned counsel would undoubtedly have to be considered. Inasmuch as, in our opinion, on the language of the provisions no other construction, except the one that we are putting upon it is reasonably possible, it would not be permissible for us to reject the said construction either on the ground of hardships, inconvenience or anomalous results. It is, therefore, not necessary to discuss in any great detail the several reasons which Mr. Kolah ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to persuade us to abandon a construction which is consistent with the language of the provision. Mr. Kolah has invited our attention to a case decided by the Madhya Pradesh High Court in Rajkumarsinghji v. Commissioner of Expenditure-tax which is in his favour. Some of the arguments, which he had advanced before us, have been considered in the said case and accepted in favour of the assessee. It has been held in that case that if the spouse or a minor child has independent source of income and is in no way dependant on the assessee for support and maintenance then the expenditure incurred by the spouse or the minor child out of their independent income cannot by any reasonable basis be regarded as expenditure incurred by the assessee within the meaning of the provision of section 4(ii). It has been held that the expression "any expenditure incurred by any dependant from or out of any income or property transferred directly or indirectly to the dependant by the assessee" occurring in section 4(ii) applies not only when the assessee is a Hindu undivided family but also when the assessee is an individual. The court has also held that it is only the spouse or minor child of the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X
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