TMI Blog1968 (8) TMI 51X X X X Extracts X X X X X X X X Extracts X X X X ..... n 4(i) would apply. On appeals, the view taken was that neither section 4(i) nor section 4(ii) would be applicable, and that being the case, the question whether they were dependants within the meaning of section 2(g)(i) need not be considered. The Tribunal substantially concurred and the reference comes before us at the instance of the Commissioner of Expenditure-tax. The question for consideration is : " Whether, on the facts and in the circumstances of the case, the inclusion of the expenditure incurred by the assessee's wife and minor son with that of the assessee was justified under section 4(ii) of the Expenditure-tax Act ?" Though the frame of the question is rested on section 4(ii), eventually, the answer will have to depend on the view taken as to the scope of section 2(g)(i). Our first impression on a consideration of section 2(g)(i) in the context of the other relevant provisions is that the Tribunal's view is correct. But there has been an elaborate argument before us which does show that the question is not entirely free from difficulty. Eventually, we have, however, decided to stick to our first impression. The Expenditure-tax Act provides for levy of tax on exp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee in respect of any obligation or personal requirement of the assessee or any of his dependants, which, but for the expenditure having been incurred by that other person, would have been incurred by the assessee, to the extent to which the amount of all such expenditure in the aggregate exceeds Rs. 5,000 in a year ; and (ii) any expenditure incurred by any dependant of the assessee for the benefit of the assessee or of any of his dependants out of any gift, donation or settlement on trust or out of any other source made or created by the assessee, whether directly or indirectly. The explanation cleared a doubt and stated that any expenditure incurred, by any person other than the assessee for and on his behalf by way of customary hospitality, or which was of a trivial or inconsequential nature, was not required to be included in the assessee's expenditure. Act 12 of 1959 deleted from the first limb the words "which, but for the expenditure having been incurred by that other person, would have been incurred by the assessee", and recast the second limb to read, "where the assessee is an individual, any expenditure incurred by any dependant of the assessee, and where the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en incurred from and out of any income or property transferred directly or indirectly to such dependant by such individual. That, however, does not conclude the matter. The answer to the question under reference, as we said at the outset, would really depend upon what a dependant means for purposes of the first part of section 4(ii). For the revenue, it has been heavily stressed that in interpreting the provision, we must bear in mind the scheme of the Act, particularly, the fact that the family of an individual is treated as a unit, though the individual is taken for the purposes of the assessment and the application of the principle of aggregation, as for instance, attempted by section 16(3) of the Income-tax Act, with a view to check evasion or avoidance of tax liability. Mr. Balasubrahmanyan contends that by a comparison of section 2(g)(i) before and after its amendment, the intention is clear from Act 12 of 1959, that even an independent spouse or a minor child is a dependant of the individual. Learned counsel in addition to the language of section 2(g)(i), as amended in 1959, invited our attention to the objects and reasons for amending the Act and stated that, although the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... come within the ambit of a dependant. That a dependant also means an independent but includes a dependant looks odd Indeed. It has been strenuously argued by Mr. Balasubrahmanyan that the very object of the amendment in 1959 was to provide that the husband, wife and minor child should be regarded as one unit for the exemption limit of Rs. 30,000 in the matter of non-taxable expenditure and not as a separate assessee, if they have income in their own individual rights. We do not think that if that was the object, the amendment, phrased as it was, has carried out the object. As we already mentioned, the individual is always the assessee or the Hindu undivided family, as the case may be. But, in the case of the individual or Hindu undivided family, the dependant's expenditure is in certain circumstances required to be included, and in that sense, the individual with the dependant or the Hindu undivided family with the dependant is taken as a unit. That scheme existed even before the amendment in 1959. The effect of the amended section 2(g)(i) is only to include or add to the category of dependants with reference to an individual and treat them all as a unit for the purposes of assess ..... X X X X Extracts X X X X X X X X Extracts X X X X
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