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TMI Blog1973 (12) TMI 12X X X X Extracts X X X X X X X X Extracts X X X X ..... there were some disputes between him on one side and his senior wife and her children on the other. These disputes seem to have been resolved at the intervention of the Government of India in the year 1952. The record of the case contains a copy of the letter dated 8th May, 1952, addressed to the assessee by the Raj Pramukh of the State of Saurashtra. This letter shows the terms of the settlement of the above referred disputes. One of the terms of this settlement was as regards the provision for the marriage expenditure of the two daughters of the assessee by his senior wife. According to this term of settlement, the assessee was expected to set apart the sum of Rs. 1,75,000 out of the sale proceeds of one of his immovable properties called " Lakhtar Utara " situated at Rajkot, for meeting the marriage expenditure of his above referred two daughters. This particular direction is found in the said letter of the Raj Pramukh in the following words : " You should also set apart a sum of Rs. 1,75,000 (Rupees one lakh and seventy-five thousand) from the sale proceeds of the Lakhtar Utara at Rajkot for the marriage of your two daughters. " It appears that by that time the assessee had ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Yuvraj does not form part of the assessee's taxable expenditure during the previous year is justified in law ? " Our answer to this question is in the affirmative for the reasons which follow. Before considering the respective contentions of the parties, we may shortly refer to the relevant provisions of the Act. The Act came into force on the first day of April, 1958. Section 3 of the Act is the charging section which says that, subject to the provisions of the Act, there shall be charged for every financial year commencing on and from the first day of April, 1958, a tax which is hereinafter referred to as "expenditure-tax " at the rate or rates specified in the Schedule. The word " expenditure " is given a statutory definition by clause (b) of section 2 as under : " Expenditure means any sum in money or money's worth, spent or disbursed or for the spending or disbursing of which a liability has been incurred by an assessee, and includes any amount which under the provisions of this Act is required to be included in the taxable expenditure." From this definition it is evident that if any amount is spent or disbursed or regarding the spending or disbursement of which any li ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... respect of his own marriage or the marriage of any of his dependants, and (ii) if a Hindu undivided family, in respect of the marriage of the karta or any other member of the family, subject to a maximum of Rs. 5,000 for each marriage." Thus, under this clause (c), the assessee was entitled to deduction of the maximum amount of Rs. 5,000 for the purpose of marriage of his second daughter. This deduction is in fact given by the Appellate Assistant Commissioner. Therefore, the question which remains to be considered is whether the department was correct in including the remaining. amount of Rs. 70,000 in the taxable expenditure of the assessee. It is at this stage that we should refer to the relevant provisions of section 5 under which the assessee claims exemption. These provisions are as under: " 5. No expenditure-tax shall be payable under this Act in respect of any such expenditure as is referred to in the following clauses, and such expenditure shall not be included in the taxable expenditure of an assessee-....... (j) any expenditure incurred by the assessee by way of, or in respect of, any gift, donation or settlement on trust or otherwise for the benefit of any other per ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e (1) of section 5 of the Act. Taking the above referred alternative argument first for our consideration, we find that the obligation incurred by the assessee at the intervention of the Government of India does not remain merely a political obligation after the assessee's acceptance of the same. There are no facts in the record to show how and under what circumstances the parties had sought the intervention of the Government of India. In fact, this point is raised for the first time during the course of the arguments and hence there is no finding of the Tribunal to show whether the Government of India acted as a conciliator or acted in exercise of its political powers. The only fact found in the record is that the disputes between the assessee and his Yuvraj were settled by the Government of India. This fact, standing by itself, is not sufficient to prove that the decision was a political decision. Be that as it may, once it is found that the parties concerned have accepted the decision of the Government of India and have acted upon the same, they must be held to have incurred all legal obligations and liabilities to carry out the said decision to its full extent. We thus see no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessee. Under the provisions of the Act, therefore, the assessee could have avoided the payment of expenditure-tax by incurring the expenditure on the marriage of his second daughter within the limits of Rs. 5,000. But, could he have done that in view of the obligation which he had incurred by accepting the decision of the Government of India as evidenced by the above referred letter of the Raj Pramukh ? The answer is only too obvious. It is thus clear that when the marriage of his second daughter took place the assessee had no option but to comply with the provisions of the letter of the Raj Pramukh. His obligation to incur the expenditure of nothing less than Rs. 75,000 was of an overriding character. This obligation was in the nature of a settlement for the benefit of his second daughter. The obligation was confined only to the amount of Rs. 75,000 and nothing more and hence he was not bound to pay the interest which he might have earned on this amount. Thus, even if it is held that the settlement did not amount to a " trust ", as contended by the learned Advocate-General, clause (j) would still be applicable to the facts of this case. We, however, do not see any reason wh ..... X X X X Extracts X X X X X X X X Extracts X X X X
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