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M.N. Patwardhan Vs. Commissioner of Expenditure-tax, Poona - Court Judgment

LegalCrystal Citation
SubjectDirect Taxation
CourtMumbai High Court
Decided On
Judge
Reported in[1970]78ITR338(Bom)
ActsExpenditure-tax Act, 1957 - Sections 2 and 4
AppellantM.N. Patwardhan
RespondentCommissioner of Expenditure-tax, Poona
Appellant AdvocateR.J. Kolah, Adv.
Respondent AdvocateG.N. Joshi, Adv.
Excerpt:
direct taxation - expenditure-tax - sections 2 (g) (i) and 4 of expenditure-tax act, 1957 - whether assessee liable to expenditure-tax on expenditure incurred by wife and minor child - section 4 contemplates clubbing of expenditure incurred by 'dependent' of individual assessee - wife and minor child 'dependent' in terms of section 2 (g) (i) - assessee liable to expenditure-tax on expenditure incurred by wife and minor child. - maharashtra scheduled castes, scheduled tribes, de-notified tribes (vimukta jatis), nomadic tribes, other backward classes and special backward category (regulation of issuance and verification of) caste certificate act (23 of 2001), sections 6 & 10: [s.b. mhase, a.p. deshpande & p.b. varale, jj] caste certificate petitioner seeking appointment against the post.....v.s. desai, j.1. this is a reference under section 25(1) of the expenditure-tax act at the instance of the assessee and relates to the assessments for the assessment years 1959-60 and 1960-61, the corresponding previous years for which were the years ended on 31st may, 1958, and 31st may, 1959, respectively. the question raised on the reference is in respect of the inclusion of certain expenditures incurred by the wife and two minor sons of the assessee in the expenditure of the assessee for the purpose of expenditure-tax. 2. the assessee is an individual. during the previous years in question the assessee's wife, smt. indumati raje, and his minor sons, shrimant ganpatrao and shrimant gangadharrao, incurred expenditure, which was not exempt from the expenditure-tax. the total amount of.....
Judgment:

V.S. Desai, J.

1. This is a reference under section 25(1) of the Expenditure-tax Act at the instance of the assessee and relates to the assessments for the assessment years 1959-60 and 1960-61, the corresponding previous years for which were the years ended on 31st May, 1958, and 31st May, 1959, respectively. The question raised on the reference is in respect of the inclusion of certain expenditures incurred by the wife and two minor sons of the assessee in the expenditure of the assessee for the purpose of expenditure-tax.

2. The assessee is an individual. During the previous years in question the assessee's wife, Smt. Indumati Raje, and his minor sons, Shrimant Ganpatrao and Shrimant Gangadharrao, incurred expenditure, which was not exempt from the expenditure-tax. The total amount of expenditure incurred by them for the first year was to the extent of Rs. 27,842 and for the second year for the first year was 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 the decision of the Appellate Assistant Commissioner the department appealed to the Appellate Tribunal. The Tribunal held, on a construction of section 2(g) (i) and section 4(ii), that the wife and the minor sons of the assessee were his dependants within the meaning of section 2(g) (i) and the expenditure incurred by them was includible in the expenditure of the assessee for the purposes of the expenditure-tax irrespective of whether they had their own resources or not in view of the provisions of section 4(ii). The Tribunal, accordingly, allowed the appeal of the department and directed the restoration of the amounts, which had been excluded by the Appellate Assistant Commissioner. At the instance of the assessee it has then referred the following question of law on the present reference :

'Whether, on the facts and in the circumstances of the case, the sums of Rs. 27,482 and Rs. 27,603, being expenditure incurred by the wife and minor sons of the assessee, are includible in the taxable expenditure of the assessee under section 4(ii) read with section 2(g) of the Expenditure-tax Act as amended in 1959 ?'

3. The Expenditure-tax Act, which was brought into force from the 1st of April, 1958, was amended first in 1959 by the Finance Act of 1959, and thereafter, again in the year 1964 by the Finance Act of 1964. We are here concerned with the Act as it stood after its amendment in 1959 and before its further amendment in 1964. The question raised on the reference depends on the construction of sections 2(g) (i) and 4(ii) of the Act and in order to deal with the arguments which have been advanced by either side relating to the interpretation of the said provisions, it will be necessary to refer to the said provisions and certain other provisions of the Act as they stood in the original Act and after its amendment in 1959.

4. The Expenditure-tax Act, under its charging section, levied a tax in respect of the expenditure incurred in the previous year by an individual or a Hindu undivided family, which were the assessable entities under the Act. The expenditure, which was made liable to tax under the Act, included certain expenditures incurred by the third parties for the assessee or his dependants or by the dependants of the assessee in certain circumstances. Certain exemptions and deductions were allowed under the Act and the taxable expenditure computed under the 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 dependant 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 charging 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 individual or Hindu undivided family in the previous year :

Provided that no expenditure-tax shall be payable by an assessee for any assessment year if his income from all sources during the relevant previous year as reduced by the amount of taxes to which such income may be liable under any other law for the time being in force does not exceed rupees thirty-six thousand. (2) For the removal of doubts, it is hereby declared that nothing contained in this Act shall require the inclusion in the taxable expenditure of an assessee for any year of expenditure for the spending or disbursing of which a liability has already been incurred and which has been included in the taxable expenditure for any earlier year.'

Section 4, as it originally stood, was in these terms :

'Unless otherwise provided in section 5, the following amounts shall be included in computing the expenditure of an assessee liable to tax under this Act, namely :

(i) any expenditure incurred, whether 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 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 any year;

(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.

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 say of customary hospitality or which is of a trivial or inconsequential nature.'

5. Section 5 of the Act dealt with exemption from expenditure-tax in certain cases. Section 6 of the Act provided for certain deductions to be made in computing the taxable expenditure. It is not necessary to state all the items excepting the one which related to a basic allowance specified in clause (h) of the section, which was in these terms :

'(h) a basic allowance -

(i) where the assessee is an individual, of Rs. 30,000; 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.'

6. 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 support and maintenance. On the provisions of sections 2(g) and 4(ii), as they stood in the original Act, the wife and children of the assessee who had their independent source not obtained by them through the assessee and who were not either wholly or mainly dependent on the assessee for their support and maintenance, were not his dependants, and, consequently, the expenditure incurred by them out of their own sources of income did not qualify for being included in the taxable expenditure of the assessee. In 1959, however, material changes were made in the Act. The amendments came into force from the 1st of April, 1959, and it is undisputed that the amended provisions are applicable to the present assessment. Section 2(g), on amendment, stood as follows :

'2. (g) 'dependant' means -

(i) where the assessee is an individual, his or her spouse or minor child, and includes any person 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.'

7. The charging section 3 was also amended. It is, however, not necessary to set out the whole of the amended section. The relevant portion, which may be necessary to be considered, is 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 individual or Hindu undivided family in the previous year : Provided that no expenditure-tax shall be payable by an assessee for any assessment year if the income from all the sources derived by the assessee and his dependants during the previous year as reduced by the amount of taxes to which such income may be liable under any law for the time being in force does not exceed rupees thirty-six thousand.'

The old section 4, after its amendment, was enacted as follows :

'4. Unless otherwise provided in section 5, the following amounts shall be included in computing the expenditure of an assessee liable to tax under this Act, namely :-

(i) any expenditure incurred, whether 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 dependant 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 individual, of Rs. 30,000 for himself and all his dependants; 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 :

Provided further that the allowance of Rs. 3,000 for any additional coparcener shall not be allowed where the coparcener is separately assessed under this Act and is entitled to the allowance of Rs. 30,000 under sub-clause (i).'

8. The question to be considered in the present case is whether the assessee's wife and the two minor sons are dependants within the meaning of section 2(g) (i) of the amended Act and whether the expenditure incurred by them is includible in the taxable expenditure of the assessee under section 4(ii).

9. It is argued by the department that under the amended definition of the word 'dependant' under section 2(g) (i), the spouse or the minor child of an assessee, who is an individual, is his dependant, irrespective of whether the spouse or the minor child is wholly or mainly dependent on the assessee for support and maintenance. It is argued that it is only in respect of the others excepting the spouse or the minor children that the whole or substantial dependence on the assessee for support and maintenance is necessary to qualify them as dependants of the assessee. In the case of the spouse or the minor children, however, the very relationship is sufficient to make them dependants and whether they have to depend on the assessee for their maintenance and support or whether they have their own independent income and resources is not relevant in their case.

10. It is argued on behalf of the assessee on the other hand that dependency on the assessee for support and maintenance is necessary even in the case of a spouse and minor children in order to make them 'dependants' of the assessee within the meaning of section 2(g) (i). It is argued that under the section as it originally stood the condition of dependency was necessary to be satisfied by the spouse or the child in order to be regarded as a dependant of the assessee. Under the original definition of the word 'dependant', however, the whole filed of dependants was restricted to the spouse and children and such of them as 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 filed of dependants by introducing an additional category. Whereas, under the unamended section, dependants could only be 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 of 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 the assessee. Since that is the true interpretation of the definition, the wife and two minor sons of the assessee in the present case cannot be treated as his dependants within the said definition.

11. As to the interpretation of section 4(ii) the assessee's argument is as follows : The expenditure, which is includible under section 4(ii) within the taxable expenditure of the assessee, is the expenditure incurred by the dependants of the assessee. Since the wife and the two minor sons of the assessee do not qualify as dependants within the definition the expenditure incurred by them cannot be included in the assessment of the assessee under section 4(ii). Alternatively, even if the definition of a 'dependant' is interpreted always to include the spouse and the minor child of the assessee, irrespective of whether they are wholly or mainly dependent on the assessee for their support and maintenance, even then the only expenditure incurred by them, which could be included in the taxable expenditure of the assessee, would be such as is incurred by them from or out of the property transferred directly or indirectly to them by the assessee. Since in the present case the expenditure incurred by the wife and the two minor sons is not out of such property but out of their own independent income, it will not be includible under section 4(ii) in the taxable expenditure of the assessee even if the wife and the two minor sons were to fall within the definition of the word 'dependant' under section 2(g) (i) of the Act.

12. In our opinion, it is not possible to accept the construction, which is sought to be put on sections 2(g) (i) and 4(ii) on behalf of the assessee. The definition, as worded, states, in the first part, what is meant by the word 'dependant' and in the second part, what it is intended to include.'Dependant' of an individual assessee is his spouse and minor child in all cases and, apart from these persons who are his dependants, others who are wholly or mainly dependent on him for support and maintenance will also be treated as his dependants. What is meant by the word 'dependant' is specified clearly and completely before the inclusive part of the definition starts. The qualification for any person other than the spouse or the minor child to be treated as dependants is that such person should wholly or mainly be dependent on the assessee for his maintenance and 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 to divide the definition into two parts, putting one category in one part and the other in the other part. Secondly, the inclusion of the minor children only in the first part of the definition, leaving the major children to be covered by the expression 'any person' occurring in the second part of the definition, clearly indicates that the qualifying words are only intended to apply to the second part. If the words 'spouse or minor child' were also to be governed by the words 'wholly or mainly dependent on the assessee for support and maintenance as much as the major children, who were to be treated as dependants, there was no point whatsoever in adding the word 'minor' before the word 'child' in the first part of the definition and it would have been enough to say a spouse or child as in the old definition. The deliberate language used in the amended definition leaves no doubt whatsoever, in our opinion, that the class of spouse and minor children is a separate and distinct class from the class indicated by the latter part of the definition, for which class only the qualification of dependence on the assessee for support and maintenance is necessary to be there. In our opinion, therefore, on a proper construction of the amended definition, the spouse and minor child of the assessee will always be a dependant of the assessee, irrespective of whether they are wholly or mainly dependent for their support and maintenance on the assessee.

13. Coming now to the provision of section 4(ii), what is contended on behalf of the assessee is, firstly, that inasmuch as the wife and the two minor sons of the assessee in the present case are not the dependants of the assessee within the meaning of the definition in section 2(g) (i), the expenditure incurred by them is not includible in the expenditure of the assessee. Secondly, even if they be the dependants of the assessee, still since the expenditure incurred by them is not out of any income or property transferred directly or indirectly to them by the assessee, the expenditure is not covered by the provision of section 4(ii). The argument in this connection is that the words 'from or out of any income or property transferred directly or indirectly to the dependant by the assessee' occurring in section 4(ii) govern the words 'expenditure incurred by any dependant of the assessee' occurring in the first part of the clause.

14. 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).

15. 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, viz., the individual as well as the Hindu undivided family, in the concluding part of the clause is clearly indicative of the last clause being applicable to both the cases. It is pointed out that, if the concluding portion was to apply to only the case of a Hindu undivided family, instead of the use of the word 'assessee', the words 'Hindu undivided family' would have been used. It is no doubt true that the use of the word 'assessee', which is applicable to both cases, may make it possible to raise the submission, but what is important to note is that, if what is submitted was correct, the provision of the section was not required to be put into two different compartments at all. If the dependants of the assessee as well as the dependants of the Hindu undivided family were both to be governed by the concluding part of the provision it could easily have been worded as follows :

'Any expenditure incurred by the dependant of an assessee from or out of any income or property transferred directly or indirectly to the dependant by the assessee.'

16. The very fact that the provision had to specify the two classes differently is a clear indication that the requirements and consequences contemplated by the provision in the two cases were to be different, and whereas in the case of an individual assessee the only qualification for the expenditure to be included in his assessment was that it should be the expenditure incurred by any dependant of his, in the case of a Hindu undivided family it was includible only if it was from or out of the income or property transferred directly or indirectly to the dependant by the family. The word 'assessee' occurring in the concluding part of the clause has, in the context of the proviso, application to the class of assessees that is being considered under the second part of the definition, viz., the Hindu undivided family. In our opinion, therefore, on the construction of section 4(ii), as it stood at the material time, the expenditure incurred by the wife and the two minor sons of the assessee was includible in the taxable expenditure of the assessee as held by the Tribunal.

17. It is urged by Mr. Kolah that the construction and interpretation which we are putting upon the provisions in question is, in the first place, not consistent with the basic scheme of the Act and is, moreover, likely to lead to several anomalous results. It is 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 dependence on him or to any property transferred to them by the assessee or from out of any source created by him for them, such expenditure cannot by any stretch of imagination be considered as the expenditure of the assessee. There would, therefore, be no justification whatsoever for holding that the expenditure incurred by the wife or minor children of the assessee out of their own independent source without the assessee being in any way concerned with the same, was the expenditure of the assessee. It was urged by the learned counsel that, although there have been amendments in the definition of the word 'dependants' and also in section 4 of the Act, the definition of the word 'assessee' under the Act has remained unchanged and the assessable entities have remained the same as before, viz., an individual and a Hindu undivided family. The amendments have not the effect of changing the assessable unit from an individual into a unit of the individual and his wife and minor children. The conclusion of the expenditure incurred by the wife and the minor children out of their independent means, therefore, cannot come in for inclusion in the expenditure of the assessee. He has further argued that the underlying idea of section 4(ii) is to tax the expenditure incurred out of the income or property transferred directly or indirectly to the dependant by the assessee and it would, therefore, be a reasonable construction to apply the said words not only to the case of a Hindu undivided family but to the case of an individual assessee as well. There is no reasonable basis for making a distinction between an assessee, who is an individual and an assessee, who is a Hindu undivided family, which would justify a different treatment of the expenditure incurred by their dependants. An interpretation, which gives rise to a discrimination between the two cases without any reasonable basis, should, therefore, be abandoned as it would be violative of article 14 of the Constitution of India. Mr. Kolah has then suggested that the interpretation, which we seek to put on the provisions, may lead to the consequence of double taxation, since in the assessment of the husband, the wife's expenditure will be included, whereas in the wife's assessment, the husband's expenditure will be included and, consequently, the same expenditure will be taxed twice.

18. Now, we may point out that where the 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 construction, 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, no necessary to discuss in any great detail the several reasons which Mr. Kolah has pressed upon us to abandon the construction which we seek to put on the provisions in question.

19. As to his argument that having regard to the basic scheme of the expenditure-tax, there was no justification why monies spend by the wife and children out of their own resources should be clubbed in the expenditure of the assessee, we may point out that in a taxing statute it is hardly relevant to consider the justification for a certain provision. Moreover, we may point out that it appears that having regard to one of the objects of the Act, viz., to put a check on over-spending, it may as well be that the taxing statute while proceeding to tax the expenditure incurred by the assessee might have though of the expenditure incurred by the normal spending unit of the assessee consisting of the spouse and the minor children. That in amending the provisions of sections 2(g) and 4(ii) the legislature might have had such an intention in mind gets some support from the consequential changes, which have been made in the charging section 3 as well as in section 6, which permits the basic allowance to the assessee. It would be seen from the charging section that in the first proviso the exemption limit from payment of expenditure-tax for incomes below Rs. 30,000 is laid with reference to the combined incomes of the assessee and his dependants. Similarly, the basic allowance in section 6 is again for the assessee and all his dependants together. These are the changes introduced in the Act as consequential to the definition of the word 'dependant' being changed. It is no doubt true that the unit of assessment remains the individual. However, even for the individual the conception of a spending unit appears to have been introduced in the new amendment. As to the fear of double taxation, it may be that theoretically such a possibility may exist in certain cases where the husband and wife may both be individual assessees, but such a result, if at all it comes about, is always capable of being rectified because it is a cardinal principle of all taxation laws whether provided in the particular statute or not that the same item will not be taxed over again and since there is nothing in the Expenditure-tax Act which does away with this principle by any provision, the fear of possible double taxation on the basis of the above construction of the provision cannot be sufficient to persuade us to abandon a construction which is consistent with the language of the provision.

20. Mr. Kolah has invited our attention to a case decided by the Madhya Pradesh High Court in Rajkumarsinghji v. Commissioner of Expenditure-tax See infra 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 assessee who is wholly or mainly dependent on the assessee for support and maintenance that falls with the definition of the word 'dependant' in section 2(g) (i). There is, on the other hand, a decision of the Andhra Pradesh High Court in His Highness Prince Azam Jah v. Expenditure-tax Officer ([1965] 55 I. T. R. 230 (A. P.).), which has taken a contrary view. That decision, no doubt, is of a single judge but we find from the Short Notes of Current Cases appearing in Prince Azam Jah v. Expenditure-tax Officer, Andhra Pradesh ([1968] I. T. R. (Sh. N.) 5. - See infra page 364 for full report), of the Notes Section, that the appeal from the decision in His Highness Prince Azam Jah v. Expenditure-tax Officer, Hyderabad ([1965] 55 I. T. R. 230 (A. P.)), was heard by a Bench of three judges of the High Court and by a majority 2 : 1, the said decision has been confirmed and the view taken by the learned judge in Prince Azam Jah v. Expenditure-tax Officer, Hyderabad ([1965] 55 I. T. R. 230 (A. P.)), on the interpretation of section 2(g) (i) and section 4(ii) of the Expenditure-tax Act has been confirmed.

21. Having regard to the reasons, which we have already discussed, we are in agreement with the view taken by the Andhra Pradesh High Court in His Highness Prince Azam Jah v. Expenditure-tax Officer, Hyderabad ([1965] 55 I. T. R. 230 (A. P.)), and with very great respect we are unable to agree with the view taken by the Madhya Pradesh High Court in Rajkumarsinghji v. Commissioner of Expenditure-tax (See infra).

22. In the result, therefore, our answer to the question is in the affirmative. The assessee will pay the cost of the Commissioner.

V.S. Desai, J.

23. This is a reference under section 25(1) of the Expenditure-tax Act at the instance of the assessee and relates to the assessments for the assessment years 1959-60 and 1960-61, the corresponding previous years for which were the years ended on 31st May, 1958, and 31st May, 1959, respectively. The question raised on the reference is in respect of the inclusion of certain expenditures incurred by the wife and two minor sons of the assessee in the expenditure of the assessee for the purpose of expenditure-tax.

24. The assessee is an individual. During the previous years in question the assessee's wife, Smt. Indumati Raje, and his minor sons, Shrimant Ganpatrao and Shrimant Gangadharrao, incurred expenditure, which was not exempt from the expenditure-tax. The total amount of expenditure incurred by them for the first year was to the extent of Rs. 27,842 and for the second year for the first year was 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 the decision of the Appellate Assistant Commissioner the department appealed to the Appellate Tribunal. The Tribunal held, on a construction of section 2(g) (i) and section 4(ii), that the wife and the minor sons of the assessee were his dependants within the meaning of section 2(g) (i) and the expenditure incurred by them was includible in the expenditure of the assessee for the purposes of the expenditure-tax irrespective of whether they had their own resources or not in view of the provisions of section 4(ii). The Tribunal, accordingly, allowed the appeal of the department and directed the restoration of the amounts, which had been excluded by the Appellate Assistant Commissioner. At the instance of the assessee it has then referred the following question of law on the present reference :

'Whether, on the facts and in the circumstances of the case, the sums of Rs. 27,482 and Rs. 27,603, being expenditure incurred by the wife and minor sons of the assessee, are includible in the taxable expenditure of the assessee under section 4(ii) read with section 2(g) of the Expenditure-tax Act as amended in 1959 ?'

25. The Expenditure-tax Act, which was brought into force from the 1st of April, 1958, was amended first in 1959 by the Finance Act of 1959, and thereafter, again in the year 1964 by the Finance Act of 1964. We are here concerned with the Act as it stood after its amendment in 1959 and before its further amendment in 1964. The question raised on the reference depends on the construction of sections 2(g) (i) and 4(ii) of the Act and in order to deal with the arguments which have been advanced by either side relating to the interpretation of the said provisions, it will be necessary to refer to the said provisions and certain other provisions of the Act as they stood in the original Act and after its amendment in 1959.

26. The Expenditure-tax Act, under its charging section, levied a tax in respect of the expenditure incurred in the previous year by an individual or a Hindu undivided family, which were the assessable entities under the Act. The expenditure, which was made liable to tax under the Act, included certain expenditures incurred by the third parties for the assessee or his dependants or by the dependants of the assessee in certain circumstances. Certain exemptions and deductions were allowed under the Act and the taxable expenditure computed under the provisions of the Act was made liable to tax at the rates specified by the Finance Act applicable to the relevant year.

27. '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 dependant 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 charging 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 individual or Hindu undivided family in the previous year :

Provided that no expenditure-tax shall be payable by an assessee for any assessment year if his income from all sources during the relevant previous year as reduced by the amount of taxes to which such income may be liable under any other law for the time being in force does not exceed rupees thirty-six thousand. (2) For the removal of doubts, it is hereby declared that nothing contained in this Act shall require the inclusion in the taxable expenditure of an assessee for any year of expenditure for the spending or disbursing of which a liability has already been incurred and which has been included in the taxable expenditure for any earlier year.'

Section 4, as it originally stood, was in these terms :

'Unless otherwise provided in section 5, the following amounts shall be included in computing the expenditure of an assessee liable to tax under this Act, namely :

(i) any expenditure incurred, whether 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 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 any year;

(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.

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 say of customary hospitality or which is of a trivial or inconsequential nature.'

Section 5 of the Act dealt with exemption from expenditure-tax in certain cases. Section 6 of the Act provided for certain deductions to be made in computing the taxable expenditure. It is not necessary to state all the items excepting the one which related to a basic allowance specified in clause (h) of the section, which was in these terms :

'(h) a basic allowance -

(i) where the assessee is an individual, of Rs. 30,000; 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.'

28. 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 support and maintenance. On the provisions of sections 2(g) and 4(ii), as they stood in the original Act, the wife and children of the assessee who had their independent source not obtained by them through the assessee and who were not either wholly or mainly dependent on the assessee for their support and maintenance, were not his dependants, and, consequently, the expenditure incurred by them out of their own sources of income did not qualify for being included in the taxable expenditure of the assessee. In 1959, however, material changes were made in the Act. The amendments came into force from the 1st of April, 1959, and it is undisputed that the amended provisions are applicable to the present assessment. Section 2(g), on amendment, stood as follows :

'2. (g) 'dependant' means -

(i) where the assessee is an individual, his or her spouse or minor child, and includes any person 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.'

29. The charging section 3 was also amended. It is, however, not necessary to set out the whole of the amended section. The relevant portion, which may be necessary to be considered, is 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 individual or Hindu undivided family in the previous year : Provided that no expenditure-tax shall be payable by an assessee for any assessment year if the income from all the sources derived by the assessee and his dependants during the previous year as reduced by the amount of taxes to which such income may be liable under any law for the time being in force does not exceed rupees thirty-six thousand.'

The old section 4, after its amendment, was enacted as follows :

'4. Unless otherwise provided in section 5, the following amounts shall be included in computing the expenditure of an assessee liable to tax under this Act, namely :-

(i) any expenditure incurred, whether 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 dependant 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 individual, of Rs. 30,000 for himself and all his dependants; 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 :

Provided further that the allowance of Rs. 3,000 for any additional coparcener shall not be allowed where the coparcener is separately assessed under this Act and is entitled to the allowance of Rs. 30,000 under sub-clause (i).'

30. The question to be considered in the present case is whether the assessee's wife and the two minor sons are dependants within the meaning of section 2(g) (i) of the amended Act and whether the expenditure incurred by them is includible in the taxable expenditure of the assessee under section 4(ii).

31. It is argued by the department that under the amended definition of the word 'dependant' under section 2(g) (i), the spouse or the minor child of an assessee, who is an individual, is his dependant, irrespective of whether the spouse or the minor child is wholly or mainly dependent on the assessee for support and maintenance. It is argued that it is only in respect of the others excepting the spouse or the minor children that the whole or substantial dependence on the assessee for support and maintenance is necessary to qualify them as dependants of the assessee. In the case of the spouse or the minor children, however, the very relationship is sufficient to make them dependants and whether they have to depend on the assessee for their maintenance and support or whether they have their own independent income and resources is not relevant in their case.

32. It is argued on behalf of the assessee on the other hand that dependency on the assessee for support and maintenance is necessary even in the case of a spouse and minor children in order to make them 'dependants' of the assessee within the meaning of section 2(g) (i). It is argued that under the section as it originally stood the condition of dependency was necessary to be satisfied by the spouse or the child in order to be regarded as a dependant of the assessee. Under the original definition of the word 'dependant', however, the whole filed of dependants was restricted to the spouse and children and such of them as 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 filed of dependants by introducing an additional category. Whereas, under the unamended section, dependants could only be 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 of 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 the assessee. Since that is the true interpretation of the definition, the wife and two minor sons of the assessee in the present case cannot be treated as his dependants within the said definition.

33. As to the interpretation of section 4(ii) the assessee's argument is as follows : The expenditure, which is includible under section 4(ii) within the taxable expenditure of the assessee, is the expenditure incurred by the dependants of the assessee. Since the wife and the two minor sons of the assessee do not qualify as dependants within the definition the expenditure incurred by them cannot be included in the assessment of the assessee under section 4(ii). Alternatively, even if the definition of a 'dependant' is interpreted always to include the spouse and the minor child of the assessee, irrespective of whether they are wholly or mainly dependent on the assessee for their support and maintenance, even then the only expenditure incurred by them, which could be included in the taxable expenditure of the assessee, would be such as is incurred by them from or out of the property transferred directly or indirectly to them by the assessee. Since in the present case the expenditure incurred by the wife and the two minor sons is not out of such property but out of their own independent income, it will not be includible under section 4(ii) in the taxable expenditure of the assessee even if the wife and the two minor sons were to fall within the definition of the word 'dependant' under section 2(g) (i) of the Act.

34. In our opinion, it is not possible to accept the construction, which is sought to be put on sections 2(g) (i) and 4(ii) on behalf of the assessee. The definition, as worded, states, in the first part, what is meant by the word 'dependant' and in the second part, what it is intended to include.'Dependant' of an individual assessee is his spouse and minor child in all cases and, apart from these persons who are his dependants, others who are wholly or mainly dependent on him for support and maintenance will also be treated as his dependants. What is meant by the word 'dependant' is specified clearly and completely before the inclusive part of the definition starts. The qualification for any person other than the spouse or the minor child to be treated as dependants is that such person should wholly or mainly be dependent on the assessee for his maintenance and 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 to divide the definition into two parts, putting one category in one part and the other in the other part. Secondly, the inclusion of the minor children only in the first part of the definition, leaving the major children to be covered by the expression 'any person' occurring in the second part of the definition, clearly indicates that the qualifying words are only intended to apply to the second part. If the words 'spouse or minor child' were also to be governed by the words 'wholly or mainly dependent on the assessee for support and maintenance as much as the major children, who were to be treated as dependants, there was no point whatsoever in adding the word 'minor' before the word 'child' in the first part of the definition and it would have been enough to say a spouse or child as in the old definition. The deliberate language used in the amended definition leaves no doubt whatsoever, in our opinion, that the class of spouse and minor children is a separate and distinct class from the class indicated by the latter part of the definition, for which class only the qualification of dependence on the assessee for support and maintenance is necessary to be there. In our opinion, therefore, on a proper construction of the amended definition, the spouse and minor child of the assessee will always be a dependant of the assessee, irrespective of whether they are wholly or mainly dependent for their support and maintenance on the assessee.

35. Coming now to the provision of section 4(ii), what is contended on behalf of the assessee is, firstly, that inasmuch as the wife and the two minor sons of the assessee in the present case are not the dependants of the assessee within the meaning of the definition in section 2(g) (i), the expenditure incurred by them is not includible in the expenditure of the assessee. Secondly, even if they be the dependants of the assessee, still since the expenditure incurred by them is not out of any income or property transferred directly or indirectly to them by the assessee, the expenditure is not covered by the provision of section 4(ii). The argument in this connection is that the words 'from or out of any income or property transferred directly or indirectly to the dependant by the assessee' occurring in section 4(ii) govern the words 'expenditure incurred by any dependant of the assessee' occurring in the first part of the clause.

36. 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).

37. 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, viz., the individual as well as the Hindu undivided family, in the concluding part of the clause is clearly indicative of the last clause being applicable to both the cases. It is pointed out that, if the concluding portion was to apply to only the case of a Hindu undivided family, instead of the use of the word 'assessee', the words 'Hindu undivided family' would have been used. It is no doubt true that the use of the word 'assessee', which is applicable to both cases, may make it possible to raise the submission, but what is important to note is that, if what is submitted was correct, the provision of the section was not required to be put into two different compartments at all. If the dependants of the assessee as well as the dependants of the Hindu undivided family were both to be governed by the concluding part of the provision it could easily have been worded as follows :

'Any expenditure incurred by the dependant of an assessee from or out of any income or property transferred directly or indirectly to the dependant by the assessee.'

38. The very fact that the provision had to specify the two classes differently is a clear indication that the requirements and consequences contemplated by the provision in the two cases were to be different, and whereas in the case of an individual assessee the only qualification for the expenditure to be included in his assessment was that it should be the expenditure incurred by any dependant of his, in the case of a Hindu undivided family it was includible only if it was from or out of the income or property transferred directly or indirectly to the dependant by the family. The word 'assessee' occurring in the concluding part of the clause has, in the context of the proviso, application to the class of assessees that is being considered under the second part of the definition, viz., the Hindu undivided family. In our opinion, therefore, on the construction of section 4(ii), as it stood at the material time, the expenditure incurred by the wife and the two minor sons of the assessee was includible in the taxable expenditure of the assessee as held by the Tribunal.

39. It is urged by Mr. Kolah that the construction and interpretation which we are putting upon the provisions in question is, in the first place, not consistent with the basic scheme of the Act and is, moreover, likely to lead to several anomalous results. It is 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 dependence on him or to any property transferred to them by the assessee or from out of any source created by him for them, such expenditure cannot by any stretch of imagination be considered as the expenditure of the assessee. There would, therefore, be no justification whatsoever for holding that the expenditure incurred by the wife or minor children of the assessee out of their own independent source without the assessee being in any way concerned with the same, was the expenditure of the assessee. It was urged by the learned counsel that, although there have been amendments in the definition of the word 'dependants' and also in section 4 of the Act, the definition of the word 'assessee' under the Act has remained unchanged and the assessable entities have remained the same as before, viz., an individual and a Hindu undivided family. The amendments have not the effect of changing the assessable unit from an individual into a unit of the individual and his wife and minor children. The conclusion of the expenditure incurred by the wife and the minor children out of their independent means, therefore, cannot come in for inclusion in the expenditure of the assessee. He has further argued that the underlying idea of section 4(ii) is to tax the expenditure incurred out of the income or property transferred directly or indirectly to the dependant by the assessee and it would, therefore, be a reasonable construction to apply the said words not only to the case of a Hindu undivided family but to the case of an individual assessee as well. There is no reasonable basis for making a distinction between an assessee, who is an individual and an assessee, who is a Hindu undivided family, which would justify a different treatment of the expenditure incurred by their dependants. An interpretation, which gives rise to a discrimination between the two cases without any reasonable basis, should, therefore, be abandoned as it would be violative of article 14 of the Constitution of India. Mr. Kolah has then suggested that the interpretation, which we seek to put on the provisions, may lead to the consequence of double taxation, since in the assessment of the husband, the wife's expenditure will be included, whereas in the wife's assessment, the husband's expenditure will be included and, consequently, the same expenditure will be taxed twice.

40. Now, we may point out that where the 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 construction, 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, no necessary to discuss in any great detail the several reasons which Mr. Kolah has pressed upon us to abandon the construction which we seek to put on the provisions in question.

41. As to his argument that having regard to the basic scheme of the expenditure-tax, there was no justification why monies spend by the wife and children out of their own resources should be clubbed in the expenditure of the assessee, we may point out that in a taxing statute it is hardly relevant to consider the justification for a certain provision. Moreover, we may point out that it appears that having regard to one of the objects of the Act, viz., to put a check on over-spending, it may as well be that the taxing statute while proceeding to tax the expenditure incurred by the assessee might have though of the expenditure incurred by the normal spending unit of the assessee consisting of the spouse and the minor children. That in amending the provisions of sections 2(g) and 4(ii) the legislature might have had such an intention in mind gets some support from the consequential changes, which have been made in the charging section 3 as well as in section 6, which permits the basic allowance to the assessee. It would be seen from the charging section that in the first proviso the exemption limit from payment of expenditure-tax for incomes below Rs. 30,000 is laid with reference to the combined incomes of the assessee and his dependants. Similarly, the basic allowance in section 6 is again for the assessee and all his dependants together. These are the changes introduced in the Act as consequential to the definition of the word 'dependant' being changed. It is no doubt true that the unit of assessment remains the individual. However, even for the individual the conception of a spending unit appears to have been introduced in the new amendment. As to the fear of double taxation, it may be that theoretically such a possibility may exist in certain cases where the husband and wife may both be individual assessees, but such a result, if at all it comes about, is always capable of being rectified because it is a cardinal principle of all taxation laws whether provided in the particular statute or not that the same item will not be taxed over again and since there is nothing in the Expenditure-tax Act which does away with this principle by any provision, the fear of possible double taxation on the basis of the above construction of the provision cannot be sufficient to persuade us to abandon a construction which is consistent with the language of the provision.

42. Mr. Kolah has invited our attention to a case decided by the Madhya Pradesh High Court in Rajkumarsinghji v. Commissioner of Expenditure-tax See infra 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 assessee who is wholly or mainly dependent on the assessee for support and maintenance that falls with the definition of the word 'dependant' in section 2(g) (i). There is, on the other hand, a decision of the Andhra Pradesh High Court in His Highness Prince Azam Jah v. Expenditure-tax Officer : [1965]55ITR230(AP) which has taken a contrary view. That decision, no doubt, is of a single judge but we find from the Short Notes of Current Cases appearing in Prince Azam Jah v. Expenditure-tax Officer, Andhra Pradesh [1968] I. T. R. 5. - See infra page 364 for full report), of the Notes Section, that the appeal from the decision in His Highness Prince Azam Jah v. Expenditure-tax Officer, Hyderabad : [1965]55ITR230(AP) was heard by a Bench of three judges of the High Court and by a majority 2 : 1, the said decision has been confirmed and the view taken by the learned judge in Prince Azam Jah v. Expenditure-tax Officer, Hyderabad : [1965]55ITR230(AP) , on the interpretation of section 2(g) (i) and section 4(ii) of the Expenditure-tax Act has been confirmed.

43. Having regard to the reasons, which we have already discussed, we are in agreement with the view taken by the Andhra Pradesh High Court in His Highness Prince Azam Jah v. Expenditure-tax Officer, Hyderabad : [1965]55ITR230(AP) and with very great respect we are unable to agree with the view taken by the Madhya Pradesh High Court in Rajkumarsinghji v. Commissioner of Expenditure-tax (See infra).

44. In the result, therefore, our answer to the question is in the affirmative. The assessee will pay the cost of the Commissioner.


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