1. This is a reference made at the instance of the assesseeunder Section 256(1) of the Income-tax Act, 1961.
2. The question of law referred is:
'Whether, on the facts and in the circumstances of the case, the assessee was entitled to the rebate contemplated under Section 87(1)(a) of the Income-tax Act, 1961, in respect of the sum of Rs. 6,000 being the insurance premium on the policy of the life of the assessee's husband paid not by the assessee but by the assessee's husband ?'
3. The assessment year with which we are concerned is 1964-65. The assessee is P. K. Yeshodamma, wife of Shri P. Narayanan Vaidyar. The assessee and her husband were partners in a firm called Madhava Pharmaceutical Laboratories, Ernakulam. Shri P. Narayanan Vaidyar had taken out an insurance policy on his own life and the premium in regard to the same amounted to Rs. 6,000 and that was paid by him. In the assessment year 1964-65, the Income-tax Officer included in the income of the wife the share of the income of the husband from the aforesaid firm under Section 64(i) of the Income-tax Act, 1961, by virtue of the Explanation thereto, which provides that where both the husband and the wife are partners in the same firm, the spouse to be assessed in respect of other's share of income from the firm is the one whose total income (excluding such share of the income) is greater than that of the other. Though the share of the income of the husband from the firm was included in the assessee's share of income from the firm, the Income-tax Officer did not grant the rebate claimed by the assessee under Section 87(1)(a) of the Income-tax Act, 1961, in respect of life insurance premium of Rs. 6,000 paid by the husband for securing an insurance on his own life. The Appellate Assistant Commissioner to whom an appeal was preferred by the assessee agreed with the Income-tax Officer and said that in order to qualify for rebate under Section 87(1)(a) the premium should have been paid by the assessee herself. The Appellate Assistant Commissioner also said that in a separate assessment order made on the assessee's husband in respect of his income other than the share of his income from the aforesaid firm, the Income-tax Officer had allowed due rebate in respect of the premium paid by him on the policy. The Income-tax Appellate Tribunal to which an appeal was preferred by the assessee agreed with the view of the authorities below and dismissed the appeal.
4. The question has to be decided on the basis of Section 87(1)(a) of the Income-tax Act, 1961. This section has been omitted with effect from 1st April, 1968, by the Finance (No. 2) Act of 1967. The section reads as follows:
' 87. (1) Subject to the provisions of this section, the assessee shall be entitled to a deduction, from the amount of income-tax on his total income with which he is chargeable for any assessment year, of an* amount equal to the income-tax calculated at the average rate of income-tax on the following sums, namely :--
(a) where the assessee is an individual, any sums paid in the previous year by the assessee out of his income chargeable to tax,-- (i) to effect or to keep in force an insurance on the life of the assesseeor on the life of the wife or husband of the assessee;...... '
5. From the terms of the section it is clear that it is only the income-tax calculated at the average rate of income-tax on the sum paid by the assessee to effect or keep in force an insurance on the life of the assessee or on the life of the wife or the husband of the assessee that can be deducted from the income-tax on his total income chargeable for the assessment year. In other words, to qualify for the rebate permissible under the section the premium must have been paid by the assessee and not by her husband on his own policy. The contention that the income of the husband was included in the income of the assessee, and if the husband had been assessed separately he would have become qualified to get the rebate of income-tax in respect of the insurance premia paid by him has no merit, for the reason that Section 87 is explicit on the point. It is not possible to interpret the section in such a manner as to give a rebate in respect of the income-tax calculated at the average rate on the sum paid by the husband on a policy on his own life. Counsel for the assessee referred to the decision in V. D. M. RM. M. RM. Muthia Chettiar v. Commissioner of Income-tax,  74 I.T.R. 183;  3 S.C.R. 715 (S.C.) which held that there was no statutory obligation on an assessee to include in his return the income of the wife or minor child, which was includible in the total income under Section 16(3) of the Income-tax Act, 1922, and said that the income that is assessed is not only the income of the assessee, but also the income of her husband ; and that the income-tax calculated at the average rate of income-tax on the sum paid as premia by the husband to keep in force the policy on his life has to be deducted in computing the tax payable by the assessee. We are unable to agree with this contention. It is doubtful whether the decision has any force in view of the form of return prescribed by Rule 12, which expressly requires the individual to show in his or her return the income of the spouse or the minor child which falls within Section 64. As we have already said, the section which permits the deduction is clear that it is the income-tax calculated at the average rate on the amount of the premium paid by the assessee to keep alive a policy on her life or the life of her husband that can be deducted from the income-tax on the total income of the assessee.
6. Section 64(1) of the Act provides as follows :
' In computing the total income of any individual, there shall beincluded all such income as arises directly or indirectly-
(i) to the spouse of such individual from the membership of thespouse in a firm carrying on a business in which such individual (sic)partner ;......... '
7. It was contended that the sub-section is based on the fiction that the husband and wife are one and the logical result of the fiction is to treat the premium paid by the husband on the policy on his life as that paid by the assessee, and therefore, the premium, in the eye of the law, can be treated as premium paid by the assessee to keep alive the policy on the life of the husband. We think the argument is fallacious for the reason that the fiction enacted by the sub-section is only for a specific purpose ; and that it cannot be extended to other purposes. The fiction is only that the income of one of the spouses received from a particular source will be treated as the income of the other spouse. Nor are we able to find any substance in the argument that the husband is ' the assessee ' mentioned in Section 87(1)(a) merely because the definition of the word 'assessee' in Section 2(7) read with Section 65 might include him. We think that, in the context of Section 87(1)(a), the words ' the assessee' can only mean the person who is bound to file the return of the income and who is actually assessed to tax by the Income-tax Officer, namely, the wife, here.
8. We therefore, answer the question referred in the negative. We make no order as to costs.
9. A copy of this judgment will be sent to the Income-tax Appellate Tribunal under the seal of the High Court and the signature of the Registrar.