1966 (12) TMI 8 - HC - Income Tax

Expenditure Tax Act, 1957 - Expenses for marriage metout of cash presents received by parents - such expenses cannot be treated as an expenditure of the family for the purposes of expenditure tax.

Issues Involved:
1. Legal liability of the Hindu Undivided Family (HUF) to perform the marriage of Snehalata.
2. Whether the expenditure of Rs. 1,00,795 was properly treated as incurred by the HUF.
3. Applicability of section 4(i) of the Expenditure-tax Act to the expenditure incurred by D. C. Shah and Anasuya Bai.

Issue-wise Detailed Analysis:

1. Legal Liability of the HUF to Perform the Marriage of Snehalata:
The court examined whether the Hindu Undivided Family (HUF) had a legal obligation to perform Snehalata's marriage. It was determined that the expenses of a daughter's marriage are traditionally a legitimate charge on the family estate under Hindu law. The court noted that both the undivided family and the parents of the bride are under a legal obligation to meet the legitimate expenses of the marriage. The court clarified that the Hindu Adoption and Maintenance Act of 1956, which imposes such a liability on parents, does not supersede the pre-existing liability of the joint family under ordinary Hindu law. Thus, both the HUF and the parents are obligated to meet the marriage expenses.

2. Whether the Expenditure of Rs. 1,00,795 was Properly Treated as Incurred by the HUF:
The court analyzed whether the expenditure of Rs. 1,00,795 for Snehalata's marriage should be considered as incurred by the HUF. The original assessing authority's view that the presents received by D. C. Shah and Anasuya Bai were for the HUF was rejected by the Appellate Commissioner, who found no evidence to regard the receipts as on account of the family. The Tribunal, however, held that the expenditure should be included in the HUF's taxable expenditure, considering the family's financial position and the absence of any objection from family members. The court found that the Tribunal's findings were composite, involving both fact and law, and concluded that the expenditure was met out of the presents received by D. C. Shah and Anasuya Bai, not from the joint family funds. Thus, the expenditure cannot be treated as incurred by the HUF.

3. Applicability of Section 4(i) of the Expenditure-tax Act:
The court examined whether the expenditure incurred by D. C. Shah and Anasuya Bai could be assessed in the hands of the HUF under section 4(i) of the Expenditure-tax Act. Section 4(i) includes any expenditure incurred by another person in respect of any obligation of the assessee in the taxable expenditure of the assessee. The court noted that both the HUF and the parents were obligated to meet the marriage expenses. However, since the expenditure was met from the presents received by the parents in their individual capacity, it should be regarded as incurred in discharge of their own obligation, not the HUF's obligation. Therefore, section 4(i) does not apply to the facts of this case.

Conclusion:
1. The legal liability to meet the expenses of Snehalata's marriage rests on both the HUF and her parents, D. C. Shah and Anasuya Bai.
2. The expenditure of Rs. 1,00,795 cannot be treated as incurred by the HUF.
3. The expenditure incurred by D. C. Shah and Anasuya Bai cannot be treated as incurred by the HUF under section 4(i) of the Expenditure-tax Act.

The assessee was awarded the costs of the reference, with an advocate's fee of Rs. 250.

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