CET Vs. KRISHNA T S

JUDGEMENT

(1.) THIS reference involves assessment years 1960-61 and 1961-62, and arises under Section 25(1) of the Expenditure Tax Act, 1957. The assessee, who is an individual, was charged to tax on his expenditure for the periods ended March 31, 1960 and 1961, which included the expenditure incurred by his wife and minor son during the years. For the first year, the expenditure of the wife was Rs. 10,324 and of the minor son Rs. 3,944 and for the next year it was Rs. 2002 for the wife and Rs. 29,439 for the minor son. It is common ground that the wife and the minor each had during the year her or his own properties and derived income there from. The Expenditure Tax Officer considered that both of them were dependents of the assessee within the meaning of Section 2 (g) (i) and that as such Section. 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 dependents 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:

(2.) THE Expenditure Tax Act provides for levy of tax on expenditure. Nothing seems to turn on the history of this Act and no reference need be made to it. THE charge is in respect of the expenditure incurred by any individual or Hindu undivided family in the previous year. Although the charge is in respect of the expenditure incurred by the assessee, expenditure has been defined to include any amount which under the provisions of the Act is required to be included in the taxable expenditure. THE last phraseology, viz., 'taxable expenditure' means for the purpose of the Act 'total expenditure of the assessee liable to tax under the Act." We are not on the broader question whether the charge will properly lie on the expenditure not incurred by the assessee, but required to be included in the taxable expenditure. THE charging section itself is subject to the other provisions contained in the Act. Section 4 requires, in the contingencies mentioned, inclusion of certain taxable expenditure in the expenditure of the assessee. Sections 5 and 6 provide for exemptions and deductions. THE only two kinds of assessee comprehended by the Act are the individual and the Hindu undivided family. But, in each of these cases, a dependent plays a part, and for purposes of assessment to expenditure tax. the individual or the Hindu undivided family, along with the dependent concerned, is taken as a unit in giving effect to the principle of aggregation.