BEJOY SINGH DUDHURIA Vs. COMMISSIONER OF INCOME-TAX, CALCUTTA

JUDGEMENT

(1.) This appeal relates to the assessment of the taxable income of the appellant for the year 1924-25, under the Income-tax Act, 1922. On the death of his father in 1894 the appellant succeeded to the family ancestral estate. His stepmother, who had survived his father, subsequently brought a suit for maintenance against him in the High Court at Calcutta. The suit was compromised and a decree was by consent pronounced directing the appellant to make a monthly payment of Rs. 1,100 to his stepmother, which he has since regularly done. It is unfortunate that the decree has not been made available to their Lordships. The Chief Justice (Rankin) however in the judgment now under review states that "it was not disputed that the lady's maintenance was a legal liability of the Raja (the appellant) arising by reason of the fact that the Raja is in possession of his ancestral estate, that it is payable out of such estate and that this Court had declared that the maintenance was a charge thereon in the hands of the Raja."

(2.) In computing the income of the appellant for the year 1923-24 in respect of which, under S. 3 of the Act, the appellant was chargeable with tax for the year 1924-25, the income-tax officer allowed a deduction of Rs. 9,000, being three-fourths of the total sum of Rs. 13,200 which the appellant had paid in the year in question to his stepmother under the decree of the High Court. The whole sum of Rs. 13,200 was not deducted inasmuch as approximately a quarter of the appellant's income was under S. 4 (3) (viii) exempt from tax as being derived from agriculture; a quarter of the payment was accordingly attributed to this untaxed income. The appellant's stepmother on the other hand was assessed in respect of the Rs. 13,200 received by her as being "salary"within the meaning of S. 7 (1), and this assessment was confirmed by the Assistant Commissioner. On her appealing to the respondent, the Commissioner of Income-tax, Bengal, he called up for review the assessment of the present appellant, under S. 33 of the Act, and intimated that he desired to hear him on the question whether the sum paid by him for the maintenance of his stepmother should be allowed as a charge on his estate for the purposes of income-tax assessment.

(3.) Thereafter, on 24 March 1926, the respondent cancelled the assessment on the appellant's stepmother on the ground that the payments to her were not of the nature of a salary within the meaning of the Act, but on the contrary were paid to her in virtue of her right of maintenance as a member with the appellant of a Hindu undivided family of which the appellant was manager. Incidentally their Lordships note that a Hindu undivided family is included under the definition of "person"in S.2(9) and is a unit of assessment under S. 3, while under S. 14 (1) no tax is payable by an assessee in respect of any sum which he receives as a member of a Hindu undivided family. On the same date, viz., the 24 March 1926, the respondent issued another order reviewing the appellant's assessment, striking out the deduction of Rs. 9,900 which he had been allowed and directing an amended assessment to be made on the appellant. The ground of the order was that the payments to the stepmother were "the maintenance expenses of a member of the Hindu undivided family of which the Raja is the manager."