Judgement

Appeal (No. 70 of 1931) from a judgment of the High Court (August 12, 1929) upon a reference under

s. 66, sub-s. 2, of the Indian Income-tax Act, 1922.

The appeal related to an assessment to income-tax made upon the appellant for the year 1924-5. The question to be determined, shortly stated, was whether any part of a maintenance allowance of Rs. 1100 per month, which the appellant had made to his stepmother pursuant to a decree of the High Court, should be excluded from his assessable income for the year.

The facts appear from the judgment of the Judicial Committee.

The High Court, by a judgment delivered by Rankin C.J. and concurred in by C. C. Ghose and Buckland JJ., held that the payments in question were not a deduction authorized by the Act as to any

Law Rep. 60 Ind. App. 196 ( 1932- 1933) Raja Bejoy Singh Dudhuria v. Commnr. of Income-Tax

of the heads of the assessees income, and that he was therefore entitled to no exemption in respect of them. The judgment is reported at I. L. R. 57 C. 919.

1933. Feb. 17. Pringle for the appellant. The sums paid by the appellant in pursuance of the decree did not form part of his income profits and gains chargeable to tax by s. 3 of the Indian Income-tax Act, 1922. The decree made the maintenance allowance a charge upon the estate, and the appellant was merely the conduit by which the sums in question reached his stepmother. The income taxed by the Indian Income-tax Act is the actual income derived by the assessee from the zamindari Probhat Chandra Barua v. The King-Emperor (( 1930) L. R. 57 I. A. 228, 238, 240.) ; Income-tax Commissioner v. Shaw, Wallace & Co. (( 1932) L. R. 59 I. A. 206, 211, 212.) The system of the Act differs from that of the English Acts in that under the latter the assessee has a right to deduct tax paid by him on payment of a charge. Alternatively, it is submitted that the payments were permissible deductions under the provisions of the Act— namely, s. 9 (iv.), s. 10 (ix.), s. 12, sub-s. 2.

Dunne K.C. and R. P. Hills for the respondent. The payments in question were part of the income profits and gains received by the appellant and were chargeable under s. 3 of the Act. The appellants stepmother was entitled to maintenance before the decree ; the decree made no difference in what was income of the undivided family. Although at the date of the assessment the undivided family consisted only of the appellant, his stepmother was still a member of it and the payments were part of the income of a Hindu undivided family chargeable in terms by s. 3 of the Act. The High Court rightly held that the payments were not deductions allowed by the terms of the Act.

Pringle in reply. When the stepmothers rights were crystallized by the decree there was pro tanto a disruption of the undivided family.

March 10. The judgment of their Lordships was delivered by

LORD MACMILLAN. This appeal relates to the assessment of the taxable income of the appellant for the year 1924-25, under the Indian 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. 1100 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 ladys 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."

In computing the income of the appellant for the year 1923-24 in respect of which, und