Expenditure incurred by a coparcener or other member of a Hindu undivided family out of his separate property is liable to be included in the taxable expenditure of the family if, and only if, it is incurred in respect of an obligation of the family or for the personal requirement of the coparcener or other members of the family which, if not incurred, would have been incurred by the family.

JAGANMOHAN REDDY, C. J.

( 1 ) THE Income-tax Appellate Tribunal has referred the following question of law for our opinion under Sec. 64 (1) of the Expenditure Tax Act, 1957 (hereinafter called "the Act ). viz. "whether on the facts and in the circumstances of the case and on a proper construction of Section 4 (ii) and Sec. 19 of the Expenditure Tax Act 1957 (as applicable for the respective, assessment years) the amount spent on the foreign education of Sri Mallikarjuna Prasad was rightly excluded from the taxable expenditure of the family for the respective assessment years. "

( 2 ) THE assessee, Rajah of Challapalli, was assessed to expenditure tax for the year 1958-59 to 1961-62, for which the relevant accounting years were the financial years immediately proceeding those years. While so assessing him the Expenditure Tax Officer included sums of Rupees 15439, 18080, 14930 and 14750 respectively in the four accounting years in question, being expenses incurred by one of his sons, Sri Mallikarjuna Prasad, as expenditure of the assessees family for the said years. The asessee contended that his son had his own sources of income and that though the money was defrayed in the first instance by the assessee, it was subsequently debited to the sons account, as such, the inclusion was not justified. It was found that the karta of the family, Sri Sivarama Prasad, the assessee, was the holder of the estate of Challapalli, an impartible estate within the meaning of the Madras impartible Estates Act, 1904, that the said estate vested in the Government of Madras under the Estates (Abolition and Conversion into Ryotwari) Act, 1948, as from 7-9-1949, and as a result of such vesting, the government of Madras was under a liability to deposit certain amounts of compensation with the Estates Abolition Tribunal, and these amounts were payable to such persons and in such manner as was prescribed under the Abolition Act and the rules made thereunder. It was averred by the assessee that by virtue of sub-sector (6) of Section 45 of the abolition Act, the amount was payable not to the family as such, but to certain persons described as sharers, maintenance holders and creditors under the said Act; and inasmuch as the Karta and his three sons were sharers who were entitled only to an aliquot share in the compensation amount deposited with the Tribunal after meeting the claims of the creditors and maintenance holders, the share of the compensations was the individual property of the son. The Department, on the other hand, contended that the impartible estate was a property of the joint family and that the compensation amount constituted joint family property also; as such, the fiction contained in Section 44 did not have the effect of converting this joint family property into the individual property of the various coparceners. The Tribunal found that the several adjustments were carried out in the books of the joint family styled "tenants-in-common account," and to this account was crafted the amounts received by sale of agricultural lands, implements, amounts derived by was of lease etc. To the same account were debited the several expenses commonly incurred, such as expenses o agricultural and the like as also expenses incurred for foreign education of Mallikarjuna Prasad. At the end of the year, the net credit, excluding foreign education expenses of Mallikarjuna Prasad, was divided into 4 equal shares and transferred to the individual accounts of the Karta and his three sons. The foreign education expenses were debited to the account of Mallikarjuna Prasad. It was also pointed lout that in the year ending 31-3-1959, when loans were advanced to Challapalli Sugars, in the individual names of the three sons, they were debited only to the share of the three sons and not to be father. So also in the year ended 31-3-1960, personal chitta balances were debited to the accounts of the individual members respectively and not all the members equally. The Ex

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