Hindu Undivided Family assessment: maintenance payments to a member are not deductible from the joint family's taxable income.

Where a Hindu undivided family is assessed as a unit, income from house property is computed as the aggregate income of the family and taxed to the assessee as a whole; the HC upheld the officer's computation of the house property income. Payments of Rs. 165 per mensem to a widow-member under a maintenance decree constitute distribution/application of family income, not a diversion prior to assessment, and therefore are not deductible from the HUF's assessable income; the HC answered the reference in favour of the Revenue.

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Issues: (i) Whether the Income Tax Officer correctly computed the income from the house property at Rs. 4,767; (ii) Whether the assessee (a Hindu undivided family) is entitled to deduct Rs. 165 per mensem paid to the widow (Bai Nambai) as maintenance under the consent decree from the computed income.

Issue (i): Whether the Income Tax Officer correctly computed the income from the house property at Rs. 4,767.

Analysis: The assessment is on the Hindu undivided family which includes the widow as a member; the computation of income from the house property relates to the aggregate income of the joint family unit and is to be treated as the income of the assessee as a whole.

Conclusion: In favour of Revenue.

Issue (ii): Whether the assessee is entitled to deduct Rs. 165 per mensem paid to Bai Nambai on account of maintenance under the consent decree from the computed income.

Analysis: Where the assessee is a Hindu undivided family, sums paid to a member of that family in her capacity as a widow remain part of the distribution or application of the family income; a maintenance decree fixing the amount does not convert the payment into an expenditure deductible from the joint family income. The decision in which an individual assessee was allowed a deduction (where the income was diverted before reaching the individual) does not apply to an assessment on the joint family as a unit.

Conclusion: In favour of Revenue.

Final Conclusion: The reference is answered for the Revenue: the computation of income from house property at Rs. 4,767 is correct and the payment of Rs. 165 per mensem to the widow under the decree is not deductible from the Hindu undivided family's assessable income.

Ratio Decidendi: Where a Hindu undivided family is assessed as a unit, amounts paid to a member of the family in her capacity as such (including maintenance fixed by decree) are not deductible from the family's aggregate income because the payment does not constitute a diversion of income prior to its assessment on the family.

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