Deductibility of maintenance charged on family assets: an express, enforceable charge qualifies as an allowable HUF deduction.

Whether a separate maintenance obligation charged on movable and immovable family property is deductible from HUF income under section 9(1)(iv) is answered affirmatively: an express, enforceable charge created by the karta when he was sole owner constitutes a genuine legal liability binding on family assets and hence qualifies as a deductible liability for the assessee Hindu undivided family. Subsequent births or potential rights of sons to repudiate the charge do not nullify the liability absent successful avoidance; accordingly the agreed maintenance secured by charge is allowable as a deduction.

---

---

Issues: Whether separate maintenance awarded to the wife of the karta by agreement and charged on movable and immovable properties is a permissible deduction from the income of a Hindu undivided family for computing taxable income.

Analysis: The deed of separation created an express charge of Rs. 6,000 per annum on the properties described as belonging to the first party (the karta). At the time of creating the charge the karta was sole owner of the entire property and competent to create a charge binding on the family assets. The subsequent birth of children by a second wife did not nullify or limit the charge; while the sons might have the right to repudiate the charge by establishing facts to that effect, no such avoidance was effected. The obligation to maintain the spouse is a legal liability which the agreement expressly crystallised and recognised. Under section 9(1)(iv) of the Income-tax Act, 1922, a liability of this character, genuinely charged on family assets and enforceable, qualifies as a deductible liability for the assessee Hindu undivided family.

Conclusion: The separate maintenance of Rs. 6,000 per annum, secured by charge on the movable and immovable properties, is a permissible deduction from the income of the Hindu undivided family under section 9(1)(iv) of the Income-tax Act, 1922; the question is answered in the affirmative and the assessee is entitled to the deduction.

---