Taxable expenditure of HUF depends on statutory definition of dependent and transfer-based inclusion under the Act.

Under the Expenditure-tax Act, 1957, a Hindu undivided family is treated as a separate taxable unit, and the statutory definition of "dependent" must be applied as written. Expenditure incurred by the karta from his separate property for his own purposes was not attributable to the family and was not includible in the family's taxable expenditure under section 4(i). By contrast, expenditure met out of trust property settled by the family for the children was includible: if the trustees spent the income on the children's needs, it fell within section 4(i), and if the children spent income received from the trust property, it was covered by section 4(ii) as expenditure from property transferred to dependants.

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Issues: (i) Whether expenditure incurred by the karta of a Hindu undivided family out of his separate property for his own purposes was includible in the family's taxable expenditure under section 4(i) of the Expenditure-tax Act, 1957. (ii) Whether expenditure incurred out of trust property settled by the family for the children was includible in the family's taxable expenditure under section 4(i) or section 4(ii) of the Expenditure-tax Act, 1957.

Issue (i): Whether expenditure incurred by the karta of a Hindu undivided family out of his separate property for his own purposes was includible in the family's taxable expenditure under section 4(i) of the Expenditure-tax Act, 1957.

Analysis: The Act treated a Hindu undivided family as a separate taxable unit and defined "dependent" in a manner that expressly excluded the karta. The charging and inclusion provisions in section 4(i) covered expenditure by another person for the obligation or personal requirement of the assessee or its dependants, but the statutory definition did not justify treating the karta's personal expenditure from his own property as expenditure of the family merely because the family might otherwise have had to meet it. The context did not warrant giving "dependent" a special meaning inconsistent with the definition, and no basis existed to include the karta's personal expenditure in the family's taxable expenditure.

Conclusion: The expenditure incurred by the karta from his separate property was not includible in the taxable expenditure of the Hindu undivided family.

Issue (ii): Whether expenditure incurred out of trust property settled by the family for the children was includible in the family's taxable expenditure under section 4(i) or section 4(ii) of the Expenditure-tax Act, 1957.

Analysis: If the trustees spent the trust income on the children's maintenance, education, advancement, religious ceremonies, or welfare, the expenditure fell within section 4(i) as expenditure incurred by another person for the dependants' obligations or requirements. If, instead, the children themselves incurred the expenditure after receipt of the trust income, it still fell within section 4(ii), because the property had been transferred to the dependants by the assessee and expenditure by the dependant from such property was expressly covered. The provision was not confined to cases where the spender and the beneficiary were different persons.

Conclusion: The expenditure out of the trust property was includible in the taxable expenditure of the Hindu undivided family.

Final Conclusion: The High Court's view was modified. The expenditure incurred by the karta from his separate estate was excluded, while the expenditure out of the trust estate was held includible, subject to proper adjustments under the Act.

Ratio Decidendi: Where a statute defines "dependent" expressly and the context does not require a contrary meaning, that definition must be applied as written; expenditure by a karta from his separate property for his own purposes is not attributable to the Hindu undivided family unless the statute clearly brings it within the charging or inclusion provisions, but expenditure by or from property transferred to dependants may be included where the statutory language so provides.

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