Dependants under the Expenditure-tax Act require actual dependence; independent spending by spouse or minor child is not taxable to the assessee.

Under the Expenditure-tax Act, 1957, the term "dependant" in section 2(g)(i) is construed according to ordinary dependence, so a spouse or minor child qualifies only if wholly or mainly dependent on the assessee for support and maintenance. Expenditure incurred by such person from independent income or property is not includible in the individual assessee's taxable expenditure under section 4(ii). That provision applies only where the dependant's expenditure is funded from income or property transferred directly or indirectly by the assessee, and the same principle applies to both individual assessees and Hindu undivided families. A broader reading would produce unreasonable and discriminatory results.

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Issues: Whether, under the Expenditure-tax Act, 1957, the word "dependant" in section 2(g)(i) included a wife or minor child irrespective of whether they were dependent on the assessee, and whether expenditure incurred by such wife or minor child out of their own income or property could be included in the individual assessee's taxable expenditure under section 4(ii).

Analysis: The definition of "dependant" in section 2(g)(i) was read as retaining the ordinary meaning of dependence, so that the spouse or minor child of an individual assessee qualified as a dependant only if wholly or mainly dependent on the assessee for support and maintenance. The placement of punctuation could not govern construction where it would produce an unreasonable result. The charging scheme treated the individual, not the individual and spouse as a single unit, and the interpretation adopted by the Tribunal would create the absurd consequence of double taxation on independent expenditure of spouses. Section 4(ii) was held to apply to expenditure incurred by dependants only where it was out of income or property transferred directly or indirectly by the assessee, and this applied equally to an individual assessee and a Hindu undivided family. A contrary construction would also be inconsistent with Article 14 of the Constitution of India.

Conclusion: The word "dependant" in section 2(g)(i) does not include a spouse or minor child who is not dependent on the assessee, and expenditure incurred by such person out of independent income or property cannot be included in the individual assessee's taxable expenditure under section 4(ii). The question was answered in the negative, in favour of the assessee.

Final Conclusion: The reference was answered by holding that only expenditure of a spouse or minor child who is wholly or mainly dependent on the individual assessee, or expenditure met from property or income transferred by the assessee, can be brought to tax in the assessee's hands.

Ratio Decidendi: In construing a taxing statute, a spouse or minor child is a dependant only if dependency is shown; expenditure of such person from independent resources is not the assessee's expenditure, and section 4(ii) applies to dependants' expenditure only to the extent it is funded by income or property transferred by the assessee.

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