Earmarked family settlement payment qualifies for expenditure-tax exemption as a benefit for another person under section 5(j).

A specifically earmarked sum paid pursuant to a binding settlement for a daughter's marriage was treated as expenditure by way of a settlement for the benefit of another person and therefore fell within the exemption in section 5(j) of the Expenditure-tax Act, 1957. The arrangement imposed an overriding obligation to apply the amount for that purpose, and it did not matter that the settlement was not a formal trust. The limited deduction under section 6(1)(c) did not affect the separate exemption under section 5(j), so the amount was not includible in taxable expenditure.

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Issues: Whether the sum of Rs. 75,000 paid for the marriage of the assessee's daughter was exempt from expenditure-tax under clause (j) of section 5 of the Expenditure-tax Act, 1957 as expenditure incurred by way of, or in respect of, a gift, donation or settlement on trust or otherwise for the benefit of another person.

Analysis: The payment arose out of a binding settlement recorded by the Government of India through the Raj Pramukh, under which a specified amount was set apart from the sale proceeds of the assessee's property for the marriages of his daughters. The arrangement was not a mere voluntary outlay; it created an overriding obligation to apply the earmarked amount for the benefit of the daughter concerned. Even if the arrangement were not treated as a formal trust, it was still a settlement otherwise than on trust for the benefit of another person and therefore fell within the language of section 5(j). The limited deduction under section 6(1)(c) did not detract from the separate exemption available under section 5(j).

Conclusion: The payment of Rs. 75,000 was exempt under section 5(j) and was not includible in the assessee's taxable expenditure.

Ratio Decidendi: A specifically earmarked amount applied pursuant to a binding settlement for the benefit of another person falls within the exemption for a settlement on trust or otherwise under section 5(j) of the Expenditure-tax Act, 1957.

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