Law:

Section:

Section 64(1)(iii) [now section 64(1)(iv)] of the Income-tax Act, 1961 - Transfer of assets - For benefit of spouse or minor child - Whether, where a Mohammedan transfers a property to his wife in lieu of deferred dower even before dissolution of marriage by death or divorce, such transfer would be for adequate consideration not attracting the clubbing provisions - Held, yes Muslim law - Deferred dower - Nature of - Whether a Muslim husband is free to pay deferred dower to his wife even before dissolution of marriage by death or divorce - Held, yes - Whether deferred dower is a contingent debt - Held, no Facts The assessee, a Mohammedan, transferred a property to his wife in lieu of deferred dower in the year 1928, which was about one year after their marriage. For the relevant assessment years 1967-68 to 1969-70, when the question of including the income from this property in his hands arose, the assessee claimed that inasmuch the said property had been transferred to his wife as far back as 1928 in lieu of deferred dower, that is, for adequate consideration, the income therefrom could not be included in his income under section 64(1)(iii). The ITO rejected the assessee's claim. The Tribunal, on second appeal, upheld the order of the ITO relying upon the Andhra Pradesh High Court decision on CWT v. Khan Saheb Dost Mohd. Alladin [1973] 91 ITR 179 where it had been held that it was not open to a Muslim husband to pay deferred dower to his wife at any point of time earlier than the dissolution of the marriage by death or divorce. On reference, the assessee contended before the Full Bench that the said decision did not represent the correct position in Muslim law and required reconsideration. Held In Muslim law, dower is treated as a sum agreed in consideration of the marriage. Marriage is a civil contract and dower is a matter of agreement between the parties; it can be agreed upon at the time of marriage; it can also be agreed up after the marriage; it can be enhanced after the marriage by mutual consent, or relinquished, as the case may be, by the wife. It is open to the parties to agree that the dower fixed shall be partly 'prompt' and partly 'deferred'; they…

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