JUDGMENT
S.V. Maruthi, J.
The assessee is an individual. The valuation date for the assessment year 1976-77 was 31-3-1976. The assessee filed return on 23-6-1976 declaring the net wealth Rs. 42,090. In the earlier assessment years the assessee paid a Mehar amount of Rs. 1,20,000 to his wife with which she purchased house properties in Kachiguda and Khairatabad. The value of those properties were estimated at Rs. four lakh by the Wealth Tax Officer and it was added to the assessee’s wealth under section 4(1)(a) of the Wealth Tax Act on the ground that Rs. 1,20,000 had not been transferred to the above mentioned wife of the assessee for adequate consideration or in connection with an agreement to live apart. The Wealth Tax Officer computed the wealth at Rs. 4,37,643. On appeal the order of assessment was set aside and the appellate authority directed the Wealth Tax Officer to redo the assessment afresh as there is nothing on record to show that the assessee had not complied with the notices under section 16(2) or (4) of the Wealth Tax Act. The assessee being aggrieved preferred Second Appeal to the Tribunal. The Tribunal relied on the wealth tax assessment for the assessment year 1975-76 in the case of the very assessee where it was held that the profits acquired by the assessee’s wife from out of Rs. 1,20,000 paid towards Mehar by the assessee cannot be included under section 4(1)(a)(i) of the Wealth Tax Act. Holding as above, the appeal was allowed. At the instance of the revenue the following questions were referred :
Whether on the facts and in the circumstances of the case, the Appellate Tribunal is correct in holding that an amount of Rs. 4 lakh being the fair market value of properties transferred by the assessee to his wife, is not includible in his wealth under section 4(1)(a) of the Wealth Tax Act?
If the answer to the above question is in the affirmative, whether the Appellate Tribunal is correct in law in omitting to sustain the inclusion of at least Rs. 1,20,000 in the net wealth of the assessee representing the debt due from his wife?
Under Mohammedan Law Mehar or dower is a sum of money or other property which the wife is entitled to receive from the husband in consideration of the marriage. Therefore, payment of Rs. 1,20,000 is towards Mehar. Since, it is a consideration for the marriage, it can be paid at any time either at the time of marriage or after marriage.
2. Under section 4(1)(a) of the Wealth Tax Act: In computing the net wealth of an individual, there shall be included, as belonging to that individual, the value of assets which on the valuation date are held by the spouse of such individual to whom such assets have been transferred by the individual directly or indirectly otherwise than for adequate consideration or in connection with an agreement to live apart.
3. A reading of section 4(i)(a) makes it clear that only that asset which was transferred to his spouse in connection with agreement or the consideration for such transfer is inadequate. In this case Rs. 1,20,000 was transferred to the wife not in connection with the agreement but on account of an obligation, viz., payment of Mehar to the wife under the Muslim Law as it is consideration of the marriage itself. Therefore, we are of the view that the amount of Rs. 1,20,000 cannot be included in the net wealth of the assessee under section 4(1)(a) as it has no application.
4. In the light of the above, we answer the question referred to above in the affirmative and against the Revenue.