Under section 66(1) of the Indian Income-tax Act, 1922, the Income-tax Appellate Tribunal, Bombay, has referred to this court for its opinion the following question of law :
'Whether, in the facts and circumstance of this case, the income from the property transferred to the assessees wife for a consideration of rupees one lakh could be assessed in the hands of the assessee under section 16(3) of the Act ?'
The material facts, as disclosed in the statement of the case, are these. The assessment year is 1961-62, the corresponding account year being 1960-61 ending on 31st March 1961. The assessee is a Muslim individual. In the course of the assessment proceedings the question arose whether the income from certain house property should be included in the assessable income. The assessee claimed that in April, 1960, he had verbally transferred the property to his wife in lieu of the dower debt payable to her. The assessee stated that, at the time of his marriage in 1930, the dower was fixed at Rs. 10,000 but, in consultation with his legal adviser, he enhanced the amount to rupees one lakh sometime in February or March, 1960. The Income-tax Officer held that there was no evidence of existence of any dower debt and that the transaction was really a gift without consideration. In appeal, the Appellate Assistant Commissioner took the same view and held that the claim that the transfer was made in lieu of dower was really an afterthought. The Tribunal, however, found that the dower was originally settled at Rs. 10,000, that it was increased to rupees one lakh sometime in April 1960, that the property was transferred to the wife in consideration of the dower debt of rupees one lakh thus due to her and that, therefore, the provisions of section 16(3) of the Act were not attracted.
In the application made under section 66(1) of the Act, the department desired three question to be referred to this court. However, as already indicated, the Tribunal referred only one question for the opinion of this court. That question, as formulated by the Tribunal, does not pointedly bring out the real issue in controversy but we think it is sufficiently wide to include within its ambit the following two questions :
'(i) Whether, in the facts and circumstances of the case, there could be, in law, an oral transfer of the property in lieu of rupees one lakh due as dower debt ?
(ii) If so, whether the income from the property is liable to be included in assessable income under section 16(3) of the Act.
For the purpose of this reference, we accept the Tribunals conclusions of fact. But it is plain that there cannot be oral transfer of immovable property worth a lakh of rupees in lieu of a dower debt of rupees one lakh. Such a transaction is a Hiba Biliwaz and requires a registered document Mahabir Prasad v. Mustafa Husain and Zainab Bi v. Jamalkhan. In the absence of any such document, the intended transfer was ineffective and the title to the property still resided in the assessee. That being so, no question can arise of invoking section 16(3) of the Act and the income from the property continues to be, as before the intended and ineffective transfer, includible in the assessees income.
We would, therefore, answer the question referred to us in the manner indicated above and direct that the assessee shall pay all costs of this reference. Hearing fee Rs. 100.