Income Tax Appellate Tribunal - Mumbai
Rishad S. Moloobhoy vs First Wealth-Tax Officer on 27 February, 1987
Equivalent citations: [1987]21ITD373(MUM)
ORDER
A.V. Balasubramanyam, Judicial Member
1. This appeal by the assesses raises the question whether Mehr payable by a husband is a debt owed to be entitled to deduction in the computation of net wealth.
2. The assessee is a Shia Muslim. He married one Shehnabegum on 27-4-1977 in accordance with Shia faith at Northwood, England. Rs. 1,50,000 was the amount fixed as dower or Mehr for the marriage. In the wealth-tax assessment for 1979-80 (the valuation date being 31-12-1978), the assessee claimed this amount as an allowable liability in the return. The WTO treated this as a contingent liability and, therefore, he did not allow it. The assessee appealed and the AAC held that it was a deferred Mehr and the liability was not allowable. Aggrieved by the same, the assessee is in appeal.
3. The learned counsel for the assessee contended that the amount of Rs. 1,50,000 payable by the assessee in this case is a prompt dower and as such allowable. The authorities below have reached the conclusion that it is a deferred Mehr. This is challenged by Sri Italia. Reliance was placed upon some observations of the Andhra Pradesh High Court in the case of CWT v. Khan Saheb Dost Mohd. Alladin [1973] 91 ITR 179 in support of his submission that prompt dower is a debt. On behalf of the revenue, it was stated that there is no evidence to indicate that the wife has demanded the amount and that till such a time the demand is made, there was no liability outstanding. On this premise, it was stated that there was no liability to be eligible for deduction.
4. The assessee is a Shia Muslim whose marriage with Shehnabegum was performed according to Islamic faith. Under Islamic Law, marriage is not a sacrament but a civil contract. Mehr or dower is the amount or other property which the wife is entitled to receive from the husband in consideration of the marriage. While a prompt dower is payable by a husband on demand, a deferred dower is payable only on dissolution of marriage by death or divorce-See Articles 285 and 290, Principles of Mohmedan Law by Mulla (Sixteenth Edition, pp. 270-272).
5. The certificate of marriage issued by Shia Ithna-Asheri Jamath of U.K. is at page 1 of the compilation. It evidences that the Nikah was performed at Northwood on May 27, 1977, according to Shia faith and the amount fixed as dower was Rs. 1,50,000. The point is whether this is a prompt dower or a deferred dower.
6. There seems to be no basis to reach a conclusion that Mehr fixed in this case is a deferred one. The finding of the authorities below is not at all based upon any facts. The criticism of the AAC is-
As already stated above, since the Mehr is paid or payable without adequate consideration, therefore, even if it is paid to the wife it will be deemed to be the property of the husband in view of the WT provisions contained in Section 4(1)(a).
The above is a wrong statement of law. Mehr or dower is a sum of money which a wife is entitled to receive from the husband in consideration of the marriage and this is the principle in the Islamic Law. When once the amount is payable for adequate consideration, Section 4(1) (a) of the WT Act has no application at all.
7. The certificate of marriage issued by Shia Ithna-Asheri Jamath of UK no doubt does not expressly say that this was a prompt dower. But it is equally not possible to hold on the basis of that certificate that it was a deferred dower. When it is not specified at the time of marriage as to what portion is to be treated as prompt and what portion is to be treated as deferred, then, according to Shia law, the rule is to treat the whole as prompt- see Article 290(2), Mulla's Principle of Mohmedan Law (Sixteenth edition). In fact, a dower must be presumed to be prompt unless the payment thereof is, either wholly or in parts, postponed expressly. Though there is divergence of judicial opinion on this point in regard to Sunnies there is no difficulty so far as Shias are concerned. Here, there is no scope to hold that this is a deferred dower. In the circumstances of this case, we record a finding that Rs. 1,50,000 payable by the assessee is a prompt dower.
8. It makes no difference whether the wife had made demand or not. The liability arises the moment the amount is fixed. Only for the purpose of limitation, time runs when the dower is demanded and refused.
9. In the case of Khan Saheb Dost Mohd. Alladin (supra), the dower originally fixed at Rs. 10,000 was enhanced to Rs. 2 lakhs and the agreement further provided that the same shall be due on dissolution of marriage or by death or other contingencies provided by law. It is in that context their Lordships examined the case. The present is not a case of deferred dower at all. The liability on the part of the husband is not dependent upon a demand by the wife. A. demand followed by refusal may give rise to a cause of action. But that is not to say that the liability did not exist earlier. A liability to pay in praesenti or in future an ascertainable sum of money is a debt owed within the meaning of Section 2(m) of the Act, as pointed out by the Supreme Court in the case of Kesoram Industries & Cotton Mills Ltd. v. CWT [1966] 59 ITR 767. Prompt dower payable by the assessee in this case is a debt owed within the meaning of Section 2(m) and we accordingly record a finding in favour of the assessee. It was subsisting on the relevant valuation date and, hence, deductible in the computation of net wealth. We direct the WTO to allow the deduction claimed.
10. There is another ground. The amount standing to the credit of the assessee in" the CDS account was included in the assessment by the WTO. The assessee had claimed this amount as exempt. In the appeal, the AAC held that the amount was includible, but, however, that the value should be determined on actuarial basis. He, therefore, directed the WTO to ascertain the discounted value on actuarial basis and' include the same in the net wealth. Aggrieved by the same, the assessee has raised the second ground.
11. With regard to the amount standing in the CDS account, the same is includible in the net wealth of the assessee as pointed out and the Special Bench of the Tribunal in the case of Smt. Sushilaben A. Mafatlal v. WTO [1986] 18 ITD 189 (Bom.). The second ground raised by the assessee is dismissed.
12. The appeal is allowed in part.