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Issues Involved:
1. Whether the transfer of property was a gift or a transfer for consideration. 2. Whether the increase in dower debt from Rs. 10,000 to Rs. 1,00,000 was substantiated by evidence. 3. Whether the property transferred to the wife in consideration of dower debt attracted the provisions of section 16(3)(a)(iii) of the Indian Income-tax Act, 1922. Detailed Analysis: Issue 1: Nature of the Transfer The primary issue was whether the transfer of property to the assessee's wife was a gift or a transfer for consideration. The Income Tax Officer (ITO) and the Appellate Assistant Commissioner (AAC) concluded that it was a gift. However, the Income-tax Appellate Tribunal, Bombay Bench 'A', found the transfer to be genuine and valid, stating that it was permissible for the assessee to increase the meher (dower) and that the evidence supported the enhancement and the transfer. Consequently, the Tribunal held that the income from the property could not be considered the income of the assessee. Issue 2: Increase in Dower Debt The second issue was whether there was material evidence to support the assessee's claim of increasing the dower debt from Rs. 10,000 to Rs. 1,00,000. The Tribunal found that the evidence on record substantiated the enhancement of the dower debt and the subsequent transfer of the property to the assessee's wife. Issue 3: Applicability of Section 16(3)(a)(iii) The third issue was whether the property transferred to the wife in consideration of the dower debt attracted the provisions of section 16(3)(a)(iii) of the Indian Income-tax Act, 1922. The Tribunal concluded that since the transfer was genuine and for adequate consideration, the income from the property could not be included in the assessee's income under section 16(3)(a)(iii). High Court and Supreme Court Proceedings: High Court's Initial Reference The High Court initially reframed the questions to include whether an oral transfer of property in lieu of dower debt was valid and whether the income from such property was includible in the assessee's income. The High Court concluded that an oral transfer of immovable property worth Rs. 1 lakh was ineffective without a registered document, thus making the transfer invalid and the income includible in the assessee's income. Supreme Court's Intervention The Supreme Court, in Agha Abdul Jabbar Khan v. CIT [1971] 82 ITR 872, held that the High Court had no jurisdiction to raise new questions of law not referred by the Tribunal. The Supreme Court set aside the High Court's order and directed it to consider the question referred by the Tribunal according to law. High Court's Reconsideration Upon remand, the High Court directed the Tribunal to submit the real question arising for decision. The Tribunal referred the same question again, leading to the High Court's reconsideration. The High Court noted that calling for a supplementary statement or remanding the case for a fresh hearing would not serve any useful purpose, as the Tribunal had already concluded that the transfer was genuine and for adequate consideration. Conclusion: The High Court declined to answer the reference, as the Tribunal's findings were clear and supported by evidence. The application made by the Commissioner under section 66(2) of the Indian I.T. Act, 1922, was rejected as untenable, and no costs were awarded.
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