1987 (2) TMI 101 - AT - Wealth-tax

Summary

Issues:
1. Deductibility of Mehr payable by a husband in wealth-tax assessment.
2. Inclusion of amount in CDS account in net wealth assessment.

Analysis:

Issue 1: Deductibility of Mehr payable by a husband in wealth-tax assessment

The appeal raised the question of whether Mehr payable by a husband constitutes a debt owed and is eligible for deduction in the computation of net wealth. The assessee, a Shia Muslim, married Shehnabegum with a Mehr of Rs. 1,50,000. The Wealth Tax Officer (WTO) treated it as a contingent liability, disallowing the deduction. The assessee contended it was a prompt dower, while the revenue argued it was a deferred Mehr. The marriage certificate indicated the amount fixed as dower, but did not specify prompt or deferred. The Tribunal found no basis to conclude it was deferred, as Shia law presumes dower to be prompt unless expressly postponed. The liability arises once the amount is fixed, regardless of demand. The Tribunal held the Mehr payable was a prompt dower, constituting a debt owed and deductible in net wealth.

Issue 2: Inclusion of amount in CDS account in net wealth assessment

The second ground of appeal related to the inclusion of the amount in the assessee's CDS account in the net wealth assessment. The AAC directed the WTO to determine the value on an actuarial basis for inclusion. The Tribunal referred to a previous decision where such amounts were held includible in net wealth. The Tribunal dismissed the second ground raised by the assessee, affirming the inclusion of the amount in the CDS account in the net wealth assessment. The appeal was allowed in part, with the deduction of Mehr payable upheld, and the inclusion of the amount in the CDS account affirmed in the net wealth assessment.