K.B.N Singh, C.J:— The Income Tax Appellate Tribunal, Patna Bench, Patna, has made Court under this Court under Section 256(1) of the Income Tax Act, 1961 for opinion on the following question of law:
“Whether on the facts in the circumstances of the case, the income from the house property falls for inclusion in the total income of the assessee?”
2. The assessee is an individual. For the assessment year 1965-1966, the corresponding accounting year of which ended on the 31st March, 1965, the assessee claimed that the income from the residential house, situate in the town of Patna, was not assessable in his hands, as the house was transferred to his wife in discharge of dower-debt. The Income-tax Officer rejected the claim of the assessee as there was no registered document evidencing the transfer of the house in discharge of the dower debt and included the net income from the residential house in the income of the assessee, relying on a Bench decision of this Court in the case of (1) Mohammad Usman Khan v. Amir Mian (XXVI I.L.R Patna 561 = A.I.R 1949 Patna 237). The assessee filed an appeal before the Appellate Assistant Commissioner, who allowed the claim of the assessee following the decision of the Tribunal in the assessee's own case for the assessment year 1963-1964, in Incomes Tax Appeal No. 10544 of 1964-1965, dated the 12th April, 1966. The Department thereupon filed an appeal, which was dismissed by the Tribunal, following its earlier decision. It may be mentioned that against the order of the Tribunal for the assessment year 1963-1964, also an identical question came up to this court in a reference and the question was re-framed and answered in favour of the assessee in (2) Tax Case No. 10 of 1968. The High Court affirmed the view taken by the Tribunal that there being a valid and completed gift of the house to the wife, in lieu of dower-debt, the income of the house was not taxable in the hands of the assessee.
3. When the present case came up for hearing before a Bench of this court, it observed that the Bench, which had heard the earlier reference in Tax Case No. 10 of 1968, relating to assessment year 1963-1964, had not noted the contrary view taken in the case of (1) Mohammad Usman Khan (supra). In the case of (1) Mohammad Usman Khan it was held that an oral gift of an immovable property worth more than Rs. 100/- by a Mohammedan in favour of his wife, in lieu of the dower debt, does not pass a valid title in her favour in as much as such a transaction is not a true Hiba-bil-Ewaz, but a sale, and so can only be effected by a registered instrument. On account of the conflict between the two Bench decisions of this Court, this case has been referred to a larger Bench and that is how it is before us. During the pendency of the reference the original assessee Syed Haider Imam died and in his place his heirs have been substituted as opposite party.
4. From a perusal of the orders of this court in (2) Tax Case No. 10 of 1968, it is apparent that the controversy lay on the question as to whether, in pursuance of the gift, possession was actually taken by the donee, in view of the fact that both the assessee and his wife were living in the said house before the gift and also continued to live therein thereafter. Relying on decisions in the cases of (3) S.V.S Mohammad Yusuf Rowther v. Mohammad Yusuf Rowther (A.I.R 1958 Madras 527), (4) Ma Mi v. Kallander Ammal (LIV Indian Appeals 23) and (5) Mt. Bibi Maniran…Defendant, v. Mohammad Ishaque…Plaintiff, . (A.I.R 1963 Patna 229) as also on the Comentry Fyzee in his Outlines of Mohammadan Law, Third Edition at page 224, it was held that the action on the part of the husband in getting the name of the wife mutated can be taken to be sufficient proof of delivery of possession and it was not necessary for the husband to walk out of the house to make delivery of possession in favour of the wife to be effective. All these decisions relied upon in Tax case No. 10 of 1968, were in cases of Hiba, pure and simple, by a Mohammadan father to his sons as in (3) The Madras case (A.I.R 1958 Mad. 527), and by the husband to his wife in the other two cases, and the controversy hinged round the question as to whether there was a valid delivery of possession to effectuate the gift. The passage quoted from Fyzee's in the judgment of this Court is also in respect of a gift, pure and simple, by a husband to his wife, but not a gift in lieu of a dower debt. It is thus apparent that the main question that has been raised in this reference, as to whether the assessee could make an oral gift to his wife in lieu of dower debt, was neither canvassed nor decided in the earlier reference (Tax Case No. 10 of 1968).
5. In paragraph 138 of the Mulla's Principles of Mohammedan Law (Seventeenth Edition), ‘Hiba’ has been defined as follows:—
“A hiba or gift is ‘a transfer of property, made immediately, and without any exchange’, by the person to another, and accepted by or an behalf of the latter.”
6. ‘Hiba, therefore, has to be a gift without anything in its return or exchange and it is a settled law that no written document is necessary for a Mohammedan gift to be valid, and, its three essential ingredients are; declaration of the gift by the donor, its acceptance, express or implied, by or on behalf of the donee, and delivery of possession of the subject of the gift. If these three conditions are complied with then the gift is complete.
7. The assessee's case has been that the gift was in lieu of dower debt. Therefore, it cannot be a case of pure hiba, as a hiba to be good has to be without any exchange. It will really be a case of ‘Hiba-bil-Ewaz; as defined by Mulla, in his Commentaries on Principles of Mohammedan Law (Seventeenth Edition), in Paragraph 168, as follows:—
“A hiba-bil-ewaz, as distinguished from a hiba or simple gift, is a gift for a consideration. It is in reality a sale, and has all the incidents of a contract of sale. Accordingly possession is not required to complete the transfer as it is in the case of a hiba, and an undivided share (mushaa) in property capable of division may be lawfully transferred by it, though this cannot be done in the case of a hiba. Two conditions, however, must concur to make the transaction valid, namely (1) actual payment of consideration (ewaz) on the part of the donee, and (2) of bonafide intention on the part of the donor to divest himself in praesenti of the property and to confer it upon the donee. The adequacy of consideration is not material; but whatever be its amount, it must be actually and bona fide paid. Such a transaction is called the hia-bil-ewaz of India as distinguished from ‘true’ hiba-bil-ewaz dealt with in the notes below. It was introduced by the Muslim lawyers of India as a device for effecting a gift of Mushaa in property capable of division.
8. The main question that falls for consideration in this case is as to whether the assessee could make a valid oral gift to his wife in lieu of the dower debt. An identical question came up for consideration before this court in the case of (1) Mohammad Usman Khan (A.I.R 1949 Patna 237-supra), and a Bench of this court, on consideration of various authorities, both textual and judicial, came to the conclusion that such a transaction is not a true hiba-bil-ewaz, but a sale, as defined in Section 54 of the Transfer of Property Act. Ramaswami J., (as he then was) in his leading judgment, observed as follows:—
“But, when a Mohammadan makes a gift of property to his wife in lieu of dower debt, it appears to us that there is only one transaction in which the consideration is directly opposed to the object of the gift, both being in esse there is no suggestion of one being subsequent to the contract. The grant and the consideration are parts of one transaction which is a sale in all its legal incidents.”
9. The Bench also relied on the consistent decisions of the Calcutta and the Lahore High Courts in the cases of (6) Abbas Ali Shikdar v. Karim Baksh Shikdar (XIII C.W.N 160), (7) Saburannessa v. Sabdul Sheikh (A.I.R 1934 Calcutta 693), (8) Sarifuddin Mohammad v. Mohiuddin Mohammad (A.I.R 1927 Calcutta 808), and (9) Fateh Ali Shah v. Muhammad Baksh (A.I.R 1928 Lahore 516). It also discussed and relied on the high authority of Mahmood J. in the case of (10) Fida Ali v. Muzaffar Ali (V I.L.R Allahabad 65). Some observations of Manohar Lall J., in his concurrent judgment, may also be usefully reproduced:—
10. I should have thought that after the decision of their Lordships of the Judicial Committee in Hirendra Singh v. Rameshwar Singh 55 I.A 197 (A.I.R 1928 P.C 112), in which the judgment was delivered by that eminent Muhammad an Jurist, Mr. Ameer Ali, there could be no possible controversy that view was not novel but had been expressed by Mr. Ameer Ali in his well-known book on Muhamroadan Law, 4th Edn., pages 162-163, and is in accord with the high authority of Mahmood J. in Fida Ali 5 All. 65 (1882 A.W.N 175) and Rahim Baksh v. Mohammed Hasan; 11 All 1 (1888 A.W.N 266). But Mr. B.C De has been able to cite some contrary decisions of the Allahabad High Court and of the Oudh Chief Court which on investigation appear to be contradictory as has been shown by my learned brother.”
11. In the earlier decisions of Oudh Chief Court and Allahabad High Court such transactions were held to be sales, but later decisions took a different view. The conflicting decision of the Oudh and Allahabad High Court, noticed in (1) Mohammad Usman Khan's case (A.I.R 1949 Patna 237), have been set at rest by a later Full Bench decision of the Allahabad High Court in the case of (11) Ghulam Abbas v. Razia Begum (A.I.R 1951 Allahabad 86) and the earlier view that it will be sale has been approved. It has been held as follows:—
“The question referred to the Full Bench is answered as follows:
An oral transfer of immovable property worth more than Rs. 100/- cannot be validly made by a Muslim husband to his wife by way of gift in lieu of dower debt which also exceeds Rs. 100/-. Such a transaction is neither a gift nor a combination of gifts, which can be made orally; it is a sale which can be effected by means of a registered instrument only.”
12. The contrary decisions in the cases of (12) Kulsum Bibi v. Shiam Sunder Lal (A.I.R 1936 Allahabad 600), and (13) Kulsum Bibi v. Bashir Ahmad (A.I.R 1937 Allahabad 25) were over ruled. A similar view has been taken by a Bench of the Nagpur High Court in the case of (14) Jainab Bi v. Jamal Khan (A.I.R 1951 Nagpur 428), which has relied upon the decision of the Privy Council in the case of (15) Mahabir Prasad v. Mustafa Hussain (A.I.R 1937 P.C 174). In the case of (16) Masum Vali v. Iiluri Modin (A.I.R 1952 Madras 471), a Bench of the Madras High Court held that a transfer of an immovable property by a Mohammedan husband in favour of his wife for her dower debt does not involve two reciprocal gifts, but it is only one contract. The Hiba-bil-Ewaz, so called in India, is a sale within the meaning of Section 54 of the Transfer of Property Act, and, unless made by a written instruments, duly registered, it will not convey title to the person in whose favour is made, consequently, an oral conveyance of an immovable property worth more than one hundred rupees by a Mohammedan husband in favour of his wife, in lieu of her dower, is not valid.
13. Mr. Asghar Hussain, learned counsel appearing on behalf of the assessee, has urged that hiba-bil-ewaz is of two kinds, true hiba-bil-ewaz and hiba-bil-ewaz of India, and the instant transaction falls within the former category as there was no sale for any specified amount of debt. He urged that all that Mahmood J. has laid down in the case of (10) Fida Ali v. Muzaffar Ali (I.L.R V. Allahabad 65) is that if the transfer is by a document in respect of a specified amount of dower, mentioned therein, then it will be a sale and that Mahmood J. has not laid down, as has been ascribed to his Lordship in the decisions relied upon in A.I.R 1949 Patna 237, that the transfer in lieu of dower will be sale in all circumstances.
14. There is no substance in this submission of Mr. Hussain. What has been laid down in that decision is based on the rules of Mohammedan Law and is of general application, as will be apparent from the following:—
“It is an equally well recognised rule of that law that transfer of property by the debtor to the creditor in payment of the debt constitutes sale, and the rule is wide enough to include transfer of property by the husband to the wife in payment of her ascertained dower.”
15. The decision in the case of (17) Rahim Buksh v. Muhammed Hassan (I.L.R XI Allahabad 1), relied upon by Mr. Hussain, in support of his submission, is also not of any help. In that case a deed of gift was executed in consideration of natural love and affection and, services rendered and was sought to be supported as a hiba-bil-ewaz. But it was held that it could not be treated as such Mahmood J., observed as follows:—
“.. I cannot hold that the learned Subordinate Judge was right in holding that the transaction evidenced by the deed of the 4th May, 1883, was a hiba-bil-ewaz amounting to sale, there being no. ‘exchange of property for property in the sense of the Muhammadan Law of sale, nor’ a transfer of ownership in exchange for a price paid or promised or part paid and part promised, ‘within the meaning of Section 54 of the Transfer of Property Act (IV of 1882).”
16. The other two decisions relied upon by Mr. Hussain are in the case of (18) Basir Ahmad v. Jubaida Khatun (A.I.R 1926 Oudh 186) and (19) Talib Ali v. Kaniz Farima Begum A.I.R 1927 Oudh 204). Suffice it to mention that both these decisions have been rightly dissented from in the case of (20) Saiful Bibi v. Abdul Aziz Khan (A.I.R 1932 Allahabad 596), as noticed with approval in paragraph 45 of the Full Bench decision reported in A.I.R 1951 Allahabad 86 (supra).
17. Mr. Hussain has next sought to distinguish the decisions in Mohammad Usman Khan's case (A.I.R 1949 Patna 237) and Ghulam Abbas' case (A.I.R 1951 Allahabad 86), in as much as in those cases the transactions were treated as sales, as they were in consideration of fixed amounts of dower, which is not so in the instant case. There is no substance in this contention of the learned counsel. It is true that there is no reference to the specific amount of dower in the statements of facts, but it is the admitted case of the assessee that the transfer of property was in lieu of dower debt, which will be presumed to be a specified amount. In paragraph 285 Mulla, in his Principles of Mohammedan Law, defines ‘Mahr’ or ‘dower’ as “a sum of money or other property which the wife is entitled to receive from the husband in consideration of the marriage.”
18. Mr. Hussain has relied on pages 412-415 (Second Edition) of Mohammedan Law by F.B Tyabji, in support of his submission that hiba-bil-ewaz is of two kinds, that is to say, the secondary gift by the husband is only after the primary gift of dower by the wife and it is not a sale. It is true that according to the original concept of the Mohammedan Law, a hiba-bil-ewaz is a gift, and, where it may be so, it is not a sale. But the transaction of hiba-bil-ewaz in India is not a true hiba-bil-ewaz of either kind but a sale, as explained in Chapter VI, Vook VIII, of Ballies Digest of Mohammedan Law, which is only an abbreviated reproduction of Fatza Alamgiri and may usefully be quoted:—
“Hiba-bil-ewaz means, literally, gift for an exchange and it is of two kinds, according as the ewaz or exchange is, or is not, stipulated for at the time of the gift. In both kinds there are two distinct acts; first, the original gift, and second, the ewaz or exchange. But in the hiba-bil-ewaz of India, there is only one act; the ewaz, or exchange, being involved in the contract of gift as its direct consideration and all are agreed that if a person should say, ‘I have given this to the ewaz for so much’, it would be a sale; for the definition of sale is an exchange of property and the exchange may be effected by the word ‘give’ as well as by the word ‘sell’. The transaction which goes by the name of hiba-bil-ewaz in India is, therefore, in reality not a proper hiba-bil-ewaz of either kind, but a sale; and has all the incidents of the latter contract. Accordingly, possession is not required to complete the transfer of it though absolutely necessary in gift, and what is of great importance in India, an undivided share in property capable of division may be lawfully transferred by it, though that cannot be done by either of the forms of the true hiba-bil-ewaz.”
19. As a result of the aforesaid discussions, it is manifest that a gift in lieu of dower debt is not a true hiba-bil-ewaz, but really a sale and has to be by a registered instrument, as required under Section 54 of the Transfer of Property Act, if the immovable property transferred is valued more than Rs. 100/-. This is in consonance with the decisions of the other High Courts as well. I would accordingly hold, with all respect to the learned Judges, that Tax Case No. 10 of 1968 has not been correctly decided and the decision in Mohammad Usman Khan's case has correctly laid down the law.
20. The last contention of Mr. Hussain is that if the transaction fails as being a valid hiba-bil-ewaz, it will still be effective as a gift as the requirement of possession has been complied with, and it is well settled that no registered document is required for a Mohammedan gift. He has relied, in support of his proposition, on decisions in the cases of (21) Serajudin Haldar v. Isab Haldar (A.I.R 1922 Calcutta 258), and (22) Sardar Khatun v. Secretary of State (A.I.R 1939 Sindh 9) as well as on Saksena's Muslim Law, Fourth Edition, page 432, and Mulla's Principles of Mohammedan Law, Seventeenth Edition, page 164 footnote (c). It is true that a document is not required for a simple hiba to be valid, but where a transaction fails as a Hiba-bil-ewaz for not being evidenced by a registered instrument, it will not be good as a hiba, as a Hiba, pure and simple, has to be without any exchange, as discussed above. Both the cases relied upon by Mr. Hussain (A.I.R 1922 Calcutta 258 and A.I.R 1939 Sindh 9) related to the interpretation of pleadings and it has been held therein that although a transaction can be described in the plaint as a hiba-bil-ewaz, it is open to the plaintiff to show that it was a simple hiba, provided that the point is raised at the earlier stage of the suit. These two decisions are hardly of any assistance to the learned counsel, as in a reference, no fresh facts can be permitted to be investigated and the findings of facts are binding. In the instant case, the definite plea of the assessee throughout was that the house was transferred in lieu of dower debt. The assessee not having pleaded at any earlier stage of the case that it was a case of pure gift, i.e, a hiba without any consideration, it is too late for him now to raise this plea in a reference before this Court.
21. Mr. Asghar Hussain has also strenuously urged that the instant case is one of assignment of the house in exchange of dower debt, and, it is, therefore, a gift and not a sale. He relied on the decisions in the cases of (22) Jaitunbi Fatrubhai v. Fatrubhai Kasambhai (A.I.R 1948 Bombay 114) and (23) Mohammad Hashim v. Aminibi (A.I.R 1952 Hyderabad page 3).
22. From the statement of case, submitted by the Tribunal, it is manifest that the claim of the assessee was that he had transferred the residential house to his wife in discharge of the dower debt and not by way of assignment. The orders of assessment of the Taxing authorities, which are Annexures A, B, C and D, also do not show that there was any assignment of the house in question. The statement of case as well as the orders of assessment shows that the assesses had given the house in question in discharge of the dower debt. In the case of Jaitunbi Fatrubhai (A.I.R 1948 Bombay 114) a land was assigned by the bridegroom to the bride in lieu of Mahr. In that case, the entry made in the Kazi's Book read as follows:—
“Certified…… That marriage was celebrated by the gift of a piece of land at Deolall, Ahmednagar District, in lieu of Mahr of Rs. 2500.”
23. It was in these circumstances that Lokur, J. observed as follows:—
“In all the cases cited above, ewaz (a consideration in exchange) for the Hiba was a dower-debt. In the present case, the dower had not yet become a debt when the gift of the land was made by defendant 1 to the plaintiff. The entry in the Kazi's register shows that the marriage was celebrated by the gift of the land ‘in lieu of Mahr of Rs. 2500/-’. That means that Defendant 1 intended to give a Mahr of Rs. 2500 to the plaintiff but instead he made a gift of a land to her as Mahr.”
24. This case, therefore, has no application to the instant case, and is distinguishable on its own facts. The other decision, in the case of (23) Mohummad Hasim v. Aminibi (A.I.R 1952 Hyderabad 3) relied upon by Mr. Hussain was also similar to that of the Bombay decision. In the Hyderabad case also, in the Nikahnama Rs. 500/- was mentioned as the dower, in lieu of which a house was given. The Hyderabad High Court observed as follows:—
“It appears to me that the correct interpretation of the entry in the ‘Siaha’ is that the house was being given in lieu of ‘Mahr’ and it was a simple gift. It does not contemplate a transfer made in consideration of the relinquishment of the ‘Mahr’ by the proposed bride. It is an unilateral act and as such covered by the third class, a pure gift, which is saved by Section 110 of the Hyderabad Transfer of Property Act, being similar to Section 129 of the Transfer of Property Act.”
25. It may be mentioned here that Hyderabad High Court relied upon judgments of the Allahabad High Court over ruled by A.I.R 1951 Allahabad 86, for some of the propositions laid down in the case, in preference to the Bench decision of this court in Mohmammad Usman Khan's case (supra).
26. Mr. Asghar Hussain has also urged that the decision in earlier Tax case No. 10 of 1968 that the transaction was a gift will operate as res judicata and the principle of res judicata is applicable to assessment proceedings also. He has urged that for earlier year, in Tax Case No. 10 of 1968, it was not contended by the Department that the transaction was not a gift, but a sale, and the Department would be deemed to have admitted the position that it was really a gift. Strong reliance has been placed in its support of the decisions in the case of (24) Hoyastead v. Commissioner of Taxation (1926 Appeal Cases 155); (25) Sankarlinga Nadar v. The Commissioner of Income Tax (I.L.R LIII Madras 420), (26) Kaniram Ganpat Rai v. Commissioner of Income Tax (IX I.T.R 333) and (27) Kamlapat Motilal v. Commissioner of Income Tax (XVIII I.T.R 812).
27. There is no substance in this submission of the learned counsel, in view of the decision of the Supreme court in the case of (28) New Jehangir Vakil Mills Co. Ltd. v. Commissioner of Income Tax (XLIX I.T.R 137), wherein Hoyastead's case was not approved. Relevant portion of the decision of the Supreme Court may usefully be quoted:—
“In……..Hoyastead v. Commissioner of Taxation (1926 A.C 155), one of the questions was whether certain beneficiaries under a will were joint owners. It was held that although in a previous litigation no express decision had been given whether the beneficiaries were joint owners, it being assumed and admitted that they were, the matter so admitted was so fundamental to the decision then given that it estopped the Commissioner. The latter decision was distinguished in Society of Medical Officers of Health v. Hope (1960 A.C 551). Both the decisions were again considered by the Judicial Committee in Cafoor v. Income Tax Commissioner (1961 A.C 584). The decision in Broken Hill Proprietary Co.'s case (1926 A.C 94) was approved and the principle laid down was that in matters of recurring annual tax a decision on appeal with regard to one year's assessment is said not to deal with eadem questio as that which arises in respect of an assessment for another year and consequently not to set up an estoppel. As to the decision in Hoyastead's case, it was stated;
‘Their Lordships are of opinion that it is impossible for them to treat Hoyastead's case as constituting a legal authority on the question of estoppels in respect of successive rears of tax assessment. So to treat it would bring it into direct conflict with the contemporaneous decision in the Broken Hill case; and to follow it would involve preferring a decision in which the particular point was either assumed without argument or not noticed to a decision, in itself consistent with much other authority, in which the point was explicitely raised and explicitely determined.’
28. In Instalment Supply (P) Ltd. v. Union of India [(1962) 2 S.C.R 644], the Court referred to the decisions just mentioned and said that it was well settled that in matters of taxation there would be no question of res judicata.”
29. In LIII Madras 420, the Madras High Court has also held that Income-tax Officer is not bound by the rule of res-judicata, yet he can reopen the matter only if fresh facts are brought to light which investigation entitled him to come to a conclusion different from that of his predecessor. In Kaniram Gunpat Rai v. Commissioner of Income Tax (IX I.T.R 333), a Bench of the Patna High Court has followed the principles laid down in the above noted Madras Full Bench decision. To the same effect is the decision in the case of Kamlapat Motilal v. Commissioner of Income Tax (XVIII I.T.R 812 = A.I.R 1950 Allahabad 249).
30. The decision in the case of (29) Commissioner of Income Tax v. Brijlal Lohia and Mahabir Prasad Khemka (84 I.T.R 273), which was also a case of gift, is a settlor on the point. In that case, for the assessment years 1945-1946 and 1946-1947, two gifts of certain sums of money made by the assessee to his brother and nephew were held to be collusive by the Income-tax authorities and they added the income of the gifted property as the income of the assessee. The High Court did not interfere on reference vide (30) Kanhaiyakl Lohia v. Commissioner of Income-tax = XLIV I.T.R 405. The Supreme Court also refused to interefere with the findings of the Tribunal vide (31) Kanhaiyalal Lohia v. Commissioner of Income-tax (1962) 2 S.C.R 839. For the subsequent years 1947-1948 to 1951-1952, the Tribunal came to an opposite conclusion on further evidence and accepted the gifts to be valid. On reference, the High Court refused to interfere vide (32) Commissioner of Income-tax v. Brijlal Lohia; LXVI I.T.R 97. Thereafter, the matter went up to the Supreme Court at the instance of the Commissioner of Income Tax and the Supreme Court held as follows:—
“The fact that in the earlier proceedings the Tribunal took a different, view of those deeds is not a conclusive circumstance. The decision of the Tribunal reached during those proceeding does not operate as res judicata.”
31. Therefore, the earlier decision in Tax Case No. 10 of 1968 will not operate as res judicata and estop this court from considering the true import of the transaction, whether the transfer of the house by the husband to the wife in lieu of dower debt was a gift or a sale, every year's assessment being based on separate cause of action. The question not being also mooted in the earlier case, no question of estoppel will arise.
32. Mr. B.P Rajgarhia, learned Senior Standing Counsel appearing on behalf of the Department, has also submitted that the earlier decision in Tax Case No. 10 of 1968 was erroneous, inasmuch as it did not take notice of Section 16(3)(a)(iii) of the Income Tax Act, and even if the transaction is held to be a gift, the income will be treated as income of the husband.
33. Relevant portion of Section 16 of the Income Tax Act may usefully be quoted:—
“16 EXEMPTIONS AND EXCLUSIONS IN DETERMINING THE TOTAL INCOME:—
........
(3) In computing the total Income of any individual for the purpose of assessment, there shall be included;
(a) so much of the income of a wife or minor child of such individual as arises directly or indirectly—
….….….….
(iii) from assets transferred directly or indirectly to the wife by the husband otherwise than for adequate consideration or in connection with an agreement to live apart; or,
….….….….”
34. Learned counsel has urged that even if the gift is held to, be an independent gift without any consideration, provisions of Section 16 of the Income Tax Act will apply, inasmuch as it is a settled law that love and affection is not adequate consideration for the purpose of Section 16 of the Income Tax Act, as held in (33) Tulsidas Kilachand v. Commissioner of Income Tax (XLII I.T.R 1).
35. As this question might involve consideration of questions of facts and was not raised before the Income Tax authorities, nor does it arises from the order of the Tribunal, I do not consider it will be advisable for a court of reference to go into this question for the first time, as it exercises advisory jurisdiction and does not function as a court of appeal, vide (34) Anil Kumar Roy Chowdhary v. Commissioner of Income Tax, (A.I.R 1976 Supreme Court 772).
36. In the result, with due respect to the learned Judges who decided Tax Case No. 10 of 1968, I hold that case was incorrectly decided in as much as such a transaction being not a true hiba-bil-ewaz, but a sale, and so can be effected only by a registered deed, when the property involved is valued more than one hundred rupees, and that the case of Mohammad Usman Knan (A.I.R 1949 Patna 237) has been correctly decided. In, the instant case, the house in the heart of the town of Patna has been transferred and it is nobody's case that it is worth less than one hundred rupees. There being no valid transfer of the house in question to the wife, the income from the house was income of the assessee and was assessable in his hands. I would, therefore, answer the question referred in favour of the Department and against the assessee. In the circumstances of the case, I would make no order as to costs.
37. Shambhu Prasad Singh, J.:— I agree that on the facts and in the circumstances of the case the question referred in favour of the Department and against the assessee, but would like to make few observations of my own. The Mohammedan Law makes a distinction between Hiba (gift pure and simple) and Hiba-bil-ewaz (gift for consideration). According to the original concept of the Mohammedan Law, Hiba-bil-ewaz was also not a sale for it contemplated either a gift the consideration of which was natural love and affection which was not a property or even where the ewaz or consideration was a property, it was not stipulated for at the time of the gift. In such cases thus there were two gifts which were not simultaneous and did not constitute one act. One was of the property gifted by the donor in favour of the donee and another of the property which was ewaz or consideration by the donee in favour of the donor. In such cases an undivided share in the property capable of division could not be lawfully transferred for its possession could not be delivered and the gift could not be completed unless the possession was delivered. To avoid this difficulty the Muslim Jurists of India recognised a kind of transaction in which the transfer of property by both parties to the transaction was only one act. As it was really not a gift pure and simple but a sale in the real sense of the term, even an undivided share in property known as Mushaa could be made subject-matter of the transaction. Such transactions also came to be known as Hiba-bil-ewaz in India. A gift by a Mohammedan in lieu of the dower debt after the marriage has taken place has always been held by judicial decision to be a Hiba-bil-ewaz which is really a sale of property within the meaning of Section 54 of the Transfer of Property Act and if the value of the property transferred is more than Rs. 100/- then unless a deed is executed and registered the transaction confers no title. The transaction with which a Bench of this court had to deal with in the case of Mohammad Usman Khan v. Amir Mian (A.I.R 1949 Patna 237) was of such a nature. In the case before us also, as it will appear from the documents placed before us in the case, the case of the assessee himself was that he had gifted the property to his wife in discharge of dower debt. Thus, it was really a transaction of sale and cannot be held as a Hiba (gift pure and simple) or even a Hiba-bil-ewaz (gift for consideration) according to the original concept thereof in Mohammedan Law. The case is thus directly covered by the decision in Mohammad Usman Khan's case which, in my opinion, was correctly decided and authorities cited by Mr. S.S Asghar Hussain are of no real help to the assessee.
38. There are high authorities English as well as of our Supreme Court which hold that doctrine of res judicata does not apply to taxation cases. In face of those authorities, specially of the Supreme Court which are binding on us, it is not possible for me to take a different view, otherwise I was inclined to think that the decision in Sankarlinga Nadar v. The Commissioner of Income Tax (I.L.R LIII Madras 420) which has been followed by a Bench of this court in Kaniram, Ganpat Rai v. Commissioner of Income Tax (IX I.T.R 333) and also by a Bench of Allahabad High Court in Kamlapat Motilal v. Commissioner of Income Tax (XVIII I.T.R 812 : A.I.R 1950 Allahabad 249) holding that the Income Tax Officer is not bound by the rule of res judicata, yet he can reopen the matter only if fresh facts are brought to light which investigation entitled him to come to a conclusion different from that of his predecessor, lays down the correct law. The principle which gave birth to doctrine of res judicata was that it would not be in public interest to allow the parties to have litigation over the same matter over and over again. If no ban is put on the Income Tax Officer from reopening a matter which already stands decided between the parties, i.e the Department and the assessee, earlier, then there will be appeals to the Appellate Assistant Commissioner, and Appellate Tribunal and even references to the High Court with regard to the same matter for every assessment year. I am, therefore, of the view that either by judicial decision or by amendment of the law (Income Tan itself) some such ban should be imposed on the Income Tax Officers or other authorities and Tribunals functioning under the Act. True it is that a finding as to what was the Income of the assessee in an earlier assessment year assessable to tax cannot operate as res judicata as to what is his income in a subsequent year assessable to tax, but there should be some provision laying down that a finding in a previous year that some property does or does not belong to the assessee and, therefore, its income is liable or not liable to be taxed as his income or findings on similar other matters should operate as res judicata in assessment proceedings for subsequent years unless it is established that some change has taken place in the circumstances prevailing earlier or that the finding was obtaind by unfair means, such as practising fraud etc.
39. Uday Sinha, J.:— I agree with my Lord the Chief Justice. I have however, my reservation about the desirability of the application of principles of res judicata to taxation cases as suggested by S.P Singh, J.
Question answered in favour of Department.
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