JUDGMENT [ENTITY], J.
1. At the instance of the Commissioner of Wealth-tax, Andhra Pradesh, Hyderabad, the following common question of law arising out of the common order of the Income-tax Appellate Tribunal in the case of Shri [ENTITY] and his brother, Shri [ENTITY] (hereinafter called " the assessees") has been referred under [SECTION] of the [ACT] (hereinafter called "the Act") for the opinion of this court:
" Whether, on the facts and the circumstances of the case, the value of the properties transferred by the assessees to their wives is includible in the total wealth of the assessee under [SECTION] of the [ACT] ? "
2. In order to appreciate the scope of the reference, it is necessary to state the material facts that gave rise to the aforesaid question: At the time of the marriage of each of the assessees, a sum of Rs. 10,000 was fixed as mehr (dower) as disclosed from the respective sianamas dated January 30, 1936, and 6th Aban 1339 Fasli, copies of which are annexures " A" & " B", respectively. On December 31, 1959, the assessees executed agreements marked as annexures "C" & "D" appended to the statement of the case with their wives, whereunder the dower of Rs. 10,000 originally fixed at the time of their marriages was enhanced to Rs. 2,00,000. The recitals of the agreements reveal that the agreements have been entered into by mutual consent of both the parties and the wives had accepted the enhancement of the dower and affixed their signatures to those agreements. Paragraph 3 of the agreements, which is material for our purpose, reads thus:
" The said mehr shall become due on dissolution of the marriage by death of either of the parties herein or otherwise in contingencies provided by law. It shall however be optional with the husband to pay and discharge the said mehr earlier at any time hereafter."
3. The enhanced dower was deemed to have been incorporated in the original marriage contract and the same became due and payable on the dissolution of the marriage of either of the parties or otherwise in the contingencies provided by law, although a provision has been inserted for payment of dower by the husband at any time he chose to do so. In pursuance of the aforesaid agreements, each of the assessees executed two sale deeds dated November 28, 1960, and October 15, 1961, transferring certain immovable properties specified therein, valued at Rs. 18,370 and Rs. 27,500 to his respective wife in part settlement of the dower debt.
4. The value of the properties transferred by the assessees in favour of their wives under the sale deed referred to earlier was not included by them in their wealth-tax returns for the assessment years 1962-63 to 1965-66. The contention of the assessees that the dower fixed at the time of the marriage and enhanced on 31st December, 1959, as per the agreements entered into by them with their wives was in the nature of a debt and it was open to them to pay the same at any time they choose and the transfer of properties was made in partial discharge of such debt and hence, they are not transfers without adequate consideration within the meaning of [SECTION] of the Act, did not find favour with the Wealth-tax Officer. The Wealth-tax Officer was of the view that although the Mohammadan law permits the husband to enhance the dower, there was no compulsion to enhance it and it was enhanced in the instant case purely out of his will and love and affection and it did not create a liability, nor did it amount to a consideration contemplated under [SECTION] of the Act. In his opinion there was no antecedent liability or debt in discharge of which the transfer of property was made as the very right to pay the deferred debt would arise only on dissolution of marriage by divorce or on death of either of the parties. It was also observed that the assessees themselves had not claimed either the original dower of Rs. 10,000 or the enhanced dower of Rs. 2,00,000 as a liability in the wealth-tax assessments up to 1961-62. Hence, he added the value of the properties transferred by the assessees to their wives in order to arrive at their total wealth for the assessment years in question. The appeals preferred by the assessees to the Appellate Assistant Commissioner of Wealth-tax regarding the additions made by the Wealth-tax Officer in respect of the value of the properties transferred by them to their respective wives in partial discharge of their debt were not fruitful. Aggrieved by the decision of the Appellate Assistant Commissioner, the assessees preferred further appeals to the Income-tax Appellate Tribunal. The Tribunal was of the view that, under the Mohammadan law, mehr or dower, whether prompt or deferred, was in the nature of an unsecured debt and it was open to the husband to enhance the same at any time subsequent to the marriage, and in the case of a deferred dower, although the wife cannot demand payment until the marriage is dissolved either by the death of the husband or by divorce, it (dower) shall continue to be a debt so far as the husband is concerned and he can discharge the same at any time even before the dissolution of the marriage. The transfer of property by the husband to the wife in settlement of the dower debt was held to be a transfer for adequate consideration. Hence, it was held that the transfer of the properties by the assessees to their wives was in discharge of a portion of the enhanced dower debt for adequate consideration and the value of such properties need not be included in the net wealth of the assessees for the years in question and all the appeals preferred by the assessees were allowed by the respective common orders passed by it on September 23, 1967. Aggrieved by the decision of the Tribunal, the Commissioner of Wealth-tax has preferred the reference applications and the Tribunal has stated a case on the common question of law that arises out of its orders for opinion of this court.
5. Sri [ENTITY], the learned counsel for the revenue, contended that there was no debt due and payable by the assessees to their wives until the happening of a contingency, viz., the dissolution of marriage by death or divorce and even otherwise, there was no subsisting debt or legal obligation to discharge the same on the date of the alleged transfers and, hence, the transfer of the properties by the assessees to their wives is not a transfer supported by adequate consideration and the values of such properties are liable to be included in the assessees wealth under [SECTION] of the Act.
6. This claim of the department was resisted by Sri [ENTITY], the learned counsel appearing for the assessees, contending, inter alia, that the assessees are competent under their personal law to enhance the dower while the marriage is subsisting and the dower is an unsecured debt which is binding on the husband and is legally enforceable against him and it is an actionable claim capable of transfer by the wife.
7. The answer to the question turns upon the scope of [SECTION] of the Act and its application to the facts stated earlier. [SECTION] reads thus:
" 4. (1) In computing the net wealth of an individual there shall be included, as belonging to that individual-
(a) the value of assets which on the valuation date are held-
(i) by the spouse of such individual to whom such assets have been transferred by the individual, directly or indirectly, otherwise than for adequate consideration or in connection with an agreement to live apart. "
8. The intendment of the Act, which came into force on the tst April, 1957, is to provide for the levy of wealth-tax. [SECTION] charges every individual, Hindu undivided family and company to pay a tax known as wealth-tax in respect of their net wealth on the corresponding valuation date for the assessment year at the rate or rates specified in the Schedule appended to the Act. " Net wealth " is denned under [SECTION], which reads as follows:
" ' Net wealth ' means the amount by which the aggregate value computed in accordance with the provisions of this Act of all the assets, wherever located, belonging to the assessee on the valuation date, including assets required to be included in his net wealth as on that date under this Act, is in excess of the aggregate value of all the debts owed by the assessee on the valuation date. "
9. " Assessee " is denned under [SECTION] as a person by whom wealth-tax or any other sum is payable under the Act and includes every person against whom any proceeding for the determination of tax under the Act has been taken and a person who is deemed to be an assessee or is in default under the Act. The net wealth held by an assesses on the valuation date has to be computed in accordance with the provisions of the Act. All the debts owed by the assessee on the relevant valuation date have to be deducted from the gross assets, wherever located, belonging to the assessee in order to arrive at the net wealth of such assessee. [SECTION] is enacted to safeguard the revenue against transfers without adequate consideration by an individual to his or her spouse or minor children and revocable transfers. It is applicable only to individual assessees but not to Hindu undivided families and companies. Hence, it is applicable to every individual assessee denned under [SECTION] irrespective of his or her religion, that is, the assessee may be a Hindu, Muslim, Christian, Jain, Buddhist or any other individual citizen of the Indian Union. [SECTION] provides for the inclusion of the value of the assets transferred by the individual to his or her spouse without adequate consideration. It [i.e., [SECTION] at frustrating the individual assessee's attempt to avoid or reduce the incidence of wealth-tax by transferring his or her assets to his or her spouse. A transfer of assets made by a husband to his wife or vice versa is hit by this provision provided the relationship of husband and wife exists on the date of such transfer as well as on the relevant valuation date. We are also of the view that the expression " spouse " used in the aforesaid clause takes in only the person who is lawfully wedded and it does not apply to the case of a \voman living in concubinage, be it permanent or temporary, as such person cannot be called a wife. Hence, [SECTION] does not come into play if, on the date of the transfer as well as on the valuation date, the relationship of husband and wife between the parties to the transaction is not subsisting or the marriage was dissolved by the death of either of the parties or by divorce. The aforesaid view of ours gains support from the use of the very words " assets which on the valuation date are held by the spouse of such individual to whom such assets have been transferred " in the aforesaid clause.
10. In order to attract the provisions of [SECTION], there must have been a transfer directly or indirectly of assets as denned under [SECTION] by an individual to his or her spouse ; and (b) the property so transferred must be held by the spouse of such individual on the relevant valuation date. However, there are two exceptions to the application of [SECTION]. They are: (i) where the transfer of assets is for adequate consideration, and (ii) when the assets are transferred in connection with an agreement between the husband and wife to live apart. This clause will not, therefore, be attracted when the transfer of assets is for adequate consideration or in connection with an agreement between the husband and wife to live apart.
11. In the light of the aforesaid discussion, we shall proceed to examine the applicability of the provisions of [SECTION] to the facts of the present case. In the instant case, admittedly, the sale deeds whereunder transfer of assets was made by each of the assessees in favour of his respective wife on November 28, 1960, and October 15, J961, were executed when the relationship of husband and wife was subsisting. The property so transferred and whose value was sought to be included in the net assets of the assessees, was held by their spouses on the valuation dates relevant for the assessment years in question. The transfers of the assets were not made in connection with an agreement between the assessees and their wives to live separately. The assessees being individuals, though Muslims by, religion, the provisions of [SECTION] are attracted. The only other requisite condition for the applicability of [SECTION] is that the transfers must be found to be without adequate consideration. The short question, therefore, that falls for decision is whether the transfers are for adequate consideration as contended by the assessees, or without adequate consideration, as urged by the revenue ?
12. This takes us to examine what is meant by " adequate consideration " used in [SECTION]. The word "consideration" or the expression " adequate consideration " is not defined under the Act. Hence, the expression "consideration " must be given the same meaning as in [SECTION] of the [ACT], which is as follows:
" When at the desire of the promisor, the promisee or any other person has done or abstained from doing, or does or abstains from doing, or pro mises to do or to abstain from doing, something, such act or abstinence or promise is called a consideration for the promise. "
13. Any act done or abstinence from doing or promise made to do something by the promisee or any one on his behalf as desired by the promisor, is termed as consideration for the promise. In other words, what the promisee, in his turn, does or abstains from doing some act as required by the promisor is consideration. It is well-settled that a transfer of an asset may be gratuitous (i.e., without consideration) or for consideration which may be unilateral as well as reciprocal. Consideration may be in diverse forms. It may be broadly divided into two categories, good and valuable. However, motive or reason for the transfer of an asset should not be confused with or equated to consideration.
14. The words "adequate consideration" in [SECTION] of the Act, being employed in a taxing statute, must be construed in a manner which carries out the intention of Parliament. The intendment and object of this provision being to protect the revenue from the individuals resorting to transfers of their assets in favour of their respective spouses to avoid or reduce wealth-tax, the word "adequate ", in the context, must not be held to mean " sufficient " according to the plain dictionary meaning. In our judgment, the expression " adequate consideration " in [SECTION] of the Act has been used in its legal sense as it is used in connection with the transfer of assets by an individual assessee in favour of his or her spouse. " Adequate consideration " cannot be equated to sufficient consideration, good consideration or valid consideration ; it means something more than good or valid consideration. Natural love and affection may be regarded as good consideration as seen from the provisions of [SECTION] of the [ACT] which states that an agreement without consideration is void. However, such consideration cannot be termed as " adequate consideration" which means valuable consideration. In other words, adequate consideration must be held to be valuable consideration which can only be measured or tested on the basis of money's worth. " Adequate consideration ", within the meaning of [SECTION], must, in our judgment, be construed as valuable consideration capable of being compared and measured with money or money's worth. Where a transfer is gratuitous or made only out of natural love and affection but not for any valuable consideration measurable in money or money's worth, it is not for adequate consideration within the meaning of [SECTION] of the Act. In order to hold that a particular transfer of an asset is for adequate consideration in the words of [ENTITY] and [ENTITY]:
" The promise must, indeed, have been procured by the offer of some return capable of expression in terms of value. A parent, who makes a promise ' in consideration of natural love and affection ' or to induce his son to refrain from boring him with complaints, cannot be sued upon it, since the essential elements of a bargain are lacking. " (See [ENTITY] and [ENTITY] On the Law of Contract, 7th edition, page 68).
15. This view of ours finds ample support from the decision of a Full Bench of the Patna High Court in [PRECEDENT], and that of the Supreme Court in [PRECEDENT]. The expression "adequate consideration" used in [SECTION] of the [ACT], was construed in [PRECEDENT] as " valuable consideration " but riot merely " good consideration " such as love and affection for the various reasons given therein. In [PRECEDENT], the Supreme Court had to construe the scope of the words " adequate consideration " in [SECTION] of the [ACT]. The learned judge, [ENTITY] J. (as he then was), who spoke for the court, observed thus :
" The words ' adequate consideration ' denote consideration other than mere love and affection, which, in the case of a wife, may be presumed. When the law insists that there should be ' adequate consideration' and not ' good consideration ', it excludes mere love and affection. They may be good consideration to support a contract; but adequate consideration to avoid tax is quite a different thing. To insist on the other meaning is really to say that consideration must only be looked for, when love and affection cease to exist. "
16. We shall now advert to the plea of the assessees that they are entitled to enhance the mehr fixed at the time of their marriages, that the dower is a debt due and payable by them at any time after the execution of the agreements to enhance the same, that the sale deeds have been executed by them in partial discharge of the dower debt and, hence, they are for adequate consideration within the meaning of [SECTION] of the Act and, therefore, the value of the transferred properties is not includible in their total wealth.
17. For a proper appreciation of this contention, we may examine what exactly dower means and whether it amounts to a debt in praesenti so as to entitle the assessees to deduct the same in computing their net wealth within the meaning of [SECTION] of the Act.
18. Dower is of two kinds, viz., (i) prompt and (ii) deferred. Dower which is payable on demand is called prompt dower, and the one payable on dissolution of marriage by death or divorce is known as deferred dower. The dower may be either prompt or deferred, depending upon the terms of the agreement entered into between the husband and wife at the time of the marriage. It may also be partly prompt and partly deferred. The wife is competent to realise the prompt dower either in whole or in part at any time before or after consummation. She can either demand the entire prompt dower or a portion of it. Where the payment of the dower is postponed until demanded by the wife, such dower is also prompt dower but not deferred dower. Where there is no agreement at the time of the marriage regarding the nature of the dower, the whole of it must be regarded according to Shia law as "prompt", whereas in the case of Sunnis, the rule is to regard part as " prompt" and the remaining as " deferred ", the proportion being regulated by custom, and in the absence of such custom, by the status of the parties. The wife is at liberty to waive or remit the dower or any portion of it in favour of her husband or heirs. The wife would be entitled to institute a suit for the recovery of prompt dower within 3 years from the date on which the dower was demanded and refused, or on the dissolution of marriage by death or divorce if no such demand was made during the continuance of the marriage. Prompt dower is a debt though an unsecured one. It is an actionable claim. We may in this context notice the following passage of the learned author, [ENTITY], in his book on Muslim Law :
"The wife's or widow's claim for the unpaid portion (if any) of the mehr is an unsecured debt due to her from her husband or on his death from his estate, and ranks equally and rateably with other unsecured debts. It is an actionable claim. "
19. Where the parties dissolve the marriage by divorce, the wife would be entitled for immediate payment of the whole of the unpaid dower, both prompt and deferred, if the marriage was consummated ; otherwise she would be entitled to half of that amount. See [SECTION] of [ENTITY]'s Principles of Mohamadan Law (page 309). Deferred dower cannot be converted into prompt dower by making the wife demanding the same as it is not a debt in praesenti. Deferred dower is payable on the dissolution of marriage or the' happening of some event specified in the sianama or as agreed upon by the parties. Normally, the Muslims in India treat deferred dower as a penal sum permitted to remain unpaid with the object of compelling the husband to live together and fulfil the terms of the marriage contract in their entirety. (See Mohamadan Law by [ENTITY] AH, 3rd edition, volume II, page 482). In the case of deferred dower, the husband is not liable to pay the same until the dissolution of the marriage by death or divorce or on the happening of the specified event. Hence, there is no question of any payment of interest on the deferred dower. The wife would be entitled along with other unsecured creditors to proceed against the estate of her deceased husband for the recovery of the deferred dower. She is entitled to widow's Hen for dower against the properties in her possession with the express or implied consent of her husband or his heirs and to recover her dower debt from the rents or income accruing therefrom. We may usefully refer to the following observations of Lord [ENTITY] of Waddington, who spoke for the Judicial Committee in [PRECEDENT], wherein the scope, nature and incidents of dower have been considered:
" Naturally, the idea of payment of interest on the deferred portion of the dower does not enter into the conception of the parties. But the dower ranks as a debt, and the wife is entitled, along with other creditors, to have it satisfied on the death of the husband out of his estate. Her right, however, is no greater than that of any other unsecured creditor, except that if she lawfully, with the express or implied consent of the husband, or his other heirs, obtains possession of the whole or part of his estate, to satisfy her claim with the rents and issues accruing therefrom, she is entitled to retain such possession until it is satisfied. This is called the widow's lien for dower, and this is the only creditor's lien of the Mussulman Law which has received recognition in the British Indian courts and at this Board. "
20. This brings us to consider what is meant by " debts owed " within the meaning of [SECTION] of the Act and whether the dower can be said to be owed as a debt on the relevant valuation dates. There is a catena of cases as to what is meant by debt, but suffice it to refer to the leading case, Kesoram Industries and [PRECEDENT]. The learned judge, [ENTITY] J. (as he then was), who spoke for the majority, after reviewing the entire case law commencing from [PRECEDENT]. [PRECEDENT], [PRECEDENT], [PRECEDENT] and [PRECEDENT], stated thus:
" There is no conflict on the definition of the Word ' debt'. All the decisions agree that the meaning of the expression ' debt' may take colour from the provisions of the concerned Act: it may have different shades of meaning. But, the following definition is unanimously accepted :
' A debt is a sum of money which is now payable or will become payable in future by reason of a present obligation : debitum in praesenti, solvendum in futuro.' The said decisions also accept the legal position that a liability depending upon a contingency is not a debt in praesenti or in futuro till the contingency happened. But if there is a debt the fact that the amount is to be ascertained does not make it any the less a debt if the liability is certain and what remains is only the quantification of the amount. In short, a debt owed within the meaning of [SECTION] of the [ACT] can be defined as a liability to pay in praesenti or in futuro an ascertainable sum of money."
21. We may also notice in this regard the decision of the Supreme Court in [PRECEDENT], wherein the instalments of advance tax under [SECTION] of the [ACT], were held to be "debts owed" within the meaning of [SECTION] of the Act on the valuation dates, deductible from the total assets in computing the net wealth of the assessee. The demand for payment of advance tax being an ascertained sum, was found to be a statutory liability and until a new estimate is made, it was a debt due and payable by the assessee. Rejecting the contention of the department, that the fulfilment of a condition subsequent would reduce or extinguish the liability and convert it into a contingent one, the learned judge, [ENTITY] J. (as he then was), who spoke for the court, observed thus :
" We agree with the observations of the Gujarat High Court in [PRECEDENT] that a ' condition subsequent, the fulfilment of which may result in the reduction or even extinction of liability, would not have the effect of converting the liability which attaches under such notice under [SECTION] into a contingent liability'."
22. This case is an authority for the proposition that an ascertained sum of money due and payable as per the demand is a statutory liability amounting to a debt due and payable in praesenti and such a debt must be termed to be a debt owed on the valuation date and the same cannot be converted into a contingent liability on account of the fulfilment of a condition subsequent to that. Ours is a converse case. A contingent debt cannot be converted into a debt in praesenti until the event happens, just as a debt in praesenti cannot on the same analogy be converted into a contingent one on the fulfilment of a condition subsequently.
23. On the application of the aforesaid principles, we are in entire agreement with the contention of Sri [ENTITY], the learned counsel for the revenue, that the assessees were not liable on the dates when the properties in question were transferred, or on the respective valuation dates, to pay the dower to their wives. -In the present case, the original dower of Rs. 10,000 fixed at the time of the marriage of each of the assessees, as disclosed from the respective sianamas, was deferred but not prompt. The agreement to enhance the dower was entered into on 31st December, 1959, para. 3 of which has been extracted earlier. As per para. 3 of the agreements, annexures " C " & " D ", the aforesaid mehr of Rs. two lakhs shall become due and payable on dissolution of marriage by death of either of the parties or otherwise in contingencies provided by law. When once it was agreed that the dower shall become due on dissolution of the marriage, the parties have no option to pay or demand payment, as the case may be, in respect of the said dower prior to the dissolution of marriage. Hence, the husband is not bound or obliged in law to pay the amount of the original or enhanced dower during the subsistence of the marriage. Nor can the wife demand the payment of the same before the dissolution of marriage either by death or by law. As pointed out earlier, the provisions in Mohomadan law to file a suit for recovery of the dower within three years from the date of demand and refusal is a pointer to show that the deferred dower is not a debt which can be demanded by the wife prior to the dissolution of the marriage by either of the parties or by divorce. See [SECTION] of [ENTITY]'s Principles of Mohamadan Law and [SECTION] of the [ACT].
24. We are unable to agree with the submission of Mr. [ENTITY] that the decision of the Supreme Court in the case of Standard Vacuum Oil Co. Ltd. is not applicable to the present case as it was a case arising under [SECTION] of the [ACT]. We are unable to hold that there was a debt either on the dates when the transfers were made by the assessees in favour of their respective wives or on the respective valuation dates in so far as the liability to pay dower was concerned. The liability in the instant case is contingent on the specified subsequent event, i.e., the dissolution of marriage by death of either of the parties or by divorce. Until and unless such contingency happens, the dower, in our opinion, must be held to be not due and payable by the assessees, nor can their wives demand and claim for recovery of the same until the dissolution of their marriages.
25. We do not find any substance in the contention of Mr. [ENTITY] that the very same para. 3 of the agreement specifically provided for an option to the husband to pay and discharge the mehr earlier at any time thereafter, and, hence, his clients are entitled to pay the same as per the deeds of transfer executed by them. This plea is based on the assumption that the assessees have a right to make such provision. The parties are at liberty to settle the terms relating to the quantum as well as the nature and mode of payment of the dower at the time of, or prior to the marriage, contract and the wife would be entitled to demand and sue for the recovery of the whole of the prompt dower or a portion of it before or after the dissolution of the marriage and it is also transferable. But, however, the parties are not competent under their personal law to convert the deferred dower into a prompt one either by their conduct or by executing any documents. That apart, the deferred dower would not become a debt owed by the assessee during the subsistence of the marriage. The right to claim mehr would arise only in the case of prompt dower as it is payable immediately on marriage if demanded by the wife, whereas in the case of deferred mehr or dower, it is payable on dissolution of marriage or on the happening of some specified event but not otherwise. Post debt or deferred dower or mehr, in our considered opinion, cannot be held to be a debt in praesenti payable by the assessee when the properties have been transferred or on the relevant valuation dates. The assessees either of their volition or with the consent of their wives are not entitled to make such a provision in the deeds executed by them. Such provision will be illegal and not binding on the parties and much less on the revenue. The debts deductible in computing the total net value of the assets of the assessees within the meaning of [SECTION] must be debts owed by him on the respective valuation dates, but not those which are payable only on the dissolution of the marriage by death or divorce at any future date or on the happening of some specified event. This provision, in any event, is contrary to the provisions of para 3 wherein it was specifically stipulated that the said mehr shall be due and payable on the dissolution of the marriage by death of the parties or in contingencies provided by law.
26. That apart, the conduct of the assessees in not claiming the entire amount of dower as a debt owed by them on the relevant valuation dates for the assessment years commencing from 1959-60 as well as their omission to claim the value of the transferred assets for the years prior to the assessment years in question in this reference, is a pointer against the assessees' claim. If what the assessees contend for is accepted to be true position in law they could have claimed that the dower debt in full would be a permissible deduction as a debt owed by them on the respective valuation dates. They need not have limited their claim in such a case to only the value of the assets now transferred by them to their respective wives.
27. For all the reasons stated, we have no hesitation to answer the question in the affirmative and in favour of the department. The assessees shall pay the costs of this reference. Counsel's fee Rs. 400.