We are concerned in these appeals with question whether interest received by wife on amount of policy of insurance taken out by husband on his life can be added to income of husband under Income-tax Act, 1961. This is only question and it is common in two appeals. Therefore, they are dealt with by this common order. 2. assessee had taken out policy on his life for benefit of his wife. It stated, in its conditions, that it was issued under provisions of Married Women's Property Act, 1874. Under that insurance policy, assessee's wife received certain amount and earned interest of Rs. 2,250 thereon. ITO added this interest amount to income of husband under section 64 of Income-tax Act, 1961 ('the Act'). That is how this question arises. 3. learned Commissioner (Appeals), following his decision for assessment year 1978-79 and for reasons stated therein, allowed assessee's appeal. Shortly stated, his reasons are that insurance policy is trust in favour of wife and is not property of husband and prima are paid under agreement between husband and insurer and are, therefore, not transfers of money by husband to wife. 4. Before us, learned departmental representative argued that Married Women's Property Act was not applicable to this insurance policy because of following provision in section 2 of Married Women's Property Act thereof: "But nothing herein contained applies to any married woman, who at time of her marriage professed Hindu, Mohammadan, Buddhist, Sikh or Jain religion, or whose husband, at time of such marriage, professed any of those religions." He relied upon decision of Delhi High Court in cases of A.C. Khanna v. CIT [1968] 68 ITR 159, D.M. Netarwala v. CIT [1979] 120 ITR 848 (Bom.) and R. Dalmia v. CIT [1982] 133 ITR 169 (Delhi) in support of proposition that even if asset transferred by husband was converted into another form, income thereon could be added to income of husband. 5. learned counsel for assessee, in reply, contended that section 6 of Married Women's Property Act was fully applicable to this case, relying upon sub-section (2) thereof and upon decision of Madras High Court in case of Pokkunuri Balamba v. Kakaraparti Krishnayya AIR 1914 Mad. 595 (FB). He contended that under section 6, since assessee was trustee of policy in favour of his wife from very beginning, he himself had no interest in it and that, therefore, question of transfer of amount under policy from husband to wife, did not arise. His second contention was that under section 64(1)(iv), there were two requirements: (1) that there should be transfer; and (2) that transfer should be without consideration. He submitted that in this case there was transfer with consideration, relying upon decision of Madras High Court in case of CGT v. R.R. Sharma [1978] 111 ITR 70. He further submitted that there was not even indirect transfer of assets from husband to wife in this case, relying upon decision of Supreme Court in case of CIT v. Keshavlal Lallubhai Patel [1965] 55 ITR 637. He distinguished decisions in cases of A.C. Khanna (supra), D.M. Netarwala (supra) and R. Dalmia (supra) that in those cases, there was, admittedly, transfer of assets, whereas in this case there was no transfer of assets from which income had arisen to wife. 6. learned departmental representative rejoined that decision in case of Keshavlal Lallubhai Patel (supra) was not because there was merely question of unequal partition. He argued that even if word 'transfer' was construed strictly, it would apply in this case because assessee had right in policy by virtue of his paying premia. According to him, decision in case of R.R. Sharma (supra) was not applicable because in that case Court was concerned with 'immediate' transfer of property under Gift-tax Act, 1958. He also argued that although wife had received benefit, there was no consideration from her. He also illustrated his above argument with case of husband paying monthly amount of Rs. 100 to bank and wife received amount or benefit thereon from bank. 7. To our mind, issues in this case are whether there was any transfer o f assets and if so, of what assets from husband to wife and whether there was any consideration for same. there was any consideration for same. 8. Therefore, first of all, we have to consider applicability of Married Women's Property Act and provisions thereof. Section 6(1) provides as follows: "A policy of insurance effected by any married man on his own behalf and independently of her husband; and same and all benefit thereof, if expressed on face of it to be so effected, shall ensure as her separate property, and contract evidenced by such policy shall be as valid as if made with unmarried woman." From this, it is seen that husband has no interest in policy from very beginning because he is merely trustee thereof. We now come to applicability of said provisions. learned departmental representative has relied upon section 2, which has been quoted above. In that connection, sub- section (2) of section 6 provides as follows: "(2) Notwithstanding anything contained in section 2, provisions of sub- section (1) shall apply in case of any policy of insurance such as is referred to therein which is effected by any Hindu, Mohammadan, Sikh or Jain, in Madras after thirty-first day of December, 1913, or in any other part of British India after first day of April, 1923:" Further, in case of Pokkunuri Balamba (supra), it has been held that section 6 applies to policy of insurance effected by Hindu male for benefit of his wife or children, or of his wife and children, or any of them. Therefore, we hold that section 6 is applicable in this case. 9. That brings us to argument of assessee's counsel that assessee having no interest in policy, did not transfer his asset to his wife. W e have to consider that assets were transferred by assessee to insurance company and by insurance company to wife. assessee paid prima to insurance company, which in turn paid policy amount to wife. It is entirely true that assets transferred by assessee were not transferred to wife and what was transferred to wife were not assets by assessee. But assets transferred by assessee to insurance company has been converted into policy of insurance at instance of assessee and benefit thereunder has in turn been transferred to wife. Therefore, although according to said section 6, assessee did not have any interest in insurance policy, assets which he transferred to insurance company by process of conversion have been transferred to assessee's wife. 10. In this connection, it is apposite to refer to cases of A.C. Khanna (supra), D.M. Netarwala (supra) and R. Dalmia (supra), relied upon by learned departmental representative. In case of A.C. Khanna (supra), assessee's wife had purchased 52 shares in A Co. for sum of Rs. 6,500 provided by assessee. A Co. sold its assets to B Co. and in consideration thereof B Co. made over to A Co. 19,779 ordinary shares i n B Co., and liquidator of A Co. distributed those shares to its shareholders at rate of 19 shares of B Co. for one share of A Co. In lieu of her 52 shares, assessee's wife got 988 shares of B Co. and it was held that dividend realised from shares in B Co. would be included in total income of assessee under section 16(3)(a)(iii) of Indian Income- tax Act, 1922. In case of D.M. Netarwala (supra), material facts are that assessee had transferred certain amounts to trust for benefit of, inter alia, himself and his wife. trust was determined after number of years and trust funds were divided equally between assessee and his wife. It was argued that wife received amount not by virtue of any transfer made by her husband but trustees under trust deed. But this plea was negatived and it was held that money, which was paid to wife, was paid in pursuance of directions given to trustees and she had received by reason of her right under trust deed. But section 16(3)(a)(iii) covered case of even indirect transfer. In this case ultimate object was to give effect to original intention of transferring funds by husband to wife by providing under trust deed such direction and so it was case of indirect transfer of asset from husband to wife and transfer to trust was merely intervening stage. In case of R. Dalmia (supra), assessee's wife had invested sum of Rs. 1 lakh in certain debentures and received income of Rs. 10,104. said sum of Rs. 1 lakh included Rs. 90,000 being sale proceeds of house gifted to her by assessee and valued at Rs. 88,100. It was held that only that part of sum of Rs. 10,104 arising out on investment of Rs. 88,100 could be taxed in hands of assessee under section 16(3). 11. In light of above decisions, we have to come to conclusion that conversion of assets from one form to another form does not after fact of transfer. learned counsel for assessee has relied upon decision of Supreme Court in case of Keshavlal Lallubhai Patel (supra), wherein significance of word 'indirectly' in connection with transfer has been examined by Supreme Court. Court held that partition was not case of transfer and meaning of word 'transfer' was not destroyed by use of word 'indirectly', which means that there has to be transfer and if there is no transfer, word 'indirectly' cannot make transaction transfer. In present case, there can be no dispute that there has been transfer both from assessee to insurance company and from insurance company to wife. Therefore, it is not question of whittling down meaning of term 'transfer', by use of word 'indirectly'. In that case Court has quoted from its judgment in CIT v. C.M. Kothari [1963] 49 ITR 107 (SC) that chain of transfer is comprehended within meaning of term 'indirectly'. In this case there has been chain of transfers, but this transfer is comprehended within meaning of term 'indirectly'. argument put forward by assessee's counsel at first appears to be attractive but learned departmental representative has met it successfully by relying upon decisions that conversions of assets does not effect question of transfer. 12. There remains question of consideration. Commissioner (Appeals) has observed that since payments made by husband were by way of satisfaction of contractual liability with insurance company, it could not be said that there was transfer of moneys from husband to wife without consideration. In our view, there was consideration from insurance company to assessee but there was no consideration from wife to assessee which alone is relevant. In case of R. Dalmia (supra), question was which alone is relevant. In case of R. Dalmia (supra), question was whether insurance premium paid by assessee amounted to gift. Court observed that to constitute gift, there must be immediate transfer of property which was subject-matter of gift and held that there was no gift. case, therefore, only decides that premium amounts in their original form were not gifted to wife. However, here it is nobody's case that premium amounts have been transferred by husband to wife. case is that husband transferred indirectly his assets in another form to wife. Therefore, decision in R.R. Sarma's case (supra) is not applicable to present case. 13. In view of above, we hold that interest of policy amount received by wife is taxable in hands of husband under section 64. appeals are allowed. *** INCOME TAX OFFICER v. DAMODARDAS K. SHAH