Adequate consideration under income tax law requires contractual value, so a transfer made only out of love remains taxable to the transferor.

"Adequate consideration" under section 64(iv) of the Income-tax Act, 1961 means legally enforceable contractual consideration, not mere love and affection. A transfer by a father to his minor son made only for the son's education, without any reciprocal benefit or enforceable obligation in return, does not satisfy that requirement. The suggested civil duty of a Christian father to maintain a minor child was rejected as a source of consideration, and reference to section 488 of the Code of Criminal Procedure did not alter the position. The resulting income was therefore includible in the transferor's total income.

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Issues: Whether the transfer of property by the assessee to his minor son was for adequate consideration within the meaning of section 64(iv) of the Income-tax Act, 1961, so as to exclude the resulting income from the assessee's total income.

Analysis: The expression "adequate consideration" in section 64(iv) was held to import consideration in the contractual sense, and not merely natural love and affection. The document itself showed that the transfer was made out of love and affection for the son's education and was not supported by any benefit conferred by the son on the father. The view that a Christian father had an enforceable civil obligation to maintain a minor child was rejected, and the reference to section 488 of the Code of Criminal Procedure did not supply consideration because the minor could not validly contract away any right to maintenance and, in any event, such an arrangement would not bar proceedings under that provision.

Conclusion: The transfer was not for adequate consideration, and the income from the property was rightly includible in the assessee's total income; the answer was against the assessee.

Final Conclusion: The legal effect of the decision is that a transfer to a minor child made out of love and affection, without contractual consideration or an enforceable reciprocal benefit, falls within section 64(iv) and its income is taxable in the transferor's hands.

Ratio Decidendi: For section 64(iv), "adequate consideration" means legally enforceable consideration of the kind recognized in contract law, and a transfer motivated only by love and affection does not satisfy that requirement.

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