Thanks BigJoe5. I have understood your point. It is not a question whether the arrest should be disclosed. I have already decided to disclose it regardless of USCIS's decision. I am trying to understand the basis for the denial, if denied.
The police had to come up with some solid IPC (Indian Penal Code) charges to detain else it is simply not possible to arrest. The maximum punishment IF (and this is really BIG IF) proved guilty could be 3 months in jail or 7 years if "intent" was to harm the person. Again, 999 out of 1000 times it is difficult to prove that the intent of husband's visit to wife's house was to cause harm. Also, the wife did not complain anything about any physical abuse, as there was not at all any physical harm but a verbal argument. Because I know that I have not done anything wrong and because my intention & motive was clear, I am not afraid of disclosing it. The only thing I am worried is, how it is perceived by USCIS.
It looks like a minor squabble (not unusual or serious). It is but a headache to deal with the documents for both you and the USCIS Officer, but all the "i's" must be dotted and all the "t's" crossed.