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income-tax Officer Vs. V. P. Gohel. - Court Judgment

LegalCrystal Citation
CourtIncome Tax Appellate Tribunal ITAT Bangalore
Decided On
Reported in(1986)17ITD59(Bang.)
Appellantincome-tax Officer
RespondentV. P. Gohel.
Excerpt:
.....against the order of the commissioner (appeals) excluding the remuneration received by the assessees spouse from his total income.2. the assessee is a director of gohel consultants & engg. (p.) ltd. his wife had received salary of rs. 24,000 per annum from the said company for looking after the staff welfare and administrative matters.it is admitted that the assessees spouse was a graduate and had gained experience in the matter of staff welfare and administrative matter by virtue of her previous employment in harihar poly fibers ltd., a public limited company from 1973-74 onwards on a remuneration of rs. 22,380 per annum. she had also been employed in gwalior rayons silk mfg. wvg.co. ltd. in 1967-68 on a remuneration of rs. 13,867 per annum as welfare officer. however, the.....
Judgment:
Per Shri T. N. C. Rangarajan, Judicial member - This appeal by the revenue is directed against the order of the Commissioner (Appeals) excluding the remuneration received by the assessees spouse from his total income.

2. The assessee is a director of Gohel Consultants & Engg. (P.) Ltd. His wife had received salary of Rs. 24,000 per annum from the said company for looking after the staff welfare and administrative matters.

it is admitted that the assessees spouse was a graduate and had gained experience in the matter of staff welfare and administrative matter by virtue of her previous employment in Harihar Poly Fibers Ltd., a public limited company from 1973-74 onwards on a remuneration of Rs. 22,380 per annum. She had also been employed in Gwalior Rayons Silk Mfg. Wvg.

Co. Ltd. in 1967-68 on a remuneration of Rs. 13,867 per annum as Welfare Officer. However, the ITO was of the opinion that she had no technical or professional qualification and, therefore, salary paid to her had to be added to the assessees income under section 64(1) (ii) of the Income-tax Act, 1961, (the Act). On appeal, the Commissioner (Appeals) found that her previous experience and knowledge amounted to technical and professional qualifications and, therefore, the remuneration received by her could not be added to the income of the assessee under section 64(1) (ii).

3. The revenue is in appeal to contend that any experience in the field cannot be treated as technical or professional qualification within the meaning of section 64(1) (ii) and relied on the decision of the Karnataka High Court in the case of CIT v. Rajagopal [1984] 41 CTR (Kar.) 5. On the other hand, relying on the same decision, it was contended on behalf of the assessee that the experience gained in the same line of business was recognised as a qualification in that case.

4. After carefully reading the decision of the Karnataka High Court, we are inclined to agree with the assessee. Thought the question referred in that case made a point about experience being treated as technical or professional qualification, the High Court ultimately reframed the question without reference to that issue and answered it in favour of the revenue on the grounds that on the facts of that case, a mere degree qualification could not be considered as professional or technical qualification could not be considered as professional or technical qualification especially when the experience gained was not referable to the qualification which he possessed. But, in the present case, the facts are quite different because the spouse of the assessee gained experience in the same field and had been paid remuneration for the same work which she is doing for the assesseess company as she had been doing in the earlier public limited companies. It is quite clear on the facts of the case that the remuneration received by the assessees spouse was entirely due to her own professional qualification and work and it had nothing to do with her being the spouse of the assessee. The very exception provided under section 64 is only to excluded such kind of genuine remuneration received for work done by the spouse. Hence, we are in entire agreement with the Commissioner (Appeals) that the remuneration of the spouse cannot be added to the total income of the assessee and we, accordingly, confirm his order.

The appeal is dismissed.


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