Spouse salary clubbing under income tax law fails where genuine employment and technical qualification support independent service.

Salary paid to a spouse employed by a family concern was examined under section 64(1)(ii) of the Income-tax Act, 1961. The analysis treated the wife as employed in her own capacity, with her science graduate and technical background supporting supervisory, administrative and manufacturing-related work connected with scientific instruments. On that basis, the employment was regarded as outside the clubbing provision, so the salary was not includible in the assessee's income and the addition was deleted.

---

---

Issues: Whether the salary earned by the assessee's wife from employment with a family concern could be clubbed in the assessee's hands under section 64(1)(ii) of the Income-tax Act, 1961, despite her technical qualification.

Analysis: The wife was employed in the concern in her own capacity and the salary was not paid by the assessee. The provision was considered in the light of the spouse's educational and technical background, and the reasoning accepted that a science graduate qualification was sufficient for supervisory, administrative and manufacturing-related work connected with scientific instruments. On that basis, the spouse's employment was treated as falling outside the mischief of clubbing.

Conclusion: The salary of the assessee's wife could not be included in the assessee's income under section 64(1)(ii), and the addition was deleted.

---