TaxTMI 
TaxTMI 
TaxTMI 
2013 (1) TMI 483
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.... Smt. Nanda Chhajta during the course of assessment proceedings. The Assessee filed reply to the show cause notice. According to him, Smt. Nanda Chhajta is an Engineer by profession and looks after plans for execution of the work allotted to the assessee. She also helps in making administrative decisions. The Assessing Officer has disallowed the salary for the assessment years 2003-2004 and 2004-2005 vide order dated 7.11.2006. Assessee preferred an appeal before the Commissioner of Income Tax (Appeals), Shimla against the order dated 11.7.2006. The Commissioner of Income Tax (Appeals) allowed the appeal on 5.10.2007. The Revenue preferred an appeal before the Income Tax Appellate Tribunal, Chandigarh Bench 'A' Chandigarh against the order dated 5.10.2007. The Income Tax Appellate Tribunal Chandigarh Bench 'A' Chandigarh Bench allowed the appeal preferred by the Revenue on 11.7.2008. Hence, these two appeals against the common order dated 11.7.2008 passed by the Tax Appellate Tribunal, Chandigarh Bench in ITA No.1052 of 2007 and 1053 of 2007 for the assessment years 2003-2004 and 2004-2005. 3. The assessee's wife is holding degree of Electronics Telecommunication. The assessee is....
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.... has held as under: "The proviso is an exception to clause (ii). It must, therefore, be strictly construed. The proviso contemplates two conditions : (1) the spouse must possess technical or professional qualification; and (2) the income derived by him or her must be attributable to the application of the such technical or professional knowledge an exprience. The requirement of technical or professional qualification is not general in terms. It must related to the post which he or she occupies and, secondly, the salary or fees must be attributable to the application for his or her technical or professional knowledge. Both these conditions must be satisfied for excluding salary drawn by an assessee in his/her assessment, and to assess it separately in the individual assessment of the recipient. Having regard to the nature of the business in which the assessee is employed and a mere degree qualification which he possesses cannot, in the context, be considered as professional or technical qualification and the experience gained in that business shall not be referable to the qualification which he possesses. In this case, the assessee was just a ....
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.... proviso to section 64(1)(ii) in the light of the above definitions of "technical" and "professional", it becomes clear that the "qualification" mentioned therein must be such which makes a person eligible for technical or professional work. A person can, therefore, be said to be in possession of requisite technical qualification when by virtue thereof, he is eligible to perform that function. Similarly, professional qualification must mean qualification which is necessary for carrying on the particular profession. Take, for example, the legal profession. The requisite qualifications for carrying on the legal profession have been laid down by the statute. In such a case, a person possessing such qualification alone can be said to be in possession of professional qualification, because such qualification is a must for carrying on the profession. Knowledge of law or experience is not relevant for that purpose. Similarly, a person cannot carry on medical profession unless he possesses the requisite degree. Similarly, there are technical jobs which require degrees and diplomas - whereas, there are a few others where university degree or diploma is not necessary. Adequate training and e....
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....ertain conditions and is limited to the extent indicated in the proviso. In that context, her "knowledge and experience" will assume significance. Take for example, the case of the wife of the individual who has just passed the LL. B. examination and enrolled herself as an advocate or having passed the LL. B. examination, did not practice law for long but has started doing so just a year or two back. Her professional services as a lawyer are utilised in the concern of her husband and she is paid remuneration therefor. In such a case, when the assessee claims the benefit of the proviso to avoid clubbing of such income of his wife with his own income, he will be required to satisfy that the remuneration so paid to her for her legal services was "solely attributable to the application of her professional knowledge and experience" as a lawyer. If the taxing authorities find that the remuneration paid for the legal services was excessive or high having regard to her limited professional knowledge and experience, he may determine the amount of remuneration which can be solely attributed to the application of her professional knowledge and experience and exclude only that part of her inco....