R.S. Kini vs Commissioner of Income Tax

Dr. B.P. Saraf, J.—By this reference u/s 256(1) of the income tax Act, 1961 (''the Act''), the following question has been referred by the Tribunal to this Court at the instance of the assessee, for its opinion:

Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that Smt. Kini did not have technical or professional qualifications so as to fall within the proviso to section 64(1)(ii) of the income tax Act, 1961?

The assessee is an individual and the proceedings relate to his assessment for the assessment year 1976-77. The assessee''s business is of manufacturing of gaskets and he is carrying on the said business as a proprietary concern under the name and style of Cypher Engineering Co. The assessee''s wife is a matriculate. She joined a German company known as Freidrich Udhe Gmbh erection office, Bombay, in November 1965 as a Confidential Secretary to the Managing Director. She was also looking after accounts and office management. Up to 1971 she was drawing Rs. 700 per month when she left the job. She married the assessee in 1971. In April 1972, she joined the assessee''s business and the admitted position is that she was attending to the correspondence, bank matters and other things. The salary paid to her by the assessee was claimed as a deduction in computing his income. The claim was disallowed by the ITO as, according to him, the payment attracted the provisions of section 64(1)(ii) of the Act. On appeal, the AAC allowed the claim as, in his opinion, the assessee''s wife possessed technical or professional qualification and as such she satisfied the provisions of proviso to section 64(1)(ii). The revenue went in appeal to the Tribunal. The Tribunal, on elaborate discussion, held that the wife of the assessee did not possess either technical or professional qualification and as such she did not satisfy the requirements of the proviso to section 64(1)(ii). Accordingly, the Tribunal reversed the order of the AAC and restored the order of the ITO. Hence, the assessee has come in reference against the order of the Tribunal.

We have heard the learned counsel for the assessee, Mr. Patil as also the learned counsel for the revenue Mr. Jetly. We have examined the provisions of section 64(1) in a judgment delivered today in IT Reference No. 98 of 1983 in which we have discussed what is technical or professional qualification. The assessee evidently does not meet the requirement of the proviso, as matriculation is neither a technical nor professional qualification. Following the above decision we answer the question referred to us in the affirmative, i.e., in favour of the revenue and against the assessee. On the facts and circumstances of the case, there will be no order as to costs.