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Issues:
Whether the salary paid by the assessee to his manager, who is also his wife, could be added to the assessee's income under section 64(1)(ii) of the Income-tax Act, 1961. Analysis: The appeal was filed against the order of the AAC regarding the inclusion of the salary paid by the assessee to his wife, who acted as the manager of the business, in the assessee's income. The assessee contended that his wife was trained in handling dangerous gas and possessed technical qualifications required for the job. The ITAT considered the arguments presented by both parties and analyzed the nature of the work performed by the manager, emphasizing the specialized knowledge and technical skills involved in handling Indane Gas. The ITAT referred to previous tribunal decisions and held that the salary paid to the manager was justified considering the nature of the services rendered. The ITAT concluded that the salary was saved by the proviso to section 64(1)(ii) and thus not includible in the assessee's total income, ultimately allowing the appeal. Conclusion: The ITAT ruled in favor of the assessee, allowing the appeal and deleting the sum of Rs. 8,400 from the assessee's total income. The decision was based on the finding that the manager, who was the assessee's wife, possessed the technical qualifications and experience necessary for the specialized job of handling Indane Gas, justifying the salary paid to her. The ITAT emphasized that each assessment year is separate and self-contained, rejecting the department's argument of estoppel in income-tax proceedings. Ultimately, the ITAT held that the salary paid to the manager was reasonable and saved by the proviso to section 64(1)(ii), thereby excluding it from the assessee's total income.
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