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TMI Blog1984 (9) TMI 139X X X X Extracts X X X X X X X X Extracts X X X X ..... d therefore, there was no justification for employing the assessee s husband at such a salary. When the matter was carried in appeal by the assessee to the AAC, the latter upheld the action of the ITO and dismissed the assessee s appeal. The AAC noted the contentions of the assessee before him that the assessee being a lady requires a person for proper and efficient conduct of the business, that her husband Shri D. Dharmichand Sowcar has rich experience in pawn-broking and petrol bunk business having been with his father, who was running a pawn-broking and petrol bunk business for a number of years and that he was having the requisite knowledge and experience over twenty years in this line. It was also the contention of the assessee before ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xplanation. According to the definition of substantial interest in both the sections, a person is said to have substantial interest in a business wherein it is carried on by a company, the person is the beneficial owner of shares carrying not less than 20per cent voting power and in any other case his beneficial interest is not less than 20 per cent of the profit of the business. It is also pointed out that according to s. 40A(2), the remuneration paid to a relative of an individual carrying on business is an admissible deduction except to the extent it is found to be excessive or unreasonable having regard to the fair market value of the services for which the payment is made and the legitimate needs of the business or benefits derived the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he profits and gains of business and s. 64(1)(ii) is concerned with inclusion of the income of spouse in the individual s income carrying on business in a case like the present one they impeach on the same filed and apparent contradict each other. According to s. 40A(2) any expenditure by way of remuneration paid for services to a relative of the assessee, which includes a spouses as in the present case, who is engaged in the business is prohibited from deduction in computing the profits only to the extent it is found to be excessive or unreasonable having regard to the test laid down therein but under s. 64(1)(ii) and such expenditure is required to be added back to the income of such individual as per the provisions of s. 64(1)(ii) expect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g a special provision governing the assessee s case before us should prevail, we are unable to accept the Department s contention that the income derived by the spouse is not attributable to the spouse s professional or technical knowledge and experience. The Special Bench decision of the Tribunal in Dr. J. N. Mokashi vs. ITO (1983) 3 ITD 774 (Bom)(SB) has considered this question exhaustively. This decision incidentally negatives the contention of the assessee that a concern referred to in s. 64(1)(ii) does not refer to a business in which an individual has cent per cent interest. However, according to this decision, professional qualification means fitness to do a job or undertake an occupation or vocation requiring intellectual skill or ..... X X X X Extracts X X X X X X X X Extracts X X X X
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