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TMI Blog2013 (1) TMI 483X X X X Extracts X X X X X X X X Extracts X X X X ..... r Rajiv Sharma, J : Since common questions of law and facts are involved in both these Appeals, the same were taken up together for hearing and are being disposed of by a common judgment. 2. Essential facts necessary for the adjudication of these appeals are that the appellant assessee (hereinafter referred to as the assessee for convenience sake) is engaged in the business of civil construction. He had claimed deduction on account of salary paid to his wife Smt. Nanda Chhajta at Rs. 1,20,000/- for the assessment year 2003-04 and at Rs. 1,44,000/- for the assessment year 2004-05. The assessee was provided an opportunity to show cause why provisions of section 61 (1) (ii) of the Income Tax Act, 1961 may not be invoked to disallow the salary paid to 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. Asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd must be strictly construed. The proviso contemplates two conditions: 1. the spouse must possess technical or professional qualifications and 2. the income derived by him or her must be attributable to the application of such technical or professional knowledge and experience. The technical professional qualification must relate to the post which he or she occupies and secondly, the salary or fees must be attributable to the application of his or her technical professional knowledge. These two conditions must be satisfied for excluding the salary drawn by an assessee in his/her assessment and to assess it separately in the individual assessment of the recipients. The learned Single Judge 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the whole of the income of such spouse. It is in this context that the words "technical or professional knowledge and experience" have been used in the latter part of the proviso in contradistinction to "technical or professional qualifications" used in the earlier part. Thus, two different expressions have been used by Parliament in the very same proviso, not inadvertently, but with a deliberate purpose. We shall revert back to this aspect a little later, after discussing the true meaning and import of the first condition, viz., possession of technical or professional qualification. If we read the expression "technical or professional qualification" used in the 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, fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ledge and experience". This provisions makes it clear that the possession of technical or professional qualification is a condition precedent on fulfilment of which that part of the income which falls in the second part of the proviso is excluded from the operation of the clubbing provision. Take, for example, the case of the wife of an individual who is a qualified legal practitioner. Her professional services are utilised by the assessee and remuneration paid to her by way of salary, fees, etc. In such a case, she fulfils the first requirement of the proviso and she is, therefore, entitled to the benefit of the proviso. But, the benefit is again hedged in with certain 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 s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... High Court in Ashaben Rohitbhai and others versus Commissioner of Income Tax (1999) 237 I.T.R. 561 has held that the proviso contemplates two conditions: (i) the spouse must possess technical or professional qualifications, and (ii) income derived by him or her must be attributable to the application of such technical or professional knowledge and experience. The Division Bench has held as under: The proviso contemplates two conditions: (1) the spouse must possess technical or professional qualifications; and (ii) income derived by him or her must be attributable to the application of such technical or professional knowledge and experience. The requirement of technical or professional qualification is not general in terms. It must relate to the post which he or she occupied and, secondly, the salary or fees must be attributable to the application of his or her technical or professional qualification is not general in terms. It must relate to the post which he or she occupied and, secondly, the salary or fees must be attributable to the application of his or her technical or professional knowledge. If these two conditions are fulfilled, the income must be consid ..... X X X X Extracts X X X X X X X X Extracts X X X X
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