9911796707
TMI Blog1998 (7) TMI 41X X X X Extracts X X X X X X X X Extracts X X X X ..... employed as manager on a salary of Rs. 8,400 for the assessment year 1982-83 and which was Rs. 17,200 for the year 1983-84 ; that the business was carried on initially as a proprietary concern of the assessee wherein her husband had been working as manager by receiving a salary and before his employment in the said business, he had been working from the year 1965 in a similar business elsewhere, on salary. Ramalingam thus had a long experience in this line of business first under others, later as a manager of his wife's business and still later as the manager of the business run by the firm in which his wife, along with another handicapped person, was a partner. The Income-tax Officer sought to include the salary paid to the said Ramaling ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... st have received a real benefit by the employment of the spouse and if the salary paid is for the services actually rendered and as a result of which the concern has benefited the salary paid is not to be artificially construed as the income of the spouse who has a substantial interest in the concern. The artificial income of the spouse to the extent of inclusion of the salary paid to the spouse has to be limited to those circumstances which we're in the view of Parliament when this section was enacted. Interpretation of that provision must be with a view to promote the object and the artificiality of the income is not to be extended beyond the limits contemplated by Parliament. The proviso under section 64(1) declares that the salary paid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uch income is in excess of the limits up to which the income are exempt from tax, tax is payable by the persons who receive the income. There is no legal bar against a spouse being employed or rendering services to a concern in which the other spouse has a substantial interest. Income earned by a spouse for the services rendered, such services being real and not wholly artificial, is normally taxable in the hands of the receiver. The words "technical or professional", therefore, must receive a liberal construction as that term is not defined in the section itself or elsewhere in the Act. The word "technical" is a term of wide import and can apply to a variety of circumstances and situations and a wide range of subjects. Any task required t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sician, is neither here nor there, so far as section 64 is concerned. But, if the spouse happens to be a person who has knowledge of food and beverages and of the management of restaurants and he manages the restaurant for his spouse, the fact that he has not attended any college in hotel management or received a diploma cannot stand in the way of the salary paid to him by the firm being treated as his own income and not the income of the other spouse. Regard must, therefore, be had to the nature of the business carried on by the concern, the nature of the technical or professional knowledge and experience usable in that concern and the kind of technical or professional qualifications, knowledge and experience possessed by the spouse to wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hnology or of management or from a University does not make the value of his services to the business any less nor make his working as a manager of the business, unreal. The salary paid to him, is therefore to be regarded as his own income and not the income of his wife, merely on account of the fact that the two are spouses. So long as the spouse who is employed is qualified by his knowledge and experience to render service by using that knowledge and experience, to the benefit of the business of the firm, the firm benefits from such service, and the payment made to that spouse is genuine and bona fide, the benefit of the proviso is available to such a spouse. Section 64(1) cannot be read as creating an irrebuttable presumption that spouse ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
