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TMI Blog1998 (6) TMI 63X X X X Extracts X X X X X X X X Extracts X X X X ..... of the appellant ?" In Income-tax Reference No. 86 of 1985, three questions have been referred for our opinion, which read as under : "(1) Whether, on the facts and circumstances of the case, the Tribunal was right in law in holding that the shares held by the Hindu undivided family should be considered while determining the substantial interest in the company for the purpose of Explanation 2(i) to section 64(1)(ii) of the Act ? (2) Whether, on the facts and circumstances of the case, the Tribunal was right in law in its interpretation of the proviso to section 64(1)(ii) and holding that the same was not applicable in the case of the appellant ? (3) Whether, on the facts and circumstances of the case, the Tribunal was right in law in holding that deduction under section 80T is admissible with reference to the capital gain only after setting off the capital loss ?" In Income-tax Reference No. 90 of 1986, the following two questions are referred for our opinion : "(1) Whether, the salary income received by the assessee as a managing director of Rajiv Traders (P.) Ltd., in which the assessee's husband had substantial interest, is not taxable in the hands of the assessee, but is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by several High Courts including the High Court of Gujarat that the deduction under section 80T is admissible with reference to the capital gain only after setting off the capital loss was correct and accordingly the said view was confirmed. In view of the decision of this court as well as of the Supreme Court, the said question must be answered in the affirmative, i.e., against the assessee and in favour of the Revenue. As far as the question regarding the holding of shares by Rohitbhai is concerned, the case of Rohitbhai was that he was holding the shares independently and that the authorities as well as the Tribunal had committed an error of law in holding that the shares held by him as beneficiary of the Hindu undivided family. At the time of hearing, however, Mr. Shah, learned counsel for the assessee, submitted that in case the second question in Income-tax Reference No. 372 of 1983, is answered in favour of the assessee and the income of Ashaben is held to be her income by applying the proviso to section 64(1)(ii), he would not press the first question and, it would not be necessary for this court to answer the question regarding holding of shares by Rohitbhai and, no opi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt case, it was the case of the assessee that even before she was appointed as a managing director in McGaw Ravindra Laboratories (India) Ltd., she had worked as managing director in two companies in the past, and that she had sufficient professional qualifications and experience within the meaning of the proviso to clause (ii) of section 64(1). The said contention, however, was negatived and it was held that her income should not be treated as independent income but it should be included in the income of her husband. In the subsequent four years, however, the Tribunal decided the question in favour of assessee which is challenged in Income-tax Reference No. 101 of 1988. The Tribunal observed that though in the past, the point was decided against the assessee on the basis of the decision of the Tribunal, Bombay, subsequently, there was a decision of the High Court of Andhra Pradesh in Batta Kalyani v. CIT [1985] 154 ITR 59. Following that decision, the point was decided in favour of the assessee and against the Revenue. The question, therefore, is whether the case falls within the proviso to clause (ii) of section 64(1) of the Act, and ; whether the assessee can get the benefits ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ther hand, the Revenue contended that the husband of the shop owner was not possessing technical or professional qualifications and hence the proviso had no application. Upholding the contention on behalf of the assessee and interpreting proviso to clause (ii) of section 64(1) the High Court of Andhra Pradesh observed: "We find considerable force in the submission of the learned counsel for the assessee that the words 'technical or professional qualifications' occurring in the first part of the proviso do not necessarily relate to the technical or professional qualifications acquired by obtaining a certificate, diploma or a degree or in any other form from a recognised body like a university or an institute. That this was not the intention of the Legislature is clear from the use of the expression 'knowledge and experience' in the latter part of the proviso, as otherwise it would have been perfectly permissible for the Legislature to use the same expression as occurring in the first part. The harmonious construction of the two parts of the proviso, in our opinion, would be that if a person possesses technical or professional knowledge and the income is solely attributable to the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Tribunal at Bombay in the case of Dr. J. M. Mokashi (supra). The said matter was carried by the assessee to the High Court and the High Court of Bombay, confirming the view taken by the Tribunal decided the question against the assessee and in favour of the Revenue. It was contended that the High Court of Bombay upheld the decision of the Tribunal answering the question against the assessee and in favour of the Revenue. We have been taken to the said decision by learned counsel for the Revenue. Dr. Mokashi, the assessee, was a medical practitioner. He had employed his wife as a receptionist-cum-accountant. She had passed First Year Arts. For the assessment year 1978-79, the assessee paid Rs. 8,100 to his wife by way of salary. The Income-tax Officer, applying the provisions of section 64(1)(ii) of the Act, included that amount in the income of the assessee. The order was confirmed even by the Tribunal. The assessee approached the High Court. The question before the High Court was whether or not the wife of the assessee possessed technical or professional qualifications and whether or not the salary was received by her by application of technical or professional knowledge ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... latter part thereof. In the case on hand, the assessee was working as a managing director. It was her case that before she was working as a managing director in the present company, she had experience as managing director, and had received substantial sums as remuneration. In her communication, dated May 8, 1980, she has stated that before she was taken as managing director in McGaw Ravindra Laboratories (India) Ltd., she had worked as managing director with C. Doctor and Co. (P.) Ltd. from 1958 to 1961, as a director with Bipin Silk Mills and Co. (P.) Ltd., from 1961, and then she had worked as a chairperson in Rajiv Netting (P.) Ltd. She was also asked to look after certain works mentioned in the letter. It was further stated that considering the nature of duties and work put in by her, the Company Law Board had permitted an increase in her salary. The said letters were also relied upon and the copies thereof were produced along with the representation. It was further her case that McGaw Ravindra Laboratories (India) Ltd., was a public limited company which had 40 per cent. equity participation of foreign collaborator. It is also on record that she was having a Master's degree ( ..... X X X X Extracts X X X X X X X X Extracts X X X X
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