J.M. MOKASHI V. COMMISSIONER OF INCOME-TAX (1994) 207 ITR 252 (BOM)

J.M. MOKASHI V. COMMISSIONER OF INCOME-TAX (1994) 207 ITR 252 (BOM)

FACTS

• Dr. J.M. Mokashi(assessee), a cardiologist, employed his wife, Smt. Jayashree J. Mokashi, who had only completed the first year of Arts at Bombay University, as a receptionist-cum-accountant.
• He paid her a salary of Rs. 8,100 during the relevant accounting period for the assessment year 1978-79.
• The Income-tax Officer included her salary in the assessee’s income under section 64(1)(ii) of the Income-tax Act, 1961.

• Dr. Mokashi appealed this decision to the Appellate Assistant Commissioner of Income-tax, but the appeal was rejected.
• He then filed a second appeal before the Income-tax Appellate Tribunal, observed that there was no material on record to show that Mrs. Mokashi had any technical or professional qualification or that the salary paid to her was attributable to any technical or professional knowledge and experience of her. Hence, rejected.
• Hence the present appeal before HC.

 

ISSUE

• The main question was whether Dr. Mokashi's wife's income should be included in Dr. Mokashi's income under section 64(1)(ii) of the Income-tax Act, 1961.

RULE

• Proviso to section 64(1)(ii) as follows: 

• The spouse possesses 'technical or professional qualifications'; and 
• the income is solely attributable to the application of his or her technical or professional knowledge and experience."

• Both conditions need to be fulfilled for exemption in spouse income.

HELD

• Black's Law Dictionary (sixth edition) contains the following definitions ―

• "Qualification. - The possession by an individual of the qualities, properties, or circumstances, natural or adventitious, which are inherently or legally necessary to render him eligible to fill an office or to perform public duty or office. . .." 
• “Technical according to Black's Law Dictionary, means ―belonging or peculiar to an art or profession.”

• In Barendra Prasad Ray v. ITO [(1981) 129 ITR 295] the court held that the word "business" is broadly interpreted to include "professions, vocations, and callings". The term "business connection" in section 9(1) of the Income Tax Act is not restricted to exclude "professional connections."
• In CIT v. D. Rajagopal [(1985) 154 ITR 375], Both conditions of the proviso in section 64(1)(ii) must be satisfied to exclude the spouse's income from clubbing provisions. The spouse must prove that the salary received is solely attributable to their professional knowledge and experience.
• Dr. Mokashi's wife did not possess technical or professional qualifications relevant to her job.
• Since Dr. Mokashi's wife did not have the necessary technical or professional qualifications and her income was not solely attributable to such qualifications, her income was rightly included in Dr. Mokashi's income.
• The court upheld the Tribunal's decision, ruling in favour of the Revenue and against Dr. Mokashi.