COMMISSIONER OF INCOME TAX Vs. RAJAGOPAL D

JUDGEMENT

(1.) THE following question has been referred by the Tribunal, Bangalore Bench, under s. 256(1) of the IT Act, 1961, for the opinion of this Court :

(2.) THE assessee was getting salary as managing director of M/s Gopal Films since 1964. His wife, Smt. Indira, became a partner in the said firm in the year 1969. THE assessee was paid salary as the managing director of the firm. THE ITO included in the assessment of Shri D. Rajagopal, the husband, the salary which he was drawing as managing director. THE assessee claimed that the salary received by him from the firm should be excluded from his assessment under s. 64(1)(ii) of the Act and should be included and assessed in the hands of his wife. THE ITO rejected the said contention and included the salary income from the firm in his assessment as individual.

(3.) THE question is whether the Tribunal is justified in directing exclusion of the salary income of the assessee in his assessment for the relevant year under s. 64(1)(ii) of the Act. Sec. 64(1)(ii) provides for exclusion of any remuneration received by a spouse from the concern in which the individual has substantial interest. THE only exeption stated in the proviso thereunder is the income derived by a spouse possessing technical or professional qualifications and such income should be solely attributable to the application of his or her technical or professional knowledge and experience.