ADDITIONAL COMMISSIONER OF INCOME TAX Vs. BRIJLAL GUPTA

JUDGEMENT

(1.) THE Income-tax Appellate Tribunal, Allahabad Bench, has referred the following question for the opinion of this court:

(2.) THE question relates to the assessment year 1969-70. THE assessee is practising as a senior advocate, generally before this court. He returned gross professional income at Rs. 80,745. He claimed that 10% of this amount, namely, Rs. 8,074.50, was received in addition by him for being paid as clerkage to his clerical establishment and was not assessable as his income. THE Income-tax Officer held that the clerkage is received by the assessee and then paid to the clerks and so it was not a case of diversion at source but appropriation only. THE Income-tax Officer found that out of the sum of Rs. 8,074.50 a sum of Rs. 3,600 was paid by the assessee to his daughter-in-law on the footing that she assisted him in his professional work. This was held not to be permissible deduction. THE balance of Rs. 4,474 was allowed as a valid deduction.

(3.) AT the instance of the Commissioner of Income-tax the Tribunal has referred the question of law mentioned above for the opinion of this court. The question referred by the Tribunal does not relate to the finding with regard to the justifiability of the disputed deduction. The Commissioner of Income-tax has filed the connected application under Section 256(2) of the Income-tax Act, 1961, praying that seven additional questions may be required to be referred to this court. AT the hearing, learned counsel appearing for the Commissioner confined his submission to questions Nos. 6 and 7 mentioned in the application. These two questions relate to the finding that the daughter-in-law rendered services to the assessee in his professional work and, therefore, the payment was justified. These questions would arise only if the other finding of the Tribunal upon which it has referred the question to us, namely, that the clerkage did not form part of the income of the assessee, is answered in favour of the department.