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2010 (12) TMI 212 - ITAT, AHMEDABADShort deduction of TDS - salary u/s 192 or professional fee u/s 194J - The payments to 15 doctors were treated as a “Professional Fees” on the ground that the payment was in the nature of ‘Fixed Salary & Guarantee money to Consultants/ Doctors by the assessee - The controversy is that whether as per the terms of the agreement with the doctors in question the deduction of tax was to be made as prescribed u/s 192 of the Act or as prescribed u/s 194J of the Act - Held that: - the terms and conditions in respect of the doctors who are under FGCs (Fixed Salary & Guarantee money) are not akin to the salaried employees. Their relationship with the hospital, thus, cannot be said to be an employer-employee relationship. For this reason the deduction of tax at source ought to have been made as per the provisions of Sec. 194J of the Act. Meanings of the two propositions, viz. “OF” and “FOR” - If we use these meanings of the proposition “OF”, then the term “contract of service” can be said to be “a contract from service” or “a contract belonging to a service”. It can also be read as “a contract owning to service”. According to us, the terms and conditions do not indicate that the said contract with the Consultant Doctors was “owning to service” or “belonging to their service”. - Next is the proposition “FOR” and the same is defined in the dictionary as, with respect to, in favour of, on account of, in the place of or by reason of. If we apply these meanings, then the terminology as applied in section 194J of the I.T. Act can be read as fees on account of professional services. Therefore, it can also be read that fees with respect to technical / professional services. Likewise, in respect of the contract in question, it can be read as “contract in respect of service” or “contract by reason of service”. Therefore, the distinction as per the meaning assigned in the dictionary in respect of these two propositions are pertinent and, therefore, the language of section 194J of the I.T. Act is more close to the language used in the Agreement, hence, required to be applied to resolve the issue. When there is a specific clause provided in the Agreement for payment as “fee for services”, then there is no reason to read the said clause as “fees of services” and then there should not be any reason to treat the said payment by the assessee as payment of salary – Appeal is dismissed - Decided in favor of assessee.
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