TMI Blog1977 (7) TMI 70X X X X Extracts X X X X X X X X Extracts X X X X ..... ect: Revised rates of NPA and Stoppage of private practice— The matter regarding the enhancement of the rates of N.P.A. had been under the consideration of the State Government for some time past. It has now been decided that the rates of N.P.A. should be enhanced as under with effect from 1st January, 1972: Professors: Rs. 600 P.M. fixed Associate Professors) Assistant Professors) 50% of the pay subject to a maximum of Rs. 600 p.m. Sr. Lecturers Lecturers 33-1/3 per cent of the pay for the first 10 years of service subject to a maximum of Rs. 400 p.m. Thereafter 50 per cent subject to a maximum of Rs. 600 p.m. Registrars Demonstrators 33-1/3 per cent of the pay subject to a maximum of Rs. 400 p.m. The State Government had also been considering about regulating the unlimited private practice as it is at present. In this connection the State Government has decided that the private practice in its present form should be stopped and paying clinics should be started in various Departments where the doctors should be allowed to work and to share the income from these clinics after deduction of the administrat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or for working in the paying clinics. The assessee opted to work in the paying clinic which is run in the premises of the Medical College, Rohtak. 4. For the asst. yr. 1973-74, the assessee filed a return declaring total income at Rs. 19,450. This income included income from the paying clinics at Rs. 3,967 (gross income Rs. 19,470 less expenses claimed at Rs. 15,513). The IT Officer accepted the return under s. 143(1). Later on, however, with the previous approval of the IAC, he reopened the assessment under s. 143(2)(b). In the revised assessment, the IT Officer held that the income from paying clinic was taxable under the head `Salary'. The expenditure of Rs. 15,513 included a sum Rs. 1,800 on conferences and after admitting the expenditure to the extent of Rs. 1,500, the income from paying clinic was taken at Rs. 17,970. 5. For the asst. yr. 1974-75, the assessee filed return declaring income at Rs. 38,290. This figure included income from the paying clinic at Rs. 20,134 (gross income Rs. 34,143 less expenses Rs. 14,000). In this year also, the income from the paying clinic was taxed under the head 'Salary' and out of the expenditure of Rs. 14,000 which included an expendi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ons, the assessee supports the orders of the AAC and further submits that full expenses in both the years should have been allowed. 7. The learned Deplt., Rep. submitted that there was no evidence on record to show that prior to the introduction of the scheme of running the paying clinic, the assessee was carrying on any private practice. He took us through the details of the scheme contained in letter dt. 21st Dec., 1971 from the Commissioner for Health and Secretary to Government Haryana, Health Department written to the Principal, Medical College, Rohtak and submitted that even when he worked in the paying clinic, the assessee remained an employee of the Government. According to him, for his working in the paying clinic, the assessee had to follow the directions of the Government. These directions pertained to fees for different categories of doctors, home visits, visits outside the town etc. Whenever a doctor made visits outside the town, he was to be considered on duty. He referred to the judgment in CIT vs. Mrs. Durga Khote(1) and submitted that when the assessee opted to work in the paying clinic, he had exchanged his profession for service. He submitted that in the payin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... atients and not from the Government. It was submitted that while working in the paying clinic, there was no relationship of an employer and employee. The assessee did not get any payment from the consolidated funds of the Government. Reliance was placed on an order of the Amritsar Bench in ITA No. 228 C.O. No. 5 of 1975-76 dt. 19th Jan., 1976 wherein in Similar circumstances the income from paying clinics was held to have been rightly taxed under the head `business' or `profession'. It was submitted that the AAC was justified in holding that the income from the paying clinic should be taxed under the head `Profession'. It was also submitted that the expenses claimed were for earning the said income. The assessee had to incur extra expenditure on telephone, attendant and extra car expenses etc. which were not reimbursed by the Government. He pleaded that the expenditure as claimed should be allowed in both the years. 9. We have carefully considered the rival contentions. It is agreed before us that if the assessee was to get a non-practising allowance, it would have been taxable under the head `salary'. The question of N.P.A. is not, however, involved iin the assessee's case. I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee and a part of by the Government. The share received by the assessee from the paying clinic cannot be called a re-compense or compensation which can be brought to tax under the head 'salary'. The assessee earned the income in the paying clinic only if he worked. Whenever he is on leave, he does not earn any income from the paying clinic. According to a certificate produced before us he was on leave for summer vacation from 1st July, 1972 to 31st Aug., 1972 and 3rd Oct., 1972 to 4th Nov., 1972 being commuted leave on medical ground and for this period no income from the paying clinic was earned because no services were rendered. The income from the paying clinic is also not fixed. It changes from month to month. The judgment in the case of Mrs. Durga Khote is not relevant because the assessee has not exchanged his profession for service. The judgment in the case of Bhagwati Shankar(2) is also not applicable to the facts of this case. On a careful consideration of all the facts and surrounding circumstances, we agree with the AAC that income from the paying clinic should be taxed under the head `profits or gains of profession'. The view that we are taking is supported by the vi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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