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2014 (7) TMI 339 - AT - Income TaxTDS on payment made to Doctors - TDS u/s 192 or 194J - Relationship of employer and employee - Assessee in default u/s 201 and 201(1A) of the Act – Held that:- A fixed monthly amount was paid by the assessee as remuneration and it is no way concerned with the fees received from the patients treated by them - The appointment letter was issued to the concerned doctor on the basis of their application - The doctors are governed by the service rules of the assessee - Their leave entitlement is also in accordance with the assessee's rules- the remuneration paid in their respective books of account is not conclusive to decide the nature of the remuneration which on the basis of relation between the assessee and the doctors and not on any other basis. The real intention of the parties herein as already discussed with reference to the terms of the appointment letter issued to the doctors in the light of service regulations of the assessee hospital was to have an employer and employee relationship between them and it was not a case of appointment of consultants - there was an employer and employee relationship between the assessee and the doctors - the remuneration paid to them was chargeable to tax under the head 'salaries' and liable for deduction of tax u/s 192 of the Act and not under the provisions of section 194J of the Act - wherever the assessee issued appointment letter and the doctor’s appointment is governed by the service rules of the assessee hospital, it is to be considered that the relationship between the doctors and the assessee is as employee-employer relationship and the assessee is liable to deduct TDS u/s. 192 of the Act. Relying upon Deputy Commissioner of Income-tax Versus Yashoda Super Speciality Hospital [2010 (6) TMI 642 - ITAT HYDERABAD] - terms of appointment clearly indicate appointment of professionals for providing consulting services and not appointment of employee - The Doctors are not precluded from pursuing the professional pursuits elsewhere as long as there is no conflict of interest - Once the Doctors achieve some seniority and standing, their remuneration is a percentage of fees collected from patients consulting him - the services rendered by the Doctors are more appropriately classifiable as professional services and therefore Assessee had correctly deducted tax at source from payment to Doctors u/s 196J. The doctors or professional consultants working under contract for rendering professional services and the payments made by the assessee company to the professional doctors does not constitute salary - the assessee would not be responsible for deducting tax at source on the payments treating them as (salaries) in terms of section 192(1) of the I.T. Act - there is no master and servant relationship between the consultants/ professionals and that of the assessee and hence, the agreements entered into by the assessee with the professionals as one of “contract for services” - there is no employer-employee relationship between the assessee and the professionals – Decided against Revenue.
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