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2015 (3) TMI 617 - HC - Income TaxTax deducted at source - remuneration paid to consultant Doctors employed by the assessee hospital - employer and employee relationship - TDS u/s. 192 OR u/s. 194J - ITAT deleted tds levy - Held that:- Mere providing of non-competition clause in the agreement shall not invalidate the nature of profession. It is common that the doctors are rendering their professional services as visiting doctors in different hospitals. Imposing a condition of bar to private practice is to make use of the expertise, skill of a doctor exclusively to the assessee-company i.e., to get the attention and focus of the professional skill and expertise only to the patients of the assessee-company and to discourage doctors from transferring patients to their own clinics or any other hospital. This condition imposed by the assessee-company would not alter the nature of professional service rendered by the doctors. Tribunal also held that none of the doctors are entitled to gratuity, PF, LTA and other terminal benefits. Considering all these aspects at length a detailed, well reasoned order is passed by the Tribunal on this issue which we may not find fault with. It is also pertinent to note that the doctors have filed their return of income for the relevant assessment years showing the income received from the assesseee-Company as professional income and the same is said to have been accepted by the department. As decided in CIT (TDS) vs APOLLO HOSPITALS INTERNATIONAL LTD. reported in (2012 (8) TMI 459 - GUJARAT HIGH COURT ) the consultant doctors were not getting salary, but the payment to them was in the nature of professional fees liable to deduction under Section 194J and Section 192 of the Act had no application.- Decided in favour of assessee. Lease rent paid to Medical Relief Society of South Canara under the guise of repayment of loan taken by the lessor under a supplementary agreement - whether would not attract TDS u/s 194-I and tax at source need not be deducted when the said arrangement was external to deductions at source? - ITAT deleted tds levy - Held that:- Contention of the learned counsel appearing for the assessee that CIT had issued an order under Section 10(23- C)(via) of the Act, by virtue of which the assessee is not liable to deduct TDS under Section 194-I as the recipient itself is exempted from levy of tax, is not acceptable for the reasons that the said order was issued by the CIT, Panaji for the assessments year 2005-06 to 2007-08 subject to the compliance of conditions (i) to (vi) specified therein. The said conditional order shall not absolve the assessee from the deduction of TDS liability. The compliance/non-compliance of the exemption conditions by the recipient in advance cannot be foreseen in advance by the assessee-Company. Moreover, TDS liability under Section 194-I is not dependent on the tax liability/entitlement to exemption of the recipient. Irrespective of the tax exemption/tax liability of the recipient the assessee has to discharge the TDS liability under Section 194(I). No certificate under Section 197 of the Act is furnished by the assessee to establish that the recipient is exempted from the tax liability. Thus we hold that the payment made towards consideration is in the nature of 'rent' as provided under Section 194(I) of the Act. Section 194(I) of the Act shall be applicable for the assessment years 2006-2007 and 2007-2008 for the payment of consideration of ₹ 5,00,00,000/- (Rupees five crores only) and for the payment made towards loan liability for the assessment year 2006-2007. - Decided in favour of the revenue
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