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2019 (12) TMI 1226 - AT - Income TaxNature of income - professional fees received by the doctor from the Hospital - Taxable as salary or Income from Business or profession - Deduction of claim of expenditure - AO observed that, retainership fee received by the assessee from the company “North Bengal Eye Centre Pvt. Ltd.” was not in the nature of professional fees assessable under the head ‘income from profession’, but was in the nature of salary income assessable under the head ‘income from salary’ - HELD THAT:- AO has in his assessment order assessed the income in question under the head ‘income from profession’, though in the body of the order, he was of the opinion that the income in question was assessable under the head ‘income from salary’. He simply disallowed the claim of exemption made by the assessee and assessed the gross receipts as professional income. A perusal of the agreement demonstrates that the assessee was rendering professional services. It does not lead us to a conclusion that there is an ‘employer-employee’ relationship between the assessee and the company. There is no master-servant relationship between the assessee and the hospital. There is no vicarious liability on the company, as only the assessee is liable for any professional negligence and he has indemnified the company. The hospital deducted tax at source on the payments made u/s 194J of the Act as it was of the opinion that the payment was for professional services. Hence, we are of the opinion that the income in question is assessable under the head ‘income from profession’. As already stated, the AO has assessed the income under the head ‘income from business or profession’. No reason is given for disallowing the claim of the expenditure except that such deduction is not allowable when computing income under the head ‘salary’. This finding has been overruled by us. Thus, we direct the allowance of the amount of expenditure as claimed by the assessee. - Appeal of the assessee is allowed.
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