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2018 (1) TMI 791 - AT - Income TaxNature of income - salary income or busniss income - technical skill for rendering the independent contract and professional services - proof of employer employee or master servant relationship - Held that:- The assessee is a retired Electrical Technician from the Defense Department, Govt. of India, & currently is working as a contractor of electrical maintenance on board of different companies vessels. He has more than 30 years experience as electric maintenance engineer with Indian navy and private vessels on high seas. We further find that the entire agreements executed between the contracting company and the assessee, it is clearly evident that the nature of work executed by the assessee for the Marine Companies is in the nature of a contract. There is no employer employee or master servant relationship. There is also no permanent contract. It ranges from 6 weeks to 8 weeks only. In the agreement the companies mentioned the work executed by the assessee will be on contractual basis and at the time of making payment to the assessee, the company will deduct Tax at source. We also note that vide letter dated 19.11.2007 issued by Chief Legal Officer & Company Secretary, M/s Seamec Limited which was addressed to the ITO/AO, Ward-1, Rohtak of the assessee for furnishing information called u/s. 133(6) of the I.T. Act, 1961, has clearly mentioned that the work was in the nature of the contractor. The payments made by the said companies are for Technical Services rendered by the assessee. It is therefore, held that that the assessee has only Business Income and not Salary Income, hence, the professional contracts carried on by assessee are treated as ‘contract for service’ and not ‘contract of service‘, therefore, accordingly appropriate expenditure are allowed and as a result, the grounds taken by the assessee stand allowed.
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