9911796707
TMI Blog2012 (10) TMI 91X X X X Extracts X X X X X X X X Extracts X X X X ..... thcare Pvt. Ltd. The Assessing Officer observed that assessee in fact was receiving salary income and therefore he was asked to explain as to why the so-called income be not treated as salary income. The Ld AR vide reply dated 4.10.2008 submitted that retainership agreement does not create a relationship of master & servant between the company and the assessee had for chargeability u/s 16 under the head salaries there must exists a relationship of master & servant. The Assessing Officer after going through various clauses of retainership agreement as furnished by the assessee and on the basis of difference between independent contractor and employee held that the assessee was in fact an employee on the basis of following:- 1. That there is a difference between a contract of service and contract for service and in the former case the relationship of master & servant would exist and wherein in the later such a relationship would not be a present. 2. That according to clause (4) of relationship agreement, the assessee shall be reporting to Director, Medical Services or any other person nominated by the management, thus as per the Assessing Officer the assessee was controlled by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the agreement does not specify the job to be performed by assessee and the manner in which it has to be performed thereby giving the assessee freedom and independence in performance of his professional service. 6. That as regarding reporting to the management, it may be appreciated that an independent professional consultant would be required to interact with some one nominated by management for the successful coordination and completion of any project where various consultants are providing independent services. 7. That Assessing Officer has incorrectly drawn inference from clause (7) that assessee has to devote his time exclusively for Forties. This clause merely required the assessee not to provide similar kind of services to another company engaged in similar business. The object of the clause is to prevent the assessee from imparting to another company any confidential and unique process of the company. 8. That with regard to clause (8) of the agreement the assessee was only required to make a commitment and was not bound or subject to rule & regulation or policies of the company. 5. The Ld AR also differentiated the four ingredients of contract of service as deter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the age of 58 years as per clause 10 of the Employment Letter. ii) Revision of Remuneration: Retainership Agreement does not contain any clause for revision in the retainership amount whereas the employment letter states that the salary revision will be reviewed on Ist April, each year and is subject to the effective performance and results. iii) Posting & Transfers - The employment letter contains the clause for postings and transfer of the assessee at the sole discretion of the management and on the terms and conditions as may be decided by the management. However, there is no clause for posting and transfers of the assessee under the retainership agreement. iv) Full time employment - The employment letter specifically lays down that the assessee will not take up any work in any manner as stated in Clause -4 of the employment letter whereas under the retainership agreement, the restriction on the assessee is very limited as stated in clause n -7. It can be seen from clause 4 of the employment letter that the restriction on the assessee with regard to his employment are very specific and more detailed in comparison. Intellectual Property - As per the employment letter, the Int ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nefits like provident fund and gratuity and entitlement of leaves. 7. The Ld AR submitted that assessee had claimed the receipts from Forties Healthcare Ltd. during the year 2004-05 as professional receipts and the same has not been countered by the Department. 8. The Ld CIT(A) after considering the submissions of Ld AR arrived at the conclusion that the receipts were professional receipts taxable under the head income from business or profession. The relevant portion of Ld CIT(A)'s order is reproduced below:- "I have considered facts of the case. A perusal of the assessment order shows that the Assessing Officer has assessed the appellant as an employee of M/s Fortis Healthcare Ltd. and has taxed the amount received by him as salary income. The Assessing Officer has reached this conclusion by interpreting clauses 4,5,7,8,9 & 10 of the agreement entered into by the appellant with M/s Fortis Healthcare Ltd. It is however, noticed that this agreement is basically meant to ensure a smooth and efficient interaction between the appellant and the hospital and its various clauses have to be interpreted in the light of the over all context of the agreement. For example clause 4 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appear to be justified. The income has to be taxed under the head profits and gains of business or profession. " 9. Aggrieved, the revenue has filed appeal before this Tribunal. 10. The Ld DR at the outset argued that fixed amount per month amounts to salary only and various clauses of agreement establish that there is master - servant relationship. He particularly highlighted clauses (6) of agreement relating to reimbursement of traveling expenses and argued that for a contractor one cannot put binding condition and reiterated that income was indeed salary income. 11. The Ld AR, on the other hand, argued that in the earlier years, the assessee's receipts were taxed under the head professional; income and rule of consistency cannot be denied to the assessee. In this respect, he took us to page 1 - 104 of paper book where copies of income tax returns for the assessment year 1998-99 to 2006-07 along with computation of income tax, audit report, copies of balance sheet and P&L A/c were placed. He argued that in all these years, the assessee was subjected to tax under the head professional income only. He further argued that Form No.16A issued by Forties Healthcare Lt ..... X X X X Extracts X X X X X X X X Extracts X X X X
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