TMI Blog2016 (4) TMI 217X X X X Extracts X X X X X X X X Extracts X X X X ..... erson is a servant or an agent would be determined by the duties of employee, the nature of business, terms of his employment/engagement and kind of supervisory control over his work. A person who is engaged to manage the business may be servant or agent, according to the nature of his service and authority of his employment. The profession involves occupation required purely intellectual or manual skill, as held by the Hon'ble Supreme Court in the case of CIT Vs Mohandas (1965 (11) TMI 33 - SUPREME Court ). As decided in Elbit Medical Diagnostics Ltd. case [2010 (2) TMI 1163 - KARNATAKA HIGH COURT] while the duration spent at the premises by itself is not the criteria to come to the conclusion that there is a employer – employee relationship the appellant commissioner – the Tribunal which had occasion to examine the contract having opined that it is more in the nature of payment of contractual services and not in the nature of employment there is no justifiable or worthwhile reason made out to accept the submissions or to interfere with such finding. - Decided against revenue - ITA NO.425/2015 AND ITA NO.643/2015 - - - Dated:- 26-2-2016 - MR. JAYANT PATEL AND MRS. S SUJATHA, J ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es of qualified doctors in the fields of radiology, pathology, cardiology and nuclear medicine etc under a 'contract for service'. [Page 4 - para 6 of the ITAT order] 4. Services of doctors include study, analysis and interpretation of Xrays, CT scans, MRI's etc of patients sent by other hospitals/diagnostic centres. Services of doctors include interpreting the data and rendering the report of the diagnostic tests carried out by the assessee Company. [Page 4 - para 6 of the ITAT order] 5. Contract for service i.e., the agreements are entered into with the doctors only for a period of one year. Contract for service i.e., the agreements are entered into with the doctors for a period of three years [Page 4 - para 6 of the ITAT order] 6. After the expiry of one year, the appellant Company is free to enter into a new agreement with the doctor or not to enter into such new agreement. On conclusion of 3 years, the contract shall be subject further extension on such mutually agreed terms and conditions for such period as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ents to aforesaid professionals were made on the basis of their contractual obligations as consultants with the organization. [Pages 1 and 2 of ITAT order] 12. The doctors are free to carry on their private practice and there is restriction in respect of the same. The doctors are only prohibited (a) to carry on their private practice within 5 KM radius of the office of the Company or (b) to provide service for any other teleradiology Company as this would be in direct competition to the Company. In fact, some of the consultant doctors are actually engaged in their private practice without violating the conditions as mentioned above. Some of the doctors also provide similar professional services to other associated concerns of the assessee-Company. Doctors are free to render services to other concerns and individuals as long as it is not in conflict with their contractual obligations with the assessee-Company. [Pages 3 and 4 of the ITAT order] 13. The doctors are not entitled to any allowances such as Leave Travel allowance, House rent allowance, Conveyance allowance, special allowance etc giv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Elbit as and when required and permission from Management is required for presenting papers in conference and other scientific publications. 4. Thereafter Commissioner of Income Tax (Appeals) found that the said matter is covered by the decision of the Tribunal in case of M/s.Elbit Medical Diagnostics Ltd., and further confirmed by this Court, the appeal was allowed. 5. When the matter was carried before the Tribunal by the Revenue, the Tribunal at para-7 has observed thus: 7. Dr. Vinod P Joseph's appointment order reveals that the appointment is only contractual for a period of three years. It also mentions the relationship between the company and the doctor are governed by the terms of contract entered into between the assessee company and skilled persons including Doctors as indicated above. The consultancy fees is fixed at ₹ 40,000/- per month subject to deduction of tax at source. The applicant will not be entitled to statutory benefits like PF, ESI, Gratuity, Bonus, and leave encashment etc., the doctor is free to render services to other concerns at such time which is not in conflict with the terms of contract, 20 days leave allowed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o the nature of his service and authority of his employment. The profession involves occupation required purely intellectual or manual skill, as held by the Hon'ble Supreme Court in the case of CIT Vs Mohandas (1966) 59 ITR 699 (SC). The profession in general term involves the idea of an occupation requiring either purely intellectual skill, or if any material skill, as in painting and sculpture or surgery, controlled by intellectual skill of operator, as distinguished from an occupation which is substantially production or sale or arrangement for production or sale, of commodities. A profession will imply any vocation carried on by an individual or group of individual requiring the predominantly intellectual skills, depending on individual characteristics of persons pursuing that vocation, requiring specialized advance education or expertise. The 'professional service', which are termed as 'independent personal service' in the phraseology employed in tax treaties are, however, not defined in text treaties or even official commentaries on UN and OED model conventions. The meaning of this term is illustrated by some examples of typical liberal professions, and th ..... 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