TMI Blog2019 (10) TMI 732X X X X Extracts X X X X X X X X Extracts X X X X ..... regards the number of hours of work or number of patients that he had to examine on any day. These matters were left to the discretion of the assessee and he could determine his hours of work and consultation fee. The fees paid by the patients consulting the assessee were collected by the hospital, which in turn paid over the same to the assessee after deducting there from charges due to the hospital for any service availed and the applicable TDS for professional charges was also deducted. As mentioned earlier, the provisions of the I.T.Act clearly contemplate a situation where the individual can earn income under the different heads and hence merely because the assessee was earning some portion of his income as `salary , it did not follow that he could not earn income under the head `professional income . As long as the professional income was not traceable to the obligations of the assessee under the employment contract, the income received for professional sources could only have been classified under the head `income from business or profession and not under the head `salary . In the instant case, on perusal of the letter of reappointment, Form No.16 and Form No.16A, it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of his reappointment with the Institute is placed on record). For the assessment year 2004-2005, the return of income was filed on 30.07.2004 declaring total income of ₹ 12,43,214 which comprised of salary income of ₹ 2,93,200, professional income of ₹ 8,02,978 and income from other sources of ₹ 2,21,838. Deductions were also claimed under the respective heads while computing the total income offered for tax. The assessment u/s 143(3) of the I.T.Act was completed on 26.12.2006 by making a disallowance of ₹ 30,000 claimed as standard deduction under the head salary income. The Assessing Officer treated the entire income returned as `professional income . Since the A.O. treated entire income as professional income, claim by the assessee towards standard deduction under the head income from salary was disallowed. 3. The CIT issued notice u/s 263 of the I.T.Act proposing to set aside the assessment order dated 26.12.2006 completed u/s 143(3) of the I.T.Act. To the notice issued u/s 263 of the I.T.Act, the assessee filed a detailed replies dated 04.06.2008 and 02.03.2009. The assessee was also given personal hearing. The CI ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the same to the assessee after deducting there from charges due to the hospital for any service availed and TDS as applicable for professional charges. The remuneration paid to the appellant for teaching services was paid to him by the Institute and not the Hospital. D. The Commissioner ought to have found that it is not the status of the assessee but the nature of the income earned that determines the head of taxation for the purposes of the IT Act. The provisions of the Act clearly contemplate situations where an individual can earn income under different heads and hence, merely because the appellant was earning some portion of his income as salary it did not follow that he could not earn income under the head Professional income from the same source. As long as the professional income was not traceable to the obligations of the assessee under the employment contract, the income received for professional sources could only have been classified under the head of Income from business or profession and not under the head of Salary . For these and other reasons to be urged at the time of hearing, it is humbly prayed tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g paid on account of the professional services he rendered in the capacity as a consultant neuro-surgeon. (v) When the provisions of the Act do not prohibit the assessee to earn income under different heads, the approach of the lower authorities that since he earns salary income, he could not have earned professional income, merits interference. Further, when the deductor has classified the payment as salary and professional income, and remitted the tax applicable as TDS, and was received by the Department; the appellant cannot be asked to club both the incomes under one head. (vi) The variation in the monthly amounts received from the hospital, nature of deduction under the Act, remittance of tax under the distinct head, independent working hours, and freedom to decide number of patients for consultation, and number of operations etc., by itself will determine the nature of income earned by the appellant from the hospital. The Department do not have a case to the contrary. (vii) The appellant relies on the decisions in Dr.Shanti Swarup Jain v. First ITO MANU/IU/ 0070/1987); Ravindranath GE Medical Associates Pvt. Ltd v. Dy.C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lting the assessee were collected by the hospital, which in turn paid over the same to the assessee after deducting there from charges due to the hospital for any service availed and the applicable TDS for professional charges was also deducted. As mentioned earlier, the provisions of the I.T.Act clearly contemplate a situation where the individual can earn income under the different heads and hence merely because the assessee was earning some portion of his income as `salary , it did not follow that he could not earn income under the head `professional income . As long as the professional income was not traceable to the obligations of the assessee under the employment contract, the income received for professional sources could only have been classified under the head `income from business or profession and not under the head `salary . In this context, it is relevant to rely on the co-ordinate Bench of the Tribunal in the case of Dr.Shanti Sarup Jain v. First Income Tax Officer [ITA Nos.1748 to 1750/Bom/1986 order dated 18.02.1987] . In the above mentioned order of the co-ordinate Bench of the Tribunal, it has been clearly held that Doctor can earn salary income as well as pro ..... X X X X Extracts X X X X X X X X Extracts X X X X
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