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TMI Blog2019 (12) TMI 1226X X X X Extracts X X X X X X X X Extracts X X X X ..... ssion and has filed his return of income with individual status on 14.09.2013 for the AY 2013-14 declaring total income of Rs. 1,80,60,640/-. The AO completed the assessment u/s 143(3) of the Act on 03.02.2016 determining the total income at Rs. 2,47,73,497/- inter alia disallowing expenditure claimed by the assessee from professional fees received on the ground that, the 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'. The AO stated that no deduction is admissible except professional tax under the head 'salary incom ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es of this agreement and specifically drew our attention to the clauses on payment of fees, discounts and charity, leave and vacation, professional liability insurance, indemnification etc. and argued that these terms indicate that professional services were rendered in terms of the agreement and that there was no employer-employee relationship. He further argued that deduction was made u/s 194J of the Act by the hospital, to the payments made to the assessee and this clearly establishes that what was received, is professional fees. He submits that the findings of the ld. CIT(A) that being a Director of the hospital and being at the disposal of the hospital full time leads to a conclusion that the remuneration received by the assessee as sa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cord and case laws cited, we hold as follows. 9. The 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. 10. 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 'employeremployee' relationship between the assessee and the company. 11. In the preamble of the Agreement it is agreed as follows: "On the terms recorded hereunder, the Ophtha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aid retainership fees shall be paid on or before 10th day of the month following the completed month of attendance. 8.1 The Company and the Ophthalmologist may, from time to time, render services to certain deserving patients Pro-Bono either free of cost or at discounted rates as Charity Cases in accordance with, the policies recommended by Charity Committee of the Company from time to time. The Ophthalmologist shall grant proportionate discount in charging the Surgery and OPD Consultation fees in case the Company grants discount to any charity case. When certain charity cases are to be treated free of cost by the Company, the Ophthalmologist shall also render his medical services free of cost. 12.1 Ophthalmologist will inform the com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any, as only the assessee is liable for any professional negligence and he has indemnified the company. 13. 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'. 14. The Hon'ble Andhra Pradesh High Court in the case of CIT vs. Yashoda Super Speciality Hospital held as follows: * "The Tribunal as well as the Commissioner (Appeals), on facts and on examining the agreement of engagement of the consultant doctors by the assessee, found that there is no relationship of employer and employee. After examining the agreement and various t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ree to carry on their private practice in their own clinics outside the said hospital beyond the hospital time. [Para 8] * In the present case, it has been recorded that the doctors were entitled to admit, investigate and provide treatment to the patients and that the doctors would be responsible for their clinical care. The doctors were responsible for supervising the subordinate staff whereas the facilities of the hospital staff, paramedical and nursing staff would be provided by the hospital along with the necessary equipment to render services to the patients. 15 per cent of the fee collected by the doctors would be deducted by the hospital as its share and the balance 85 per cent would be paid to the doctors after deduction of tax a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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