9911796707
TMI Blog2012 (10) TMI 91X X X X Extracts X X X X X X X X Extracts X X X X ..... o the assessee. The assessee had worked as Honorary consultant at various other Hospitals in earlier years and his income was taxed as professional income. Therefore, assessee cannot be said to be an employee and his income can only be taxed under the head income from business and profession – Decided in favor of assessee. - I.T.A. No.2323/Del/2009 - - - Dated:- 27-7-2012 - SHRI RAJPAL YADAV AND T.S. KAPOOR, JJ. Appellant by : Shri Devender Singh, CIT-DR. Respondent by : Shri Ashwani Taneja, Advocate. ORDER PER TS KAPOOR, AM: This is an appeal filed by the revenue against the order of Ld CIT(A) dated 12.3.2009. The grounds raised by the revenue are as under:- Whether in the facts and circumstances of the case, the Ld CIT(A) was justified in directing to treat the receipts of Rs..42,00,000/- from M/s Forties Healthcare Ltd. as business income ignoring the fact that the assessee was working as employee and not as retainer, which agreement was subsequently formalized as employment agreement with effect from 1.7.2006. 2. The brief facts of the case are that assessee is a Doctor and has filed his return of income declaring total income of Rs.. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) the master s power of selection of the servant; b) the payment of wages or other remunerations c) the master s right to control the method of doing the work and d) the master right of suspension or dismissal. 3. The Assessing Officer held that clauses 1,3,5,9 10 of the retainership agreement fulfills all the conditions as set out by Hon'ble Supreme Court in the above noted case and therefore he held that their existed a relationship of employer-employee and in view of the above assessed receipts from Forties Hospital as income from salary. 4. Aggrieved the assessee filed appeal before Ld CIT(A) and submitted as under:- 1. That Assessing Officer had not considered Form 16A issued by the Forties Healthcare Ltd. which clearly states that the nature of payment is fee for professional services. 2. That Assessing Officer had not considered specific certificate dated 15.10.2008 from Forties Healthcare Ltd. certifying that the assessee was a professional consultant. 3. That the Assessing Officer has construed his own meaning of the clauses stated in the retainership agreement so as to give it a shape of employee-employer relationship. 4. That clause (1) of agreement ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... auses for either any revision or any discretionary power of the management for revision in the retainership amount. iii) The contract is for a fixed period of one year unless there is mutual agreement to extend it further on mutuality agreeable terms. iv) The company has no right to bind the assessee for transfer from one place to another. v) There are no clauses for superannuation of the assessee which is a must in any employment clause. vi) There is no binding on the assessee to adhere to the rules, regulations and policies of the company but only a commitment from the assessee to follow the rules, regulations and policies of the company. The assessee may or may not follow and if he does not follow, he will not be liable for punitive action as he has only made a commitment and has not bound himself to the rules, policies etc. The assessee may try to do so but is not bound compulsorily to follow rules, regulations and policies and work ethics of the company. 6. With effect from 1.7.2006, the assessee has taken up employment with M/s Forties Healthcare Ltd. and as per employment letter dated 24.7.2006 issued by forties Healthcare Ltd. and as per retainership agreement t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ulations of the Organization. vi) Past Record- Under the employment contract, the assessee is required to provide past records to the company and is liable for removal from services if the past records are false. There is no such clause under the retainership agreement. vii) Retirement Under the employment contract, the assessee is to retire on attaining the age of 58 years. However, in the retainership agreement is only for limited period of one year and the renewal of the retainership agreement is subject to mutually agreeable terms. viii) Termination of employment Under the employment contract, the termination can be by either side by three months notice or salary in lieu thereof but under the retainership agreement the contract can be terminated by three months notice or payment of three months minimum assured amount in lieu thereof. ix) Medical Fitness Under the employment contract, the employment is subject to the assessee remaining medically fit whereas there is no such clause under the retainership agreement. x) Other benefits The annexure to the employment contract gives the details of compensation along with various other benefits like bonus, gratuity an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ITR 22. In fact, any person employing a consultant would have to necessarily retain some power to get the work done in an efficient manner. It would also have the power to terminate the consultancy as is evident from clause 10. All these provisions, however, do not necessarily create a relationship of master and servant. The fact that this relationship was not that of masterservant is also established from form No.16A issued by M/s Fortis Healthcare Ltd. It indicates that the payment was made for fees for professional services and there is no reason to disbelieve this. It is further seen that the agreement was for one year and could be renewed with mutually agreeable terms. There is no provision of increments/salary revision, transfer and posting, retirement, leave, other benefits etc. in this agreement. These are normal conditions which are found where employer-employee relationship exists. It is also noticed that in the next year i.e. from July, 2006 the appellant has been appointed as full time employee of the company with the benefits of salary revision, leave benefits as well as provision for retirement and retrial benefits. In view of these facts, it does not appear to be c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f retainership and nature and extent of duties performed by the assessee that there is a very thin difference between holding assessee as employee or as professional All requirements for holding the assessee an employee does not exist as per the agreement for retainership. Generally and practically employments are always for a long period than one year which is not in the present case which is only for one year. Secondly, employment contracts generally carries various other benefits like bonus, gratuity, HRA, Medical allowance etc. whereas in the present case only lump sum payment per month was fixed for the period of retainership. 14. Moreover, the benefit of consistency cannot be denied to the assessee. The assessee had worked as Honrary consultant at National Institute of All India Heart Foundation from 14.4.1989 to 31.5.1998 and for all these years his income was taxed as professional income. The return of income along with computation sheet and P L, Balance sheet for the year 1996-97 1997-98 placed at pages 137-155 proves this fact. Similarly from 1998-99 to 2000-01, the assessee worked for Sir Ganga Ram Hospital and his income was taxed as professional income. The retur ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
