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TMI Blog2018 (1) TMI 791X X X X Extracts X X X X X X X X Extracts X X X X ..... We also note that vide letter dated 19.11.2007 issued by Chief Legal Officer & Company Secretary, M/s Seamec Limited which was addressed to the ITO/AO, Ward-1, Rohtak of the assessee for furnishing information called u/s. 133(6) of the I.T. Act, 1961, has clearly mentioned that the work was in the nature of the contractor. The payments made by the said companies are for Technical Services rendered by the assessee. It is therefore, held that that the assessee has only Business Income and not Salary Income, hence, the professional contracts carried on by assessee are treated as ‘contract for service’ and not ‘contract of service‘, therefore, accordingly appropriate expenditure are allowed and as a result, the grounds taken by the assessee stand allowed. - ITA No. 3897/Del/2009 - - - Dated:- 8-1-2018 - SHRI H.S. SIDHU, JUDICIAL MEMBER AND SHRI L.P. SAHU, ACCOUNTANT MEMBE For The Assessee : Sh. U.S. Aggarwal, Adv. For The Revenue : Sh. Kaushlendra Tiwari, Sr. DR ORDER PER H.S. SIDHU, JM The Assessee has filed the Appeal against the impugned Order dated 27.08.2009 of the Ld. Commissioner of Income Tax (Appeals), Rohtak pertaining to assessment year ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aid impugned order of the Ld. CIT (Appeal), Rohtak, Assessee is in Appeal before the Tribunal. 4. At the time of hearing, Ld. Counsel of the assessee has stated that the Hon ble High Court of Punjab Haryana at Chandigarh vide its order dated 02.12.2015 in ITA No. 242 of 2011 (O M) has remanded the matter back to the Tribunal to decide the Appeal of the assessee afresh, keeping in view the principles laid down by the Hon ble Punjab Haryana High Court in M/s Ivy Health Life Sciences Pvt. Ltd., Mohali Punjab s case. He further stated that the contract carried out by the assessee with the Marine Companies are contract for service and not contract of service , hence, requested to allow the expenditure accordingly. 5. Ld. DR relied upon the orders of the authorities below. 6. We have gone through the orders passed by the revenue authorities as well as the order dated 02.12.2015 of the Hon ble High Court of Punjab and Haryana at Chandigarh in the case of assessee and the decision dated 26.8.2015 in the case of CIT vs M/s IVY Health Life Sciences Pvt. Limited in ITA No. 142 of 2013. We find that in the first round, the AO vide his assessment order dated 05.12.2008 treated t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e does not exist employer-employee relationship between the assessee and the persons providing professional services. It has been further recorded that on consideration of the agreement in its entirety vis a vis the case law relied upon by the assessee, it is evident that it is not a case of employer-employee' relationship between the assessee and the doctors. It was noticed thus:- We have heard the rival submissions, facts of the case and the relevant records. The brief facts of the case are that the appellant company is running a hospital, known as Ivy Hospital at Mohali. The Department conducted a TDS inspection under section 133A of the Act, at the business premises of the assessee appellant on 28.9.2011. During the course of such inspection and assessment proceedings under section 201(1)/ 201(IA) of the Act, it was noticed by the ACIT(TDS) that the hospital is running different OPDs, apart from indoor patients treatment. The procedure of treating patients in OPD is that when a patient comes for the treatment in Hospital's OPD, he deposits a consultation fee for the particular Medical Department in which he wants to consult, at the cash counter of the hospital ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2,50,112/- 'under section 20 I (1 A) of the Act. 7. Learned CIT(Appeals) on appreciation of the factual matrix of the Act and case laws cited by the appellant, adjudicated the issue in favour of the assessee appellant, as per following finding:- '5. I have considered the submission field by the learned counsel. I have also gone through the MOUs between the appellant company and professional doctors. The various clauses of the MOUs need to be examined in the light of the criteria laid down by the courts to determine whether the doctors attached to the appellant hospital are employees of the hospital. The test which is uniformly applied in order to determine whether a particular relationship amounts to employeremployee 'relationship is the existence of right of control in respect of the manner in which work is to be done by the person employed. The nature and extent of control which is requisite to establish the relationship of employee and employer varies from business to business. 8. A bare perusal of the case law relied upon by the appellant and submissions made in the synopsis reveals that there does not exist employer 'employee relationship ' ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dia) Ltd. to the assessee i.e. SK Hooda for contract for diving services. For the sake of convenience, the conditions of the Contract, which were accepted by the Assessee are reproduced hereunder:- Sub CONTRACT FOR DIVING SERVICES We are pleased to offer you a service contract for services to be rendered from time to time as a E.T. on Seamec-1 Dulam Project under our management, on the following terms and conditions :- 1.0 SCOPE OF WORK 1.1 During this period of this service contract you will work exclusively for the Company and will not take up employment/render services to any other organization without the written approval of the Company. 1.2 Your services will normally be as per our clients requirement, you may be required to demobilise at an early date depending upon the clients. requirement and schedule of work. In case of such early demobilisation, there shall be no additional compensation payable. 2.0 DURATION OF CONTRACT 2.1 This contract is subject to your holding the necessary certification, medical clearances, and your continued satisfactory performance. 2.2 This service contract will be automatically terminated on the same date as t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... source is 5.25%. 6.0 OTHER MISCELLANEOUS CLAUSES 6.1 The Company reserves the right to recover additional costs from you that the Company may face if there is any delay in your reporting to base for mobilization to worksite as / schedule programme without prior permission or valid reasons. 6.2. The relationship between the Company and you will be that that of a contractor and sub-contractor. It is not the intention of the Company or yourself to establish an employeremployee relationship in any manner whatsoever, and accordingly, none of the acts, deeds, correspondence or interactions between the two parties shall in any way construe a relationship other than as a contractor-subcontractor. 6.3 You will be required to furnish a copy of a valid medical certificate issued by a Company approved doctor to the office prior to your joining the vessel for the first time and annually thereafter. You will also need to submit a medical certificate prior to rejoining the vessel if you were medically evacuated from the vessel due to sickness or injury. 6.4 Medical cover will be provided to you for medical attention and hospitalisation at nominated hospitals if you ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lakhs. Policy No. (02100/42/05/00556). 3. Air Ticket Economy Class Up/Down or an amount equivalent to the Economy Class Air Fare to the nearest Airport to hometown will be paid for person residing outside Bombay /New Bombay. 4. Transportation of ₹ 750/- per round trip will be payable for reporting to airport. 5. For transit half outstation candidate will be provided free accommodation to join the vessel at Bombay and an amount not exceeding ₹ 500/- per day will be reimbursed towards meal charges on production of receipt. 6. In case of no accommodation food etc. are required by such outstation candidate he will be paid ₹ 2250/- per round trip for such transit halt. 7. This contract is valid for a period of 1 trip only w.e.f. 15.11.2005. During this period you will be providing services exclusively to M/s South East Asia Marine Engineering Construction Ltd. 8. One boiler suit and one pair of safety shoes will be provided per year. 9. Day on / day off half day rate will be applicable. However, if for any reasons after reporting at airport the person is unable to board the flight, then quarter day rate will apply. Point of m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dressed to the ITO/AO, Ward-1, Rohtak of the assessee for furnishing information called u/s. 133(6) of the I.T. Act, 1961, we find that the assessee is a retired Electrical Technician from the Defense Department, Govt. of India, currently is working as a contractor of electrical maintenance on board of different companies vessels. He has more than 30 years experience as electric maintenance engineer with Indian navy and private vessels on high seas. We further find that the entire agreements executed between the contracting company and the assessee, it is clearly evident that the nature of work executed by the assessee for the Marine Companies is in the nature of a contract. There is no employer employee or master servant relationship. There is also no permanent contract. It ranges from 6 weeks to 8 weeks only. The contract amount is paid to the assessee by the companies on the basis of day to day working and no payment was made for the off days. The agreements clearly stipulates the word Contract and nowhere the word remuneration or salary or wages is mentioned. The payment on day to day basis on fixed amount does not mean that the assessee is in service of the contracting com ..... X X X X Extracts X X X X X X X X Extracts X X X X
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