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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 ..... onship between the assessee and the hospital. There is no vicarious liability on the company, as only the assessee is liable for any professional negligence and he has indemnified the company. 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 . As already stated, the AO has assessed the income under the head income from business or profession . No reason is given for disallowing the claim of the expenditure except that such deduction is not allowable when computing income under the head salary . This finding has been overruled by us. Thus, we direct the allowance of the amount of expenditure as claimed by the assessee. - Appeal of the assessee is allowed. - I.T.A. No. 1665/Kol/2017 (Assessment Year: 2013-14) - - - Dated:- 11-12-2019 - Shri J. Sudhakar Reddy, Accountant Member And Shri S.S. Godara, Judicial Member Sh. Sidharth Agarwal, AR, appeared on behalf of the Assessee. Sh. Supriyo Pal, JCIT, Sr. DR, appeared on behalf ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y of agreement entered into by the assessee with Vasan Healthcare Private Limited and pointed out that, on the reading of the terms of this agreement it is very clear that it was a contract for rendering services as a professional and not a contract where there was an employer-employee relationship. He took this Bench to the various clauses 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 salary is factually incorrect and against the terms of the agreement under which the amount in question is pai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vely with the Company for rendering medical services as an ophthalmologist for a term of 4 years with the Company. We extract some of the clauses for ready reference: 3.1. During the tenure of this agreement the Ophthalmologist shall render professional medical services in the field of ophthalmology to the patients seeking medical services at the Eye Hospital/s. During the term of this Agreement, Ophthalmologist shall devote his best efforts to the professional services and shall perform the same in a competent and supportive manner. 4.1 The Ophthalmologist agrees that the Ophthalmologist shall render the services exclusively to the Company and shall not be engaged in any medical practice, services or work either for gain, pro-Bono services, charitable activities or gratis either individually or for any other individual, hospital, institution, organisation or body. In case the Ophthalmologist is already engaged in previous commitments, then the same shall be concluded within a period of 2 months from the Effective Date hereof save and except, and with prior discussions with the Company, the Ophthalmologist may continue to render n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rusal of these clauses of the agreement demonstrates that there is no master-servant relationship between the assessee and the hospital. There is no vicarious liability on the company, 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 terms and conditions, it was found that the doctors are not administratively controlled or managed by the assessee and they are free to come at any point of time as far as their attendance is concerned and treat the patients. In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed that the earnings of the doctors would be dependent upon the patients that the doctors would attract. [Para 9] The Tribunal has not committed any error. Significant features of the contractual relationship between the doctors and the hospital in the present case were that the hospital would provide support service where a particular patient would be treated by a doctor. The sharing was in the proportion of 15 per cent v. 85 per cent between the hospital and the doctors. Contractual tenure of these doctors was for a period of one year which would be renewable depending on the performance of the doctor to be assessed by the Medical Advisory Council of the hospital. These doctors were not entitled to benefits of leave encashment, gratuity, provident fund, superannuation benefits, etc. which regular employees of the hospital are. These doctors would on their own obtain indemnity insurance. These are clear indications that the relationship was not one of employer-employee. [Para 10] In view of aforesaid, impugned order passed by the Tribunal did not require any interference. 16. Applying the propositions of law laid down in the ..... 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