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TMI Blog1987 (2) TMI 96X X X X Extracts X X X X X X X X Extracts X X X X ..... in the nature of honorarium for rendering services to the Bombay Hospital in the General Ward. (iii) In law, it is well settled that there cannot be a contract of employment unless the employer has the right to control the manner in which the employee works. In the absence of any rules and regulation regarding the fixed hours of work the amount received from the Bombay Hospital cannot be treated as salary. (iv) The Bombay Hospital does not control the manner in which the work of the Doctors are conducted. The hours of work, both consulting and operative, are decided by him depending upon his convenience. (v) There is no requirement that he should perform a particular number of operations or he should examine a particular number of patients in the consulting Room and the Hospital has not reserved any right to regulate the work of doctors in any particular manner. (vi) The Hospital does not provide any facility in the form of Dearness Allowance, provident fund, gratuity, etc. (vii) The age of retirement is not fixed and there are no terms or rules regarding leave which can be taken by him and he is free to on vacation whenever he decides to do so. However, during the period ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... employee of the hospital. Assessee is appointed as a Consultant under the contract wherein it is agreed that some honorarium, i.e., Rs. 1,000 per month would be paid to the assessee and the hospital would provide him a consultancy room and in lieu of providing consultancy room, assessee have to share the fees charged by him from the patients in his consultancy room. He also drew our attention at pp. 23 to 26 of the assessee's paperbook containing the appointment letters issued to various Doctors of the Bombay Hospital who are really employees of the hospital and are subjected with the rules, regulations and service conditions provided by the Bombay Hospital and the hospital also was authorised to terminate the services of these Doctors; while in the case of the assessee, there was no such service rules and regulations applicable. His service also cannot be terminated as in the case of normal employees of the Bombay Hospital. He is not supposed to take any permission for practice in any other place other than Bombay Hospital. Therefore, factually, it cannot be said that in any respect, Dr. Jain is an employee of the Bombay Hospital. Therefor, his professional income in the form of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s available to other employees. Assessee has his own staff in his consultancy room. They are not employees of the Bombay Hospital. Assessee owns his own telephone in the consultancy room and other equipments and furnitures in the consultancy room which belongs to the assessee. In support of that, assessee has shown payment of telephone bills and other expenses incurred in maintaining the consultancy room. Details are placed from pages 5 to 10 of assessee's paperbook. In the case of appointment letters issued to other Doctors-employees, the hospital authorities have clearly mentioned the period of probation, and they are subjected to the rules, terms and condition of the hospital. Their services also can be terminated by giving one month's notice on either side. Appointment letters of the Doctor-employees placed from pp. 23 to 26 in the assessee's paperbook are placed for our perusal. These facts are not disputed by the learned D. R. Sri Vohra. Even on a specific inquiry from the Bench to Sri Dastur whether the letter of appointment of the assessee and other details including the material supporting the expenses were available to the ITO at the time of assessment, the answer of Sri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he contract of employment. (f) fixation of time and place of work-in case of contract of employment, one party has the power to fix the hours or times when a person is to work, or when he is to take his holidays. (g) Whether one party to the contract is entitled to delegate the entire performance of his work to another person in that case, it cannot be said that the contract is a contract of employment. (h) obligation to work or to employ-if it is entirely left to one party to contract to choose whether or not to work, then that cannot be said to be a contract for employment. (i) whether one party to the contract (so-called employee) is entitled for the benefit or facility of Dearness allowance, Provident fund, gratuity, etc. (j) lastly, the most important test to ascertain whether it is a contract for employment or not, depends upon the intention of the parties. In the agreement or appointment letter, it is to be seen what is the genuine intention to transform an employment relationship; whether both the parties to the contract or agreement have intended to have relationship as employer and employee. If in the agreement or the appointment letter, there was no such intent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -6-1986 in the case of Dr. M. G. Naraini was placed for our perusal. It is seen that in spite of the inquiries directed by the Commissioner, ultimately again it is found that the professional fees received from the hospital should be assessed under the head 'Income from profession'. The intention of the authorities of the Bombay Hospital is expressed in the appointment letter. They further remove the doubt whether a consultant like the assessee in the hospital, is an employee or not. In their letter to the Chairman, CBDT dated 18th March, 1986, they have stated that the word 'salary' in the appointment letter is in reality a honorarium and that should be treated as honorarium and not salary. They have stated clarifying the facts as under:-- (a) Each of the aforesaid consultants is provided by the Hospital with consulting rooms with essential furniture, in the Hospital premises, for convenience of patients. (b) They have their own staff employed by them and paid by them, working for them as per timings fixed by the said consultants. (c) The consultants have their own medical equipments and instruments in the consulting rooms. (d) Patients, whether indoor, general ward, or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a conclusive factor to determine whether there was an employer-employee relationship. In interpreting the contract or the appointment letter, it is the duty of the Court to take a reasonable interpretation of the documents as a whole, instead of taking a literal interpretation which does not fit in with the intention of both the parties. When both the parties are not treating themselves as employer and employee, we do not find any justification in the directions of the CIT to set aside the order of the ITO. Therefore, taking into account the facts stated above which are not disputed and the intention of the parties in the letter dated 1st March, 1965, and their conduct thereafter, we are of the view that assessee is not an employee of Bombay Hospital, merely taking the literal meaning of the word 'salary' is not enough to deny the claim of the assessee. The hospital authorities themselves have clarified that salary was not the correct word used in the appointment letter, that is, in reality a honorarium to the consultants/experts in the hospital. When the authorities themselves have clarified the doubt regarding the literal meaning of the word 'salary', we have no hesitation in co ..... X X X X Extracts X X X X X X X X Extracts X X X X
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