Consultancy Fees to doctors from firm - treatment

[Raghavendar]

Dear Experts,

A partnership firm (all the partners are doctors) runs a hospital, and paid consultancy fee to partners for their services in the hospital; this consultancy fee is paid apart from allowable remuneration under the income tax act. Is this allowed in the income tax act?

Please refer to any case law, if possible.

Thanks in advance

AI Summary

Treatment of consultancy fees to partners: such payments are treated with partner remuneration limits and tax restrictiveness.
A partnership of doctors paid consultancy fees to partner-doctors in addition to remuneration; while one view treats such consultancy as separate professional earnings, the prevailing judicial reasoning treats consultancy fees and remuneration together under the statutory ceiling on partner payments and holds that partners cannot be characterised as external experts to avoid statutory restrictions on firm expenditure.