Disaalowance of Expenses claimed under PGBP - Clubbing of PGBP and Salary income

[SRIDHAR NARASIMHAN]

The assessee is a senior neuro surgeon in a hospital attached to a medical college. His income consists of a)fees received for surgery done to inpatients of the hospital and other OP consultancy and the same is paid to hospital first which remits into assessee's bank account after deducting TDS. b) a honorarium for being a senior faculty in the college attached to the hospital for which he is issued form 16. The assessee is aged 64 and has attained super annuation and has no PF and the salary is a static one. The Income Tax deparartment has disallowed expenses claimed under the head Profession and has chosen to club both professional and salary income under the head salary. The assessment is opened u/s 263 and for the show cause, we have quoted Dr.Shanti Sarup Jain V First ITO, 1987(21) ITD 494 but the order has been passed against the assesee. The order is proposed to be appealed. Would like to know if there are High Court /Supreme court Decisions on the above issue.

AI Summary

Neurosurgeon Challenges Income Tax Ruling: Disallowed Expenses and Income Classification Dispute Under Section 263 An individual, a senior neurosurgeon at a hospital affiliated with a medical college, receives income from surgical fees and an honorarium as a faculty member. The Income Tax Department disallowed expenses claimed under 'Profession' and combined professional and salary income under 'Salary.' The assessment was opened under section 263, and despite citing a precedent, the order was unfavorable. The individual plans to appeal and seeks relevant High Court or Supreme Court decisions. A respondent argues that the tax authority's view is incorrect due to the lack of an employer-employee relationship, suggesting a favorable case for the individual.