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TaxTMI 
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2013 (11) TMI 1551
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....8) by the Dy. CIT (TDS), Jaipur. 2. A TDS survey was carried out by the Revenue at the premises of the assessee, a company running a hospital by the name 'Fortis Hospital' at JLN Marg, Jaipur on 13-08-2008. Certain discrepancies in the tax being deducted and or not deducted by the assessee-company were observed and, consequently, demands u/ss. 201(1) and 201(1A) were raised. Being not satisfied with the partial relief secured in first appeal, the assessee has preferred second appeal before us, raising four grounds, even as the same admittedly relate to three issues, separately argued by the ld. AR, the counsel for the assessee before us, and which we shall take up in seriatim. The Revenue also contests the partial relief allowed to the assessee. 3. The assessee was observed to have paid 'blood processing charges' in the sum of Rs. 8,32,458/- to blood banks, as, e.g., Santokbbha Durlahji Memorial Hospital Cum Medical Research Institute ('SDMR' for short). The Assessing Officer (AO) was of the view that the said payment stood covered u/s. 194J of the Act and, accordingly, queried the assessee in the matter. The assessee, vide its office letter dated 21-0....
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....ple copy of the bills issued by them, including that referred to by the AO to SDMR (PB pages 1 to 20), it was submitted that same are only in the name of the concerned patient; the name of the assessee being mentioned as a consultant or as the institution referring the patient. The blood processing is done by the concerned blood bank not for and on behalf of the assessee, but only for the concerned patient. As such, there is no outsourcing of the said facility by the assessee from the blood banks. So however, as the assessee has charged the patient a consolidated amount for the entire treatment, including in relation to the blood processing charges, the amount paid by the patient is deducted from the respective bills on production thereof by the patient. On being questioned by the Bench, if there is any payment by the assessee-company to these blood banks against the services rendered to its different patients, he categorically replied in the negative. 5.1 The first question, therefore, that arises is as to the nature of the charges levied and paid to the blood bank. The same would without doubt fall within the scope of technical services as contemplated u/s. 194J of the Act. We....
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....ets (RPD), again, blood components. The tests required would be either mandatory by law or as specified by the assessee. This is as while certain tests would be uniformly applicable, viz. to meet the safety standards, certain others would be patient specific, so that the blood to be transfused is compatible with the patients's blood, given his blood and health profile, viz.. blood group while certain tests would be uniformly applicable, viz. to meet the safety standards, certain others would be patient specific, so that the blood to be transfused is compatible with the patients's blood, given his blood and health profile, viz. blood group. 5.3 The services being rendered by the blood banks are thus an adjunct to and linked with, and not de hors, that being rendered by the assessee, as sought to be made out before us. This is relevant as the assessee has already charged the patient a composite fee, i.e., for services including these services, so that it can only be considered to have a fair idea of the nature and cost of the services required. Would not the assessee seek redressed if the services rendered by the blood bank, are not up to the mark? For example, where the b....
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.... and very aptly, the provision of section 194J, as in fact any other, does not oblige the person making the payment to deduct tax at source, but the person responsible for so paying. It is clear that the arrangement obliges the assessee to bear the cost of processing charges being charged by the blood bank. As such, it is the assessee who is responsible for the payment thereto, though same may have been or is being collected from the patient (or their relatives) in the first instance. We, accordingly, uphold the Revenue's stand of the assessee being liable to deduct tax at source on the impugned payments to the blood banks, depicted in its accounts as 'cost of medical services', further bearing the narration 'blood processing charges'. So, however, and without prejudice to the foregoing, the payee blood banks would only be assesses on the records of the Revenue, who would have returned their income for the relevant years, including that received through the patients of the assessee-hospital serviced by them. Surely, there can be no double collection of tax by the Revenue, though the onus to adduce evidence to the effect that tax or; the impugned sum/s has ind....
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....n respect of any of them during hearing. 6.2 The ld. DR, on the hand, would submit that it is incorrect to say that the relationship arrangement operates to remove the payment to the concerned doctors from the ambit of 'salary', being only the remuneration for services arising out of and in course of their employment by the assessee-company, with the concerned doctors having been duly issued appointment letters. He would take us through the sample agreements, referring to one such produced by the AO at pages 5 and 6 of his order. The authorities below have duly considered the case law being relied upon by the assessee. 7. We have heard the parties, and perused the material on record. 7.1 It would be necessary to review the law in the matter, as explained by higher courts of law, i.e., defining the constituents of, or the essential ingredients of what constitutes, salary, before we proceed to apply the law as explained to the facts of the case. The sine qua non for chargeability of a sum under the head 'salary' is that there must be an employee-employer relationship between the person making the payment or on whose behalf the payment is made, and the assesse....
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....dition for holding the payment as 'salary'. 7.2 A sample written agreement by way of an appointment letter has been reproduced at pages 5 to 6 of the order u/ss. 201 and 201(1A ) of the Act. The same is para materia with the agreements placed at pages 32 to 35 of the assessee's paper-book. The doctors retained have been appointed variously as. Senior Consultant, Sr. Resident, Consultant Anesthesia/Cardiology, etc. The services to be rendered have been prescribed. The consideration for the same, as well as the manner of its payment, i.e., monthly, is again defined. the authority in the assessee-company's hierarchy, to whom the retainer doctor is to report, is specified. The general rules and regulations of the assessee-company, as applicable to and governing its work, as well as the conduct, other professional and general, have also been prescribed in adequate detail the conditions which may lead to the termination of the arrangement, and the manner thereof, is also clarified, and which includes a failure or refusal to carry out the duties assigned. In view of the foregoing, on which there is no doubt or dispute, we are unable to see as to how the contract is not ....
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.... the file of the AO to work out the demand in accordance with the law as explained by the hon'ble apex court in the said cited case, as also any other applicable case as brought to his notice, as well as the applicable CBDT circulars, being binding on him, and per a speaking order, after allowing the assessee a reasonable opportunity of being heard. We decide accordingly. 8. The third and fourth grounds are in relation to assessment year 2008-09, and in respect of the liability to TDS on what is termed as purchases by the assessee-company from Fortis Health World Ltd. ('FHWL' for short). The same is as per two separate arrangements, one in respect of medicines for in-patient, i.e., the IPD Pharmacy, and the other for out-patients, or the OPD Pharmacy. There is no dispute with regard to the supply of medicines from the OPD Pharmacy, where there is an outright sale to the patients, and in consideration of being allowed to run and manage which, i.e., the said pharmacy, FHWL is to pay the assessee's monthly charges equivalent to 8% of the net revenue or Rs. 25,000/-, whichever is more, deducting TDS thereon u/s. 194-I. However, with regard to the IPD Pharmacy, the as....
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....le is not at arm's length price, but would that by itself be sufficient to impugn the supplies made as not sales? There is no question as to the genuineness; the two entities forming part of the same group. In fact, such an arrangement would not be workable otherwise, as nobody would, unless otherwise contractually bound, disclose his purchase price, and thus defeat its own cause while negotiating the sole price with his customer. The fact that the assessee also reimburses the manpower cost, which again is something that would not stand to be revealed and, rather, not relied, only goes to show the close proximity of the two partners, and is by way of defining and determining the revenue streams of FHWL, thus, essentially enabling it know its stakes as well as the revenue it stands to gain from the said business. We have also perused the relevant ledger account (PB pgs 115 to 119), which reveals the parties observing the said agreement scrupulously. There was no occasion to pay interest for delayed payment and, consequently, no occasion to deduct lax at source thereon during the relevant year. 9.2 Though the foregoing appears impressive at first blush, the assessee's arra....
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....rence to the same in his another order, which he purportedly follows. We further observe that FHWL is not charging anything over its actual (labour) cost to the assessee-company. Why would then it so function, i.e. without any gain! The mark-up on the turnover is thus only in relation to these services contracted to the assessee-company by FHWL. That is, the cost of these services to the assessee is not only the actual cost as borne by FHWL (on which the tax at source is being deducted by the assessee u/s. 194C) but also the mark-up - as specified - on the turnover achieved. The same (mark-up) thus forms part of the cost of the manpower services contracted to the assessee-company, liable for deduction of tax at source u/s. 194C. In arriving at our conclusion, regard has also been made for other related aspects. There is nothing to show any deployment of capital by FHWL in business. Even otherwise, the same is of little consequence in view of its incapacity to do any business, as discussed hereinbefore. Also, FHWL has no other organizational costs, i.e. apart from manpower cost; the cost of other inputs, in the form of office and work space (as say for locating staff, sales and s....
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....ear 2008-09 is by assessee and other two appeals are by the department. 2. These appeals were heard on 17.4.2012. These appeals were allotted to learned Brother Shri Sanjay Arora, Accountant Member. I have received the order of Ld. Brother and after going through the order, 1 am not able to persuade myself to the decision arrived at by my learned brother. Therefore, I am writing my own order on the basis of material available on record and after taking into consideration the submissions of both the sides. 3. I will take first appeal in ITA No. 363/JP/2011 by assessee. 4. First ground in appeal of the assessee is against that the Assessing Officer is justified in holding that the charges paid to blood bank are covered under the provisions of section 194J of the IT Act and hence the assessee is in default under section 201(1) and 201(1A). 5. The brief facts in this regard are that a TDS survey was carried out in the assessee's case on 13.8-2008. During the survey proceedings, the assessee was asked to submit details of various expenses and the TDS deducted thereon. On verification of the said details the Assessing Officer noticed that assessee had paid blood processin....
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....ade/raised before the Assessing Officer which have been taken into consideration by the Assessing Officer. After considering the order of Assessing Officer, the Ld. CIT(A) noted that Assessing Officer was correct in treating the assessee in default in terms of section 201(1) and 201(1A). Accordingly, the finding of Assessing Officer was confirmed by Ld. CIT(A). 7. Detailed submissions were advanced by Ld. A/R during the appellate proceedings. The reliance was placed on the written submissions filed. Further, attention of the Bench was drawn on copy of written submissions filed before Ld. CIT(A) which is placed on record at pages 21 to 30 of Paper Book. 8. On the other hand, the Ld. D/R has placed reliance of the orders of authorities below. 9. I have considered the submissions of both the-parties and the relevant material on record. Copy of written submissions filed on behalf of the assessee is placed in the compilation which comprises of 23 pages. Copy of written submissions filed before Ld. CIT (A) is priced at pages 21 to 30 of the compilation. After going through the order of Ld. CIT (A) and submissions, 1 find that assessee deserves to succeed in this ground. The Ld. ....
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.... SDMH, therefore, there was no question of deducting the lax on the payment made by the patient Tulsi Ram to SDMH. If the contention of the Assessing Officer is accepted, then the question will arise that to whom the TDS certificate will be issued by the assessee hospital. The assessee hospital can not issue any TDS certificate to SDMH as assessee hospital has not made any payment to SDMH. In fact, as stated above, the payment has already been received from the patient Tulsi Ram as per package and when the packed red cell was obtained by patient from SDMH after making payment, then to that extent the amount was adjusted against bill of Tulsi Ram, issued by the assessee hospital. It means that this is a case of refund to patient Tulsi Ram and on refund no TDS is deductible as per provisions of law. 11. I further noted that on similar facts, the Assessing Officer for assessment year 2009-10 treated the assessee in default in terms of section 201(1) and 201(1A). Assessee preferred appeal before Ld. CIT (A). Similar written submissions, rather it can be said that identical written submissions were filed before Ld. CIT (A) who after considering the order of Assessing Officer gave fol....
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.... order, I hold that assessee has not committed any default in terms of section 201(1A) also. This ground of the assessee is allowed. 11.1 This covers the ground nos. 1 & 2 of appeal of the assessee. 12. Ground No, 3 is against that in ascertaining that the Ld. Assessing Officer is justified in applying the provisions of section 192 of the Act on the payments made to retainer doctors. 13. The facts in this regard are that the assessee was employing doctors in the categories of empanelled doctors and retainers and the assessee was deducting TDS under section 194J of the Act from payment made to those doctors. In this connection, the Assessing Officer went through the sample appointment letters issued by the assessee i.e., in the case of empanelled consultants and also in the case of retainer doctors. On consideration of the same, the Assessing Officer was of the view that retainer doctors were employees of the assessee. The Assessing Officer noted that the conditions mentioned in the appointment letters are the same for other retainers and empanelled doctors. The main features of appointment of an empanelled doctor are that he should give consultation to out-patients, to in-....
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....the decision of Hon'ble Supreme Court in case of Hindustan Coca Cola Beverages (P.) Ltd. (supra), no liability is to be created in terms of section 201(1) of the Act and alternate submission was also made that the Assessing Officer has also not computed the liability under section 201(1)/ 201(1A) of the IT Act properly. After considering the submissions, the Ld. CIT (A) allowed the issue in part. The Ld. CIT (A) upheld the finding of the Assessing Officer that the relationship between the assessee and the retainer doctors was essentially that of employer and employee relationship and, therefore, fixed monthly payment to the retainer doctors was in the nature of salary. 13.4 Reliance was placed on the decision of Delhi Bench of Tribunal in case of St. Stephen's Hospital (supra), by the Assessing Officer. However, in view of the decision of Hon'ble Supreme Court in case of Hindustan Coca Cola Beverages (P.) Ltd. (supra), the liability under section 201(1) has been cancelled for the reason that they have already paid tax on the amount of receipts. No finding has been given in respect of other retainer doctors in respect to the fact that if they have filed the return and....
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....tal, they have been disclosed by retainer doctors in their income-tax return. Therefore, this is not a case of evasion of tax. Assessee has already deducted tax under section 194J and there is no dispute in this regard. The Assessing Officer and Ld. CIT (A) has considered the decision in case of St. Stephen's Hospital (supra). However, they have ignored the decision of Hon'ble Delhi High Court in case of Coastal Power Co. (supra), in this case it has been held that the consultants are employed on temporary basis and the contracts are generally renewable after the expiration, they are not entitled to participate in any welfare benefits, plans or programs maintained by the assessee like medical plan, accidental death plan etc. In such circumstances, it was held that the provisions of section 192 of the IT Act were not applicable. This decision is tendered by the Hon'ble Delhi High Court and, therefore, Assessing Officer should have taken into consideration instead of taking a decision of Tribunal of Delhi Bench. It is further seen that the Assessing Officer has relied upon a decision of Hon'ble Supreme Court in case of Justice Deoki Nandan Agarwala (supra) wherein it ....
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....e submissions filed by the assessee. Copy of this decision is also placed on record. 16.4. 1 further noted that in subsequent year in case of sister concern of the assessee i.e. Escorts Heart & Super Specialty Hospital Ltd. decided in Appeal No. 26/JPR/2010-11 dated 18.10.2011 similar issue has been decided in favour of the assessee following the decision of Hon'ble Delhi High Court and also taking into consideration the decision in case of DR. Shanti Sarup Jain v. First ITO [1987] 21 ITD 494 (Bom.) and in case of Apollo Hospitals International Ltd. (supra) and findings of Ld. CIT (A) have been recorded in para 3.3 at pages 6 to 9 which reads as under :- "3.3. I have carefully considered all the dimensions of the issue under consideration. The basic controversy in the present issue is about that nature of the relationship in between the appellant and the doctors employee on retainership basis and weather the TDS provision of Sec. 192 or 194J would apply on the payment made to them, as such. The brief facts of the issue are that the appellant, a super specialty hospital, apart from having certain doctors as regular employees, also has obtained services of others doctors in tw....
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....ntractual parties and the same can not be termed akin to an employer and employee relationship, under the given circumstances. iii. The third issue raised by the AO, in his support, is that the retainer doctor is bound by the general instructions/regulations of the company and also with the secrecy clause etc.. Here also, I am agreed with the submission of the Ld. AR that the considering the nature and technicalities of the super specialty medical services like of the appellant, these types of restrictions, rules and regulations would always be necessary and essential in all sort of employment/consultancy arrangement, to ensure the proper functioning of such origination and also ensure the quality of medical services of the appellant. Accordingly, having such clause in the contract for the retainer doctor, does not convert from the status of the consultant them into a regular employee of the appellant, as such. The last point raised by the AO, in this regard, is that they are paid fixed monthly salary like the regular employee of the assessee. In this regard, I find force in the Ld, AR's argument that had they been engaged as regular employee, then they would have also entit....
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....by Fortis Health World Limited (FHWL) on sale of medicines to the assessee is commission chargeable to tax under section 194H of the Act by treating FHWL as a Agent of the assessee. 18. The Assessing Officer by making following observations held that assessee has committed default in terms of section 201(1)/201(1A) of the Act :- "The contention of the assessee has been considered and not found acceptable. In this case, FHWL is providing medicines to the assessee and the pre-fixed margin amount is the commission being paid to FHWL for providing specific medicines to IPD. The medicines are specifically meant for the in-patients and not open to sale for the patients as is the case in OPD. Whatever medicines are required by the assessee are being provided for fixed margin by FHWL and hence FHWL is an agent of the assessee. Hence, the amount paid to FHWL is commission paid to it on which 'TDS is deductible u/s 194H of the IT. Act." 19. The Ld. CIT (Appeals) confirmed the findings of the Assessing Officer by observing as under :- "I have considered the facts of the case and submissions of Ld. A.R. On perusal of the relevant details / documents. I am in full agreement with....
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....t all Escorts had to purchase the medicines even from another institution, could he have supplied the medicines free of any loading. It is to further submit that the ld, C1T (A) for the AY 2009-10 in the case of same assessee has deleted the demand on the same issue by holding as under: " - that the transactions entered with M/s FHWL amounts to normal merchandise of medicines for their in-house consumption and it does not have any element of relationship of principal and agent as assumed by the AO. Accordingly, the provisions of TDS u/s 194H are not applicable i.r.o the transaction under consideration. In light of the above, the addition u/s 201(1 A) is hereby deleted." Humble appellant prays for grant of relief by deleting the additions sustained by the ld. CIT (A) and also grant the benefit of consequential Interest on account of relief given in the Order and as per the prevailing law in force.' 21. After considering the submissions and perusing the material on record, I find that here also assessee deserves to succeed. The assessee is purchasing medicines from FHWL on certain terms and conditions, rates are reduced but the fact remains that FHWL is issuing bills ....
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....of the above facts and circumstances I am agreed with the contention of the Ld. AR that the transaction entered with M/s. FHWL amounts to normal merchandise of medicines for their in-house consumption and it does not have any element of relationship of principle and agent, as assumed by the AO, Accordingly the provisions of TDS Sec. 194H are not applicable i.r.o. the transaction under consideration. In the light of the above, the Rs. 10127/- u/s. 201(1A) is hereby deleted. Consequently this ground of appeal is upheld." Against these findings, the department has not preferred any appeal before the Tribunal. It means the order of Ld. C1T (A) in subsequent year has been accepted by the department. Findings of Ld. CIT (A), in my considered view in this case for subsequent year are correct and on the reasoning given by Ld. CIT (A) for subsequent year, I set aside the order of Ld. CIT (A) for the current year and allow the issue in favour of the assessee by holding that provisions of section 194H are not applicable. 22. Now I will take Lie appeal of the department for assessment year 2008-09 mentioned in ITANo.326/JP/2011. 23. The department is objecting in holding that assessee....
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.... doctors at fixed monthly remuneration is covered under section 194J and not under section 192 of the IT Act. 28. This issue was also involved in case of other assessee M/s. Escorts Heart & Research Centre Ltd. in ITA No. 363/JP/2011. I have already disposed off the ground taken by that assessee hospital. The decision of present Ld. CIT (A) has been taken into consideration and I Find that the decision of Ld. CIT (A) is correct which is after appreciating all the facts in right perspective and after taking into consideration the decision of Hon'ble Delhi High Court as well as the decision of Mumbai Bench of the Tribunal. Therefore, on the same reasoning given by me already in case of other assessee, 1 confirm the order of Ld. CIT (A) in the present case on this issue. 29. Ground No. 2 is against in holding that the payments made to Fortis Health World Ltd. is in fact correct and covered under section 19AC and not under section 194H. 30. This very issue was also involved in case of another assessee i.e. Escorts Heart Institute &. Research Centre Ltd. In that case, the Ld. CIT (A) has confirmed the action of the Assessing Officer. However, I have reversed the order of Ld....
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....by discussion with him, I am respectfully of the view that the questions as proposed by him do not bring out the points of difference for reference to the Third Member for his opinion by the Hon'ble President: 1.1 Whether the payments to the blood banks for carrying out investigation procedures, are, in the facts and circumstances of the case, made by the assessee-hospital or by its patients? 1.2 Whether, while deciding an issue under appeal, the tribunal required to apply its independent mind thereon, without being influenced by the decision by the first appellate authority for a subsequent year, particularly when the same was not pressed during hearing and, accordingly, the parties not heard thereon. 2. I am in agreement with the Question No. 2 as proposed by my ld. brother, JM. 3.1 Whether, can, on the admitted set of facts brought on record by the parties, the inferential finding/s by the Appellate Tribunal differ from that of cither party before it, or is it to necessarily match therewith? Further, is not the tribunal duly bound to, in deciding an issue before it, apply the law as applicable to the facts found by it, including such inferential finding/s? 3.2....
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....he parties not heard thereon? 2. I am in agreement with the Question No. 2 as proposed by my ld. brother, JM. 3.1 Whether, can, on the admitted set of facts brought on record by the parties, the inferential finding/s by the Appellate Tribunal differ from that of either party before it, or is it necessarily match therewith? Further, is not the tribunal duty bound to, in deciding an issue before it, apply the law as applicable to the facts found by it, including such inferential finding/s? 3.2 Whether, in the facts and circumstances of the case, the supply of medicines by Fortis Health World Ltd. (FHWL) to the assessee-company for its IPD Pharmacy, constitutes an independent business being carried on by FHWL, or is the said supply only the result of the work carried out by its relevant manpower, whose services stand already contracted to the assessee-company and subject to tax deduction u/s. 194C of the Act?" 4. I have heard both the parties first with regard to the questions which are to be answered by the Third Member. Section 255(4) of the Income-tax Act, 1961 reads as under:- "255. (4) if the members of a Bench differ in opinion on any point, the point shall be dec....
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....yment to blood bank does not arise. That the Assessing Officer has himself verified these facts from the blood bank and the blood bank has clarified that they have collected the processing charges from the patients directly and not from the assessee. He, therefore, submitted that the learned JM was fully justified in holding that no TDS is required to be made from the alleged payment to the blood bank. 7. Learned DR, on the other hand, relied upon the order of the learned AM and he stated that before the Assessing Officer, the assessee admitted that the payment was made by the assessee to the blood bank. The assessee changed the stand before the learned CIT(A). He further submitted that payment to blood bank was made for processing charges. The payment was made by the patients on behalf of the assessee hospital. That in the assessee's books of account also the payment made to blood bank has been shown. He, therefore, submitted that the order of learned AM should be sustained. 8. In the rejoinder, it is stated by the learned counsel that the assessee's staff who prepared the reply before the Assessing Officer was not aware about the correct facts, therefore, some factu....
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.... Bhawani Singh Marg, Jaipur - 302 015 Receipt for payment for investigation procedures SI. No. 159 Date 17/8/07 O.P.D./Outside No.00001506 Name: Tulsi Ram Age 56 Y. Sex M. Consultant: Fortis Escorts Hospital Investigation/Procedure Charges LTPRC 615 x 4 = 2460/- UHID - 1506 Finance Dept IPID - 234 Cash Paid Dated : 5/9/07 Amount: 15,938/- Total 2,460/- Sd/- Cashier" 11. That during assessment proceedings, the Assessing Officer called for the information from Santokba Durlabhji Memorial Hospital, i.e., the blood bank and hereinafter will be referred to as blood bank, under Section 133(6). The blood bank was asked to submit the following details:- "1. I am enclosing copies of bills raised by you in the case of patient Shri Tulsi Ram. You are requested to explain the nature and purpose of raising this bill. 2. Kindly give a detailed note on investigation procedures involved/service....
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....e includes everything including the stay charges, food, doctor's fee, operation charges, medicines, pathological test etc. However, since the assessee was not having the facility of blood bank, 'A' was required to take certain services from the blood bank for which 'A' was required to make the payment of Rs. 1,000/- to the blood bank. The assessee refunded the same to 'A' now, in substance, the fee received by the hospital was only Rs. 99,000/- as fee from the patient 'A' and debited Rs. 1,000/- as blood processing charges, it cannot be said that the assessee made the payment of blood processing charges. In substance, the payment of Rs. 1,000/-is made by the patient 'A' to the blood bank and Rs. 99,000/- to the assessee. 14. In view of the above, I am of the opinion that when the assessee did not make any payment to the blood bank, the question of affixing the liability under section 194J upon the assessee does not arise. Therefore, I agree with the learned Judicial Member with regard to question No. 1. 15. The second point of difference which is agreed by both the Member reads as under:- "2 Whether in the facts and circumstances....
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....phen's Hospital -6 SOT 60. He, therefore, submitted that the order of learned AM should be sustained. 19. I have carefully considered the arguments of both the sides and perused the material placed before me. The limited controversy posed by question No.2 is whether the payment made to the retainer doctors is professional charges liable for deduction of tax under Section 194J or income from salary from which tax is liable to be deducted at source under Section 192. Therefore, it has to be examined whether the relationship between the assessee and the retainer doctors is the employer employee relationship. To ascertain the above fact, it would be essential to refer to the retainership agreement. The assessee has given the sample copy of retainership agreement with few doctors. For ready reference, I shall reproduce herein below the agreement with Dr. Anshu S.S. Kotia :- "May 7, 2007 Dr. Anshu S.S. Kotia E-41 Siddharth Nagar, Scctor-13, Malviya Nagar, Jaipur-302017 Rajasthan, Dear Anshu, Sub: Services on Retainership basis As discussed and mutually agreed, we are pleased to engage your services as Consultant - Anaesthesia for our Escorts Heart Ins....
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....ional fee, failing which the professional fee would not be processed. 12. If at any time, your conduct is considered by the company as detrimental to its interest, or in violation of one or more terms of this agreement or the regulations and policies of the company, or you neglect or fall or refuse to carry out the duties assigned to you hereunder, the company may terminate this agreement without notice and without any payment in lieu of notice. 13. You shall upon completion or termination of the engagement hereunder, immediately deliver up to company all correspondence, documents, paper and property belonging to the company which may be in your possession or under your control. 14. The Jaipur courts will have exclusive Jurisdiction for any issue or dispute arising out of or in connection with this arrangement. You are requested to return the duplicate copy of this letter in confirmation of your acceptance of the above terms and conditions. Looking forward to a mutually beneficial association. Yours faithfully For Escorts Heavrt Institute & Research Centre Ltd." 20. From the above agreement, it is evident that the agreement is for a limited period. The retai....
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....iability shall attain in favour of the consultant as against any officer, director, member, agent or employee of the Company, but that he will instead look solely on the assets of the Company for satisfaction of any debts arising out of this Agreement. Consultant agrees to indemnify and hold harmless company and its officers, directors, employees, agents, parents, subsidiaries and affiliates from and against any and all liabilities, penalties, demands and damages, including attorney's fees and costs of defense, which it may suffer incur, arising out of or in connection with this Agreement of the performance of services hereunder." [Emphasis supplied] 8. It is clear on a reading of Clause 11 of the Agreement that there is no employer-employee relationship between the parties. Moreover, it is unlikely that in any corporation, an employee would indemnify his employer and other employees against all liabilities, as provided for in Clause 11 of the Agreement. 9. Both the appellate authorities have looked at the Agreements and examined them in detail and have come to the conclusion that there is no employer-employee relationship between the parties and, therefore, the provision....
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....iences (PJ Ltd. would not be applicable. 25. In the case of Apollo Hospitals International Ltd. (supra), it is pointed out by the ITAT that in the case of employer doctor, general service rules and regulations were made applicable but not in the case of consultant doctors. That in the case under appeal before us, in the case of retainer doctors also, the rules, regulations and policies of the company have been made applicable. In the case of Apollo Hospitals International Ltd. (supra), the consultant doctors were free to take up any other job while in the case under consideration before me, there is prohibition for the retainer doctors to take up assignment with any other company. In the case of Apollo Hospitals International Ltd. (supra), the consultant doctors were entitled to share the fees between the hospital and themselves and fixed remuneration per month mentioned was only the minimum guarantee money which they were supposed to get from the Apollo Hospital. The consultant doctors were required to take professional indemnity insurance on their own. Thus, the facts in the above mentioned case were altogether different than the facts in the present appeals under consideratio....
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....EHIRCL 2.4 EHIRCL shall make all the payments due under this clause to FHWL by the 10th day of the following English calendar month for which the payment is due. In case of any delay in the payment of the amounts payable to FHWL by EHIRCL FHWL is entitled to charge penal interest @ 1.5% (one and half percent) per month for the actual period of delay. 2.5 The sale of the products at the IPD Pharmacy shall be made under the supervision of the Registered Pharmacist and the amounts for the same shall be collected by the Store Manager/incharge appointed by the FHWL All the amounts so collected for the sale of the products shall be deposited with the EHIRCL nominated personnel the next day along with a daily report on safes and sale returns. 2.6 All the expenses incurred by the FHWL on the employees and the smooth operation of the IPD Pharmacy shall be reimbursed by the EHIRCL to FHWL on monthly basis. 2.7 EHIRCL shall also spend the necessary amounts and investments in the infrastructure for the IPD Pharmacy and the same shall be shared between the FHWL and EHIRCL on equal basis. 2.8 The Parties agree to provide each other such reports as are mutually agreed upon or as ei....
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....out a new case and even if a view is taken that the Tribunal has such power, at least the assessee should have been confronted with the same and should have been given an opportunity to explain why Section 194C is not applicable. Learned DR also fairly stated that as per Revenue, Section 194H is applicable on the markup charged by FHWL on the sale of medicines to the assessee. Learned DR, however, stated that, at present, he had no option but to support the order of the learned AM because he is conscious of the fact that the Third Member has to agree with one of the conflicting views, then only, there can be majority view. The learned JM's order is against the Revenue and the learned AM's order is partly in favour of the Revenue, therefore, he supported the order of the learned AM through the stand of the Revenue is still that, on such payment, Section 194H is applicable and not Section 194C. 32. After considering the arguments of both the sides and going through the agreement, I find that the agreement has to aspects - one is with regard to sale of the medicines by FHWL to the assessee. As per the agreement, FHWL is to sell the medicines at cost plus certain markup whic....
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.... the facts and circumstances of the case, the provisions of section 194J are applicable on the payments made to blood bank? 2. Whether in the facts and circumstances of the case, the provisions of section 192 or section 194J are applicable in case of retainer doctors? 3. Whether in the facts and circumstances of the case, on the markup/profits earned by Fortis Health World Ltd. (FHWL) on sale of medicines to the assessee is a commission chargeable to tax under section 194H or is a sale on which provisions of section 194H are not applicable? 4. Whether in the facts and circumstances of the case, on the mark up/profits the provisions of section 194C can be invoked by the Tribunal where neither this is a case of department nor of the assessee?" 2. The Ld. A.M. proposed the following separate questions: "1.1 Whether the payments to the blood banks for carrying out investigation procedures, are, in the facts and circumstances of the case, made by the assessee-hospital or by its patients? 1.2 Whether, while deciding an issue under appeal, the tribunal required to apply its independent mind thereon, without being influenced by the decision by the first appellate authorit....