TaxTMI 
TaxTMI 
2016 (7) TMI 266
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....,450/-. The case was processed U/s 143(3) of the Income Tax Act, 1961 (in short the Act). The assessee is having income from salary, business and house property. The ld Assessing Officer observed that during the year under consideration, the assessee has derived income from working in coaching institute. Details of which are as under:- Name of Institution Period Amount of receipt Nature of receipt claimed Resonance, Kota 01/04/2008 to 31/3/2009 1800000/- Professional receipt Bansal Classes Pvt. Ltd. Kota 23/3/2009 to 31/3/2009 77420/- Salary During the year under consideration, the assessee worked in M/s Resonance, Kota and M/s Bansal Classes Pvt. Ltd., Kota, which are involved in providing coaching to the students for preparing the IIT exam. The assessee was engaged in following activities in above institute and from the institute, assessee was taking remuneration as professional receipts: (i) Notes preparation for students (ii) Checking of notebooks, test paper etc. (iii) Preparing test papers. (iv) Handling daily practice problem. The ld Assessing Officer gave reasonable opportunity of being heard on treatment given by the assessee as business and profe....
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....hich is not justified. He has drawn our attention on recent decision of Hon'ble Jaipur ITAT in the case of Shiv Pratap Raghuvanshi v/s ACIT in ITA No.551/JP/2013 dated 12.02.2016 A.Y. 2007-08 wherein identical issue has been decided in favour of the assessee as professional receipts vide order dated 12/12/2016. He further relied on the decision of Hon'ble Supreme Court in the case of Piyare Lal Adishwar Lal v/s CIT (1960) 40 ITR 0017 (SC) wherein it has been held that the relation between the employer and employee is to be governed by the nature of work there was due control and supervision by the employer. He further relied on the decision in the case of CIT v/s Manmohan Das (1966) 59 ITR 699 (SC) wherein it has been held that on a fair reading of the terms of the agreement it appears that the treasurer had to provide the staff for the cash section; he had power to suspend, transfer or dismiss any member of the staff or to appoint another person in his place. These duties are required intellectual or manual skill. The assessee is a professional degree B-Tech from IIT Guwahati and five years experience in advising, guiding and teaching various subjects relevant for preparation ....
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....itute for effective content delivery in classes; o) Grooming young teachers to be effective educators; p) Helping the institute in attracting new teaching talent as well as conducting interviews to identify and hire the best available teachers. The assessee was paid Rs. 18,00,000/- annually for the services to be rendered by him. The assessee is not entitled to statutory benefits like PF, ESI, Gratuity, Bonus or Leave Encashment etc. As per terms and conditions the assessee had the sole discretion to decide schedule of teaching hours. The assessee was discharging his duties as a consultant for the subject of Maths however, there is no restriction upon the appellant to give advice and consultancy services to other parties in respect of other subjects, which was not part of the agreement. Even the schedules of teaching hours had been decided by the assessee only. Question papers and answer sheets for tests conducted by Resonance are prepared by the assessee with the help of his own staff. The assessee accordingly paid Rs. 2,70,000/- to the various computer operators, employed by him for assisting him and preparing notes for students. However, there was no reimbursement made b....
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....decision of the Coordinate Bench in the case of Shiv Pratap Raghuvanshi v/s ACIT in ITA No.551/JP/2013 dated 12.02.2016 A.Y. 2007-08. The operative portion of the Coordinate Bench's order is reproduced as under:- "4.2. We have heard the rival submissions and perused the material on record. The consultancy agreement dated 1.4.2006 reveals that the appointment as Consultant is for a period of one year. It also mentioned that the relationship between the assessee and the Resonance would be governed by the terms and conditions of the contract. The consultancy fee, for providing the consultancy for Chemistry was agreed for a sum of Rs. 26 lacs excluding the service tax payable. The payment to the consultant was to be made monthly or quarterly on submission of appropriate bill/invoice. From the perusal of the agreement, it is clear that the assessee was not entitled to statutory benefit like PF, ESI, Gratuity, Bonus or Leave Encashment. We would like to mention that the assessee was also entitled to give advise and consultancy service to other parties, or organization or enterprises in respect of subject matter which are not part of the agreement i.e. to say that the agreement has restr....
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....uties of employee, the nature of business, terms of his employment/engagement and the kind of supervisory control over his work. Similarly, in the matter of CIT vs. Manmohan Das (1966) 59 ITR 699 (SC) while commenting on the profession, the Hon'ble Supreme Court has held that the provision requires purely intellectual or manual skill. In our opinion, a profession will imply any vocation carried on by an individual or group of individuals requiring the predominantly intellectual skills pursuing that vocation, requiring specialized advance education or expertise. It is an admitted case that the assessee is a professional having B-Tech degree and four years experience in advising, guiding and teaching various subjects relevant for preparation of entrance examination for engineering colleges. The conclusion drawn by AO that the agreement between the assessee and Resonance is a colorable device, in our view, is not correct and not supported by any investigation or reasoning brought on record. In our view, the assessee was given the freedom to take the classes and teach the subject within the parameter laid down by Resonance. The day to day supervision and control is missing. We observe ....
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....re particularly in the matter of Kamlesh Soni, 107 TTJ 836 wherein in the identical facts and circumstances, the relationship between the teacher and the Institute was held to be of consultant in nature. In the light of the above, we have no hesitation to hold that the relationship between the assessee and that of the Resonance was of employee and employer. We would like to add that even in the tax return filed by the Resonance, the TDS was deducted on account of professional income and not on account of salary. If the relationship between the assessee and the institute was of employee and employer, then the length of contract would not have been one year. Since the term of the contract was only one year that also goes in favour of the assessee to treat him as professional. In the light of the above, we hold that the assessee is a professional and was not an employee of Resonance. At this stage, we would like to refer that the AO relied upon the judgment passed by the Hon'ble Supreme Court in the matter of McDowell & Co. Ltd. vs. CIT, 22 Taxman 11 (SC) to say that tax planning may be legitimate provided it is within the frame work of law. In our view the judgment relied upon by the....