Biswas Medical Centre, Kolkata V. D.C.I.T Cir - 55,kolkata, Kolkata

ITA 1404/KOL/2013

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 4962 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 9 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-03-2016
• Appeal Filed By: Assessee
• Bench Allotted: B
• Assessment Year: 2008-2009
• Appeal Filed On: 21-05-2013
• Court: TRIBUNAL
• Department Lawyers: DEBASISH ROY
• Assessee Lawyers: S K ROY; MANOJ DUTTA
• Keywords: Salary income
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH: KOL KATA [BEFORE SHRI MAHAVIR SINGH, JM & SHRI WASEEM AHMED , AM] I.T.A NO.1404/KOL/2013 ASSESSMENT YEAR: 2008-09 BISWAS MEDICAL CENTRE VS. DEPUTY COMMISSIONER O F INCOME-TAX, (PAN:AAEFB6571F) CIRCLE-55, KOLKATA. ( APPELLANT ) ( RESPONDENT ) DATE OF HEARING: 18.02.2016 DATE OF PRONOUNCEMENT: 02.03.2016 FOR THE APPELLANT: SHRI MANOJ DUTTA, FCA & SRI S. K. ROY, ADVOCATE FOR THE RESPONDENT: SHRI DEBASISH ROY, JCIT, SR. DR ORDER PER SHRI MAHAVIR SINGH, JM: THIS APPEAL BY ASSESSEE IS ARISING OUT OF ORDER OF CIT(A)-XXXVI, KOLKATA VIDE APPEAL NO. 266/CIT(A)-XXXV1/KOL/CIR-55/10-11 DATED 17.04.2 013. ASSESSMENT WAS FRAMED BY DCIT, CIRCLE-55, KOLKATA U/S. 143(3) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) FOR ASSESSMENT YEAR 2008-09 VIDE HIS ORD ER DATED 27.12.2010. 2. THE ONLY ISSUE IN THIS APPEAL OF ASSESSEE IS AG AINST THE ORDER OF CIT(A) CONFIRMING THE ACTION OF AO IN DISALLOWING THE SALARY PAID TO DR. S. K. KARMAKAR AMOUNTING TO RS.1.80 LACS WITHOUT DEDUCTION OF TDS U/S. 194J OF THE ACT THERE BY INVOKING THE PROVISIONS OF SECTION 40(A)(IA) OF THE ACT TREATING THE RECEIPT AS PROFES SIONAL CHARGES. 3. WE HAVE HEARD RIVAL SUBMISSIONS AND GONE THROUG H FACTS AND CIRCUMSTANCES OF THE CASE. BRIEFLY STATED FACTS ARE THAT THE ASSESSEE IS A SPE CIALIZED EYE HOSPITAL RUNNING UNDER THE NAME OF SILVERLINE EYE HOSPITAL. DURING THE RELEVANT FY 20 07-08 THE ASSESSEE PAID A SUM OF RS.1.80 LACS TO DR. S. K. KARMAKAR AND CLAIMED THE SAME AS DEDUC TION IN P&L ACCOUNT AS SALARY. THE AO DURING THE COURSE OF ASSESSMENT PROCEEDINGS NOTICED THIS PAYMENT AND ACCORDING TO HIM, DR. S. K. KARMAKAR IS GIVING PROFESSIONAL SERVICES TO THE ASSESSEE AND ACCORDINGLY, THIS PAYMENT IS A PROFESSIONAL CHARGE. ACCORDING TO AO, THE ASSESSEE HAS PAID A SUM OF RS.1.80 LACS ON THIS ACCOUNT AND NOT DEDUCTED ANY TDS IN VIOLATION OF PR OVISION OF SECTION 194J OF THE ACT. THEREFORE, THE AO MADE DISALLOWANCE OF THIS PAYMENT BY INVOKING THE PROVISIONS OF SECTION 40(A)(IA) OF THE ACT. AGGRIEVED, ASSESSEE PREFERRE D APPEAL BEFORE CIT(A), WHO ALSO CONFIRMED THE ACTION OF AO. AGGRIEVED, THE ASSESSEE IS NOW I N SECOND APPEAL BEFORE US. 4. BEFORE US, LD. COUNSEL FOR THE ASSESSEE PRODUCED FORM NO. 16 ISSUED BY ASSESSEE TO DR. S. K. KARMAKAR AND ALSO QUERY OF THE AO WAS ANSWERED V IDE LETTER DATED 15.11.2010 THAT THE 2 ITA NO.1404/KOL/2013 BISWAS MEDICAL CENTRE, AY 2008-09 PAYMENT OF RS.1.80 LAC TO DR. S. K. KARMAKAR IS IN THE NATURE OF SALARY AND FOR THIS ASSESSEE HAS DEDUCTED PROFESSIONAL TAX AND PAID TO THE TREASURY. THE RELEVANT REPLY IN ASSESSEES PAPER BOOK PAGE 1 READS AS UNDER: (1) AS TO YOUR QUERY WHY TDS NOT MADE ON PROFESSI ONAL SERVICES ETC., WE WOULD LIKE TO STATE THAT IN FACT THE SAME REPRESENT AMOUNT PAID TO PART TIME ST AFF NOT TO BE TREATED AS FULL TIME AND NOT BEING ELIGIBLE OTHERWISE FOR ESI & PF BENEFITS. IT IS TO BE MENTIONED THAT ON THE PART TIME SALARY SO PAID, PROFESSIONAL TAX HAS BEEN DULY DEDUCTED AS FOLLOWS: PERIOD FROM TO AMOUNT DEPOSITED ON 03-2007 04-2007 1.825 5/5/2007 05-2007 03-2008 7.375 8/4/2008 YOU WOULD NOW BE CONVINCED THAT PROFESSION TAX IS D EDUCTED ON SALARY ONLY AND NOT ON PROFESSIONAL FEES. LD. COUNSEL FOR THE ASSESSEE ALSO DREW OUR ATTENTIO N TO PAGE 4 OF ASSESSEES PAPER BOOK WHEREIN COMPLETE DETAILS IN RESPECT TO DEDUCTION OF PROFESS IONAL TAX ARE AVAILABLE. LD. COUNSEL FOR THE ASSESSEE ALSO STATED THAT DR. S. K. KARMAKAR HAS AL SO TREATED THIS PAYMENT AS SALARY AND INCLUDED THE SAME IN HIS RETURN OF INCOME AS A SALARY INCOME . LD. COUNSEL FOR THE ASSESSEE IN VIEW OF THE ABOVE, STATED THAT ONCE THIS IS A SALARY PAID TO A DOCTOR WHO WAS A PART TIME EMPLOYEE, THERE IS NO REQUIREMENT OF DEDUCTION OF TDS U/S. 194J OF THE AC T AND HENCE, NO DISALLOWANCE CAN BE MADE BY INVOKING THE PROVISIONS OF SECTION 40(A)(IA) OF THE ACT. 5. AFTER HEARING THE RIVAL SUBMISSIONS, GOING THROU GH FACTS AND CIRCUMSTANCES OF THE CASE AND THE ARGUMENT OF LD. COUNSEL, WE ARE CONVINCED I N VIEW OF THE EVIDENCE PRODUCED BEFORE US VIZ. (I) FORM NO. 16 APPLICABLE TO SALARIED EMPLOY EES U/S. 192 OF THE ACT, (II) APPOINTMENT LETTER OF DR. S. K. KARMAKAR, (III) DETAILS OF PROFESSIONA L TAX DEDUCTED AND (IV) PAYMENT MADE I.E. THIS IS A PAYMENT ON ACCOUNT OF SALARY AND NOT PROFESSIO NAL CHARGES. ACCORDINGLY, THE DISALLOWANCE MADE BY AO AND CONFIRMED BY CIT(A) IS HEREBY DELETE D. THIS ISSUE OF ASSESSEES APPEAL IS ALLOWED. 6. IN THE RESULT, APPEAL OF ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 02.03.2016. SD/- SD/- (WASEEM AHMED) (MAHAVIR SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 2 ND MARCH, 2016 JD. SR. P.S 3 ITA NO.1404/KOL/2013 BISWAS MEDICAL CENTRE, AY 2008-09 COPY OF THE ORDER FORWARDED TO: 1. APPELLANT BISWAS MEDICAL CENTRE, 396, PRINCE ANWA R SHAH ROAD, KOLKATA-700045. 2. RESPONDENT DCIT, CIRCLE-55, KOLKATA. 3. CIT(A) , KOLKATA 4. CIT , KOLKATA 5. DR, KOLKATA BENCHES, KOLKATA / TRUE COPY, BY ORDER, ASSTT. REGISTRAR .