Dr. Deepak Arjundas, CHENNAI V. ACIT, CHENNAI

ITA 290/CHNY/2016

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 8786 (ITAT-CHENNAI)
• Duration Of Justice: 5 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-08-2016
• Appeal Filed By: Assessee
• Bench Allotted: C
• Next Hearing Date: 20-06-2016
• Assessment Year: 2005-2006
• Appeal Filed On: 12-02-2016
• Court: TRIBUNAL
• Department Lawyers: A V SREEKANTH
• Assessee Lawyers: G NARAYANASWASMY

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH : CHENNAI . . . , . ! , ' # $ [ BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER ] ./ I.T.A.NOS. 289, 290 & 291/MDS/2016 / ASSESSMENT YEARS : 2004-05, 2005-06 AND 2006-0 7 DR. DEEPAK ARJUNDAS 228-A KILPAUK GARDEN ROAD CHENNAI 600 010 VS. THE ASSTT. COMMISSIONER OF INCOME-TAX NON-CORPORATE CIRCLE 10 CHENNAI [PAN AAFPD 1050 N ] ( %& / APPELLANT) ( '(%& /RESPONDENT) / APPELLANT BY : SHRI G. NARAYANASWASMY, CA /RESPONDENT BY : S HRI A.V SREEKANTH, JCIT / DATE OF HEARING : 20 - 06 - 2016 ! / DATE OF PRONOUNCEMENT : 05 - 08 - 2016 / O R D E R PER N.R.S.GANESAN, JUDICIAL MEMBER ALL THE THREE APPEALS OF THE ASSESSEE ARE DIRECT ED AGAINST THE RESPECTIVE ORDERS OF THE COMMISSIONER OF INCOM E-TAX (APPEALS)- 12, CHENNAI, FOR ASSESSMENT YEARS 2004-05, 2005-06 AND 2006-07. SINCE COMMON ISSUE ARISES FOR CONSIDERATION IN ALL THE APPEALS, WE HEARD THEM TOGETHER AND DISPOSING OF THE SAME BY T HIS COMMON ORDER. ITA NOS. 289, 290 & 291/16 :- 2 -: 2. SHRI G. NARAYANASWAMY, LD. REPRESENTATIVE FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEE IS A MEDICAL PRACTITIO NER. THE ASSESSEE IS ALSO ONE OF THE PARTNER IN M/S G. ARJUNDAS AND D EEPAK ARJUNDAS. THE PARTNERSHIP FIRM IS PRACTICING IN MEDICINE. AS A PARTNER, THE ASSESSEE HAS ALSO RENDERED SERVICE IN M/S APOLLO HO SPITAL, CHENNAI AND RECEIVED FEES FOR THE SERVICES RENDERED. DURING TH E ASSESSMENT YEAR 2004-05, THE ASSESSEE HAS RECEIVED ` 1,97,503/- AND FOR ASSESSMENT YEAR 2005-06, THE ASSESSEE HAS RECEIVED ` 1,57,318/-. SIMILARLY FOR THE ASSESSMENT YEAR 2006-07, THE ASSESSEE HAS RECE IVED ` 84,475/-. SINCE THE ASSESSEE IS A PARTNER IN THE FIRM WHICH IS PRACTICING IN MEDICINE, THE ASSESSEE CANNOT DO ANY PRACTICE INDE PENDENTLY AS A COMPETITOR TO THE PARTNERSHIP FIRM. THEREFORE, WH ATEVER FEES RECEIVED BY THE ASSESSEE FOR THE SERVICES RENDERED EITHER I N APOLLO HOSPITAL OR OTHERWISE HAS TO BE NECESSARILY TREATED AS INCOME O F THE PARTNERSHIP FIRM AND THE ASSESSEE IS ENTITLED TO THE SHARE OF PROFIT AS PER THE RATIO LAID DOWN IN THE PARTNERSHIP DEED. THE ASSESSEE C ANNOT PRACTICE INDEPENDENTLY SO LONG AS THE ASSESSEE IS A PARTNER IN THE PARTNERSHIP FIRM. ACCORDING TO THE LD. REPRESENTATIVE, THE ENT IRE RECEIPT IS ACCOUNTED IN THE PARTNERSHIP FIRM HENCE, THE ASSESS ING OFFICER IS NOT JUSTIFIED IN ADDING THE RECEIPT FROM APOLLO HOSPITA L AS INCOME OF THE ASSESSEE. ITA NOS. 289, 290 & 291/16 :- 3 -: 3. ON THE CONTRARY, SHRI A.V SREEKANTH, LD. DEPARTMENT AL REPRESENTATIVE SUBMITTED THAT ADMITTEDLY, THE ASSE SSEE IS A MEDICAL PRACTITIONER AND RENDERED SERVICES IN APOLLO HOSPIT AL AND RECEIVED INCOME. THE SERVICES RENDERED BY THE ASSESSEE IN APOLLO HOSPITAL IS IN HIS INDIVIDUAL CAPACITY, THEREFORE, WHATEVER FEES R ECEIVED FOR THE SERVICES RENDERED IN APOLLO HOSPITAL HAS TO BE NECE SSARILY TREATED AS INCOME OF THE ASSESSEE IN HIS INDIVIDUAL CAPACITY AND HENCE, THE SAME HAS TO BE ASSESSED IN THE HANDS OF THE ASSESSEE. ACCORDING TO THE LD. DR, THE CIT(A) HAS RIGHTLY CONFIRMED THE ORDER OF T HE ASSESSING OFFICER. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITHER SIDE AND ALSO PERUSED THE MATERIAL AVAILABLE ON RECORD. AD MITTEDLY, THE ASSESSEE RECEIVED FEES FROM APOLLO HOSPITAL FOR THE SERVICES RENDERED. IT IS NOT IN DISPUTE THAT THE ASSESSEE IS A PARTNE R IN A FIRM WHICH IS PRACTICING IN MEDICINE. AS RIGHTLY SUBMITTED BY THE LD. REPRESENTATIVE FOR THE ASSESSEE, SO LONG AS THE ASSESSEE CONTINU ES AS PARTNER IN THE PARTNERSHIP FIRM, HE CANNOT SET UP AN INDEPENDENT P RACTICE AGAINST THE OBJECT OF THE FIRM. IN THIS CASE, THE ASSESSEE IS STILL CONTINUING AS PARTNER, THEREFORE, WHATEVER SERVICES RENDERED BY T HE ASSESSEE IN APOLLO HOSPITAL HAS TO BE CONSTRUED AS SERVICES REN DERED BY THE PARTNERSHIP FIRM. THE FEES RECEIVED FROM APOLLO HO SPITAL IS RECORDED IN THE BOOKS OF ACCOUNT OF THE PARTNERSHIP FIRM AND IT WAS TREATED AS ITA NOS. 289, 290 & 291/16 :- 4 -: INCOME OF THE PARTNERSHIP FIRM AND TAXES WERE ALREA DY PAID. THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT SO LONG AS THE ASSESSEE IS PARTNER IN M/S G. ARJUNDAS AND DEEPAK ARJUNDAS, THE INCOME RECEIVED BY THE ASSESSEE FROM APOLLO HOSPITAL CANNOT BE TRE ATED AS INDEPENDENT INCOME, THEREFORE, BOTH THE AUTHORITIES BELOW ARE NOT JUSTIFIED IN ADDING THE FEES RECEIVED FROM APOLLO H OSPITAL IN THE HANDS OF THE ASSESSEE. IN VIEW OF THE ABOVE, THE ORDERS OF THE LOWER AUTHORITIES ARE SET ASIDE AND THE ENTIRE ADDITION M ADE BY THE ASSESSING OFFICER IS DELETED. 5. IN THE RESULT, ALL THE APPEALS OF THE ASSESSEE A RE ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 5 TH AUGUST, 2016, AT CHENNAI. SD/- SD/- ( . ! ) (A. MOHAN ALANKAMONY) ' / ACCOUNTANT MEMBER ( . . . ' ) (N.R.S. GANESAN) / JUDICIAL MEMBER #$ / CHENNAI %& / DATED: 5 TH AUGUST, 2016 RD &' ()*) / COPY TO: 1 . / APPELLANT 4. + / CIT 2. / RESPONDENT 5. ),- . / DR 3. +/' / CIT(A) 6. -01 / GF