PER N.R.S.GANESAN, JUDICIAL MEMBER All the three appeals of the assessee are directed against the respective orders of the Commissioner of Income-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 this 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 Practitioner. The assessee is also one of the partner in M/s G. Arjundas and Deepak Arjundas. The partnership firm is practicing in medicine. As a partner, the assessee has also rendered service in M/s Apollo Hospital, Chennai and received fees for the services rendered. During the 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 received ` 84,475/-. Since the assessee is a partner in the firm which is practicing in medicine, the assessee cannot do any practice independently as a competitor to the partnership firm. Therefore, whatever fees received by the assessee for the services rendered either in Apollo Hospital or otherwise has to be necessarily treated as income of 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 cannot practice independently so long as the assessee is a partner in the partnership firm. According to the ld. Representative, the entire receipt is accounted in the partnership firm hence, the Assessing Officer is not justified in adding the receipt from Apollo Hospital as income of the assessee. ITA Nos. 289, 290 & 291/16 :- 3 -:
3. On the contrary, Shri A.V Sreekanth, ld. Departmental Representative submitted that admittedly, the assessee is a Medical Practitioner and rendered services in Apollo Hospital and received income. The services rendered by the assessee in Apollo Hospital is in his individual capacity, therefore, whatever fees received for the services rendered in Apollo Hospital has to be necessarily 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 the Assessing Officer.
4. We have considered the rival submissions on either side and also perused the material available on record. Admittedly, the assessee received fees from Apollo Hospital for the services rendered. It is not in dispute that the assessee is a partner in a firm which is practicing in medicine. As rightly submitted by the ld. Representative for the assessee, so long as the assessee continues as partner in the partnership firm, he cannot set up an independent practice against the object of the firm. In this case, the assessee is still continuing as partner, therefore, whatever services rendered by the assessee in Apollo Hospital has to be construed as services rendered by the partnership firm. The fees received from Apollo Hospital 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 already 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 treated as independent income, therefore, both the authorities below are not justified in adding the fees received from Apollo Hospital in the hands of the assessee. In view of the above, the orders of the lower authorities are set aside and the entire addition made by the Assessing Officer is deleted.
5. In the result, all the appeals of the assessee are allowed. Order pronounced in the open court on 5th August, 2016, at Chennai. Sd/- Sd/- (. ) (A. MOHAN ALANKAMONY) /ACCOUNTANT MEMBER (... )) (N.R.S. GANESAN) /JUDICIAL MEMBER $/Chennai %/Dated: 5th August, 2016 () *)/Copy to:
1. /Appellant 4. +/CIT
2. /Respondent 5. ) ./DR
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