|Radiology & pathological laboratory run by a physician (M.D./ M.B.B.S. not specialized in radiology or Bio-chemistry) will be considered as profession or business for limits of tax audit?
|S. 2(13) of the Income-tax Act, 1961 defines ‘business’ which includes any trade, commerce or manufacture or any adventure or concern in the nature of trade, commerce or manufacture. The word ‘business’ is one of wide import and it means activity carried on continuously and systematically by a person by the application of his labour or skill with a view to earning an income. While S. 2(36) of the Act defines ‘profession’ to include vocation. The Supreme Court in CIT vs. Manmohan Das (deceased) [59 ITR 699] has held that, the expression ‘profession’ involves the idea of an occupation requiring purely intellectual skill or manual skill controlled by the intellectual skill of the operator, as distinguished from an operation which is substantially the production or sale or arrangement for the production or sale of the commodities.
So, from the facts of the case it is clear that radiology and pathology operated by a doctor who is not specialized would be a business. This view is supported by the Guidance Note on Tax Audit u/s. 44AB of the Income-tax Act, 1961, issued by the Institute of Chartered Accountants of India.
|CA. H. N. Motiwalla
|2(13), 2(36), 44AB
Opinion Of Eminent Legal Luminaries On Controversial Issues
Whether Radiology And Pathology Operated By Doctor Is Business Or Profession?
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