Law:

Section:

Section 28(i) of the Income-tax Act, 1961 - Business income - Chargeable as - Assessment years 1983-84 to 1985-86 - Assessee was a reader in Orthopaedic Department in Government Medical College - Assessing Officer while determining professional income of assessee included in his income, income derived by assessee's father from nursing home, on ground that assessee's father was professionally unqualified for running such nursing home - Whether it is not essential that persons who are proprietor of nursing home should also be doctors - Held, yes - Whether since it was admitted that father had employed doctors who were looking after patients and doing necessary surgery, finding of Assessing Officer could not be supported under law - Held, yes FACTS The assessee in the relevant assessment years was a reader in the Government Medical College and he was also carrying on his practice as Orthopaedic Surgeon. The Assessing Officer proceeded to estimate the professional income of the assessee consequent to the search made by him and held that the income earned from the nursing home which was shown in the hands of the assessee's father, the income from physiotherapy centre shown in the hands of the assessee's wife, and the income from X-ray machine shown as belonging to the assessee's son, were includible in the hands of the assessee. He took the view that none of those persons had any professional or technical qualification for running the various activities and they could not have any income of their own. On appeal, the Commissioner (Appeals) deleted inclusion of income of the father, wife, and son in the hands of the assessee. On appeal by the department, the Tribunal allowed the appeal and upheld the order passed by the Assessing Officer. The assessee filed application for making reference to the High Court. On reference : HELD It is not essential that the persons who are proprietor of the nursing home should also be doctors. It was admitted that the father had employed doctors who were looking after the patients and doing necessary surgeries. The finding which was based on that finding was legally erroneous. The finding was based on partly relevant and partly on…

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