The assessee had entered into agreement with various hospitals for extending medical facilities to policyholders of various companies with whom the assessee has entered into agreements to act as an agent. The assessee made payments on behalf of the insurance company from the float funds available with the assessee, which were provided by the insurance company. The assessee did not deduct tax at source on the payments made to the hospital. The Assessing Officer treated the assessee as in default under section 201(1) and computed interest under section 201(1A). The Tribunal by an order, inter alia, held that the assessee had made payment to the hospitals towards bed charges, medicines, follow up services, out patient services, etc., which did not fall within the scope of fees for professional services and therefore, directed the Assessing Officer to bifurcate the payments made by the assessee to the hospital into various heads and to confine the demand raised under section 201(1A) of the Act to the payments, which were in the nature of fee for professional services. On appeal the Court held that the assessee was liable to deduct tax at source on payments made to hospitals. (AY. 2007-08)