ACIT, CHENNAI V. M/s. Deloitte Haskins & Sells, CHENNAI

ITA 2077/CHNY/2016

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 8012 (ITAT-CHENNAI)
• Duration Of Justice: 4 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-11-2016
• Appeal Filed By: Department
• Bench Allotted: A
• Assessment Year: 2011-2012
• Appeal Filed On: 08-07-2016
• Court: TRIBUNAL
• Department Lawyers: B SAHEDEVAN
• Keywords: Diversion of income; Revenue expenditure
• Section: 37(1)

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH : CHENNAI . . . , . . ' #$ , % &' ( [ BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI D. S. SUNDER SINGH, ACCOUNTANT MEMBER ] ./ I.T.A.NO.2077/MDS/2016 / ASSESSMENT YEAR : 2011-12 THE ASSTT. COMMISSIONER OF INCOME-TAX NON-CORPORATE CIRCLE 1(1) [FORMERLY BUSINESS CIRCLE-I] CHENNAI VS. M/S DELOITTE HASKINS & SELLS ASV RAMANA TOWERS NO.52, VENKATNARAYANA ROAD T. NAGAR, CHENNAI 600 017 [ PAN AACFD 3771 D ] ( )* / APPELLANT) ( +,)* /RESPONDENT) ./ I.T.A.NO.2079/MDS/2016 / ASSESSMENT YEAR : 2011-12 M/S DELOITTE HASKINS & SELLS ASV RAMANA TOWERS NO.52, VENKATNARAYANA ROAD T. NAGAR, CHENNAI 600 017 VS. THE ASSTT. COMMISSIONER OF INCOME-TAX NON-CORPORATE CIRCLE 1(1) CHENNAI ( )* / APPELLANT) ( +, )* /RESPONDENT) DEPARTMENT BY : SHRI B. SAHEDEVAN, JCIT ASSESSEE BY : SHRI PERCY J. PARDIWALA, SR. COUNSEL SHRI NIRAJ SHETH, ASHESH SAFI & S.P.CHIDAMBARAM, ADVOCTES / DATE OF HEARING : 27 - 09 - 2016 / DATE OF PRONOUNCEMENT : 25 - 11 - 2016 ITA NO.2077 & 2079/16 :- 2 -: / O R D E R PER D.S. SUNDER SINGH, ACCOUNTANT MEMBER THESE CROSS APPEALS BY THE REVENUE AND THE ASSES SEE ARE DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS)-2, CHENNAI, DATED 4.3.2016 FOR ASSESSMENT YEAR 2011-12. 2. FIRST WE TAKE UP ASSESSEES APPEAL I.T.A.NO. 2079/MDS/2016. 3. GROUND NO. 1 AND 7 ARE GENERAL IN NATURE REQUIRING NO SPECIFIC ADJUDICATION. 4. GROUND NO.2.0 TO 2.6 ARE RELATED TO THE DISALLOWAN CE OF PENSION PAID TO THE RETIRED PARTNERS. 5. DURING THE ASSESSMENT PROCEEDINGS, THE ASSESSING OF FICER FOUND THAT A SUM OF ` 1,49,76,851/- WAS REDUCED FROM THE GROSS RECEIPTS WITH A NOTE THAT THE PAYMENT WAS MADE TOWA RDS THE RETIRED PARTNERS AS PENSION ON ACCOUNT OF OVERRIDING TITLE IN THE PARTNERSHIP DEED. THE ASSESSING OFFICER CALLED FOR THE DETAILS AND EXAMINED THE SAME AND HELD THAT THE PAYMENT IS AN APPLICATION O F INCOME AND BROUGHT TO TAX. THE ASSESSEE DURING THE ASSESSMENT PROCEEDINGS ALTERNATELY CLAIMED THAT THE PAYMENT MADE TO THE RE TIRED PARTNERS AS AN EXPENDITURE ALLOWABLE U/S 37(1) OF THE ACT. T HE ASSESSING OFFICER REJECTED THE ALTERNATE CLAIM OF THE ASSESSEE ALSO HOLDING THAT THE ITA NO.2077 & 2079/16 :- 3 -: PAYMENT MADE TO THE RETIRED PARTNERS IS NOT EXPENDI TURE TO CARRY ON THE BUSINESS BUT IT WAS A GRATUITOUS PAYMENT. 6. AGGRIEVED BY THE ORDER OF THE ASSESSING OFFICER, TH E ASSESSEE WENT ON APPEAL BEFORE THE CIT(A). THE LD. THE CIT(A) CONFIRMED THE ADDITION MADE BY THE ASSESSING OFFICE R BOTH ON DIVERSION OF INCOME BY OVERRIDING TITLE AS WELL AS THE REVENUE EXPENDITURE U/S 37(1) OF THE ACT. THEREFORE, THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 7. ON BEHALF OF THE ASSESSEE, SENIOR COUNSEL, SHRI PE RCY J. PARDIWALA APPEARED AND PRESENTED THE CASE. IN HIS ARGUMENT, THE SENIOR COUNSEL STATED THAT THE ASSESSEE IS A FIRM OF CHARTERED ACCOUNTANTS RENDERING AUDITING, TAX ADVISORY AND CO MPLIANCE AS WELL AS FINANCIAL ADVISORY SERVICES TO ITS CLIENTS. THE PA RTNERS OF THE FIRM PLAY PIVOTAL ROLE IN RENDERING PROFESSIONAL SERVICES. A S A PROFESSIONAL FIRM, THE METHOD OF ACCOUNTING ADOPTED BY THE FIRM IS CAS H METHOD OF ACCOUNTING. AS A MATTER OF PRACTICE, MEMO OF FEES IS RAISED ON THE CLIENT ON COMPLETION OF ENGAGEMENT. THE INCOME IN RESPECT OF PROFESSIONAL FEES GETS BOOKED ONLY ON RECEIPT OF PR OFESSIONAL FEES FROM THE CLIENT. SIMILARLY, AT ANY GIVEN POINT OF TIME, THERE ARE SEVERAL ONGOING PROFESSIONAL ENGAGEMENTS FOR WHICH PROFESSI ONAL TIME HAS BEEN SPENT AND EFFORTS ARE MADE. SUCH WORK IN PROG RESS IS NOT ITA NO.2077 & 2079/16 :- 4 -: REFLECTED IN THE ACCOUNTS BECAUSE OF THE CASH METHO D OF ACCOUNTING. IN VIEW OF THE ABOVE, THERE IS CONSIDERABLE AMOUNT OF INCOME EITHER UNBILLED OR BILLED BUT NOT RECEIVED AND WORK IN PRO GRESS TO BE RECEIVED FROM THE CLIENTS FOR WHICH COSTS ARE INCURRED, TIME IS DEVOTED AND EFFORTS ARE MADE DURING THE PERIOD WHEN RETIRING PA RTNER WAS ACTIVE IN THE FIRM. SUCH SUMS WILL BE REALIZED BY THE FIRM I N THE POST RETIREMENT PERIOD. THE ASSESSEE-FIRM CONTINUES ITS OPERATION S AFTER THE RETIREMENT OF A PARTNER WITH SAME NAME AND APPARATU S. THE ONGOING FIRM HAS THE BASE OF CLIENTS AND HUMAN AND PHYSICAL INFRASTRUCTURE BUILT OVER A PERIOD OF TIME INTER ALIA WITH EFFORTS MADE BY THE RETIRING PARTNER. 8. THE LD. SENIOR COUNSEL TAKEN US TO THE PARTNERSHIP DEED PLACED AT PAPER BOOK PAGES 20 TO 61 AND EXPLAINED T HAT AS PER CLAUSE 10(L), (M) AND (N)[ PAGES 47 TO 51 OF THE PAPER BOO K, THE PAYMENTS WERE MADE TO THE RETIRING PARTNERS. FOR READY REFE RENCE, WE REPRODUCE HEREUNDER THE RELEVANT CLAUSES OF THE PARTNERSHIP D EED. PAYMENT OF PROFITS FOR THE YEAR OF RETIREMENT OR DEATH L. IN RESPECT OF THE YEAR OF RETIREMENT OR DEATH OF A PARTNER, THE NET PROFITS OR LOSSES OF THE RIM SHALL BE WORKED OUT FOR THE FULL FINANCIAL YEAR AT THE END OF THE FINANCIAL YEAR IN WHICH THE RETIREMENT OR DEATH OCCURS. SUCH NET PROFITS OR LOSSES OF THE CURRENT YEAR SHALL BE APPORTIONED ON A TIME BASIS FROM THE COMMENCEMENT OF THE CURRENT YEAR TO THE DATE OF THE PARTNER'S R ETIREMENT OR DEATH AND THE PARTNER OR THE LEGAL HEIRS OR NOMINEES, AS THE CASE MAY BE, SHALL BE PAID THE SHARE OF SUCH APPORTIONED SUM BY THE CONTINUING OR SURVIVING PARTNERS AS ADJUSTED BY THE TAX LIABILITY OF SUCH ITA NO.2077 & 2079/16 :- 5 -: PARTNER WITH RESPECT TO HIS SHARE OF PROFITS OF THE FIRM FOR THE YEAR OF RETIREMENT OR DEATH, AS THE CASE MAY BE. IT IS CLARIFIED THAT THE PARTNER OR REGAL REPRESENTATIVES, AS THE CASE MAY BE, SHALL BE ENTITLED TO THE PROPORTIONATE MONTHLY REMUNERATION UNDER CLAUSE 9.A TO THE EXTENT NOT DRAWN BY THE PARTNER UP TO THE DATE OF RETIREMENT, OR DEATH AS THE-CASE MAY BE. RIGHT TO RECEIVE PAYMENTS ON RETIREMENT OR DEATH M. IN ADDITION TO THE AMOUNTS, IF ANY, PAYABLE, AS PROVIDED IN THE PRECEDING CLAUSES 10.K AND 10.1 ABOVE, A RETIRED/RETIRING PARTNER OF THE FIRM WHO BECAME A PARTNER IN THE FIRM OR PARTICIPATING FIRMS ON OR BEFORE 31 MARCH 2010 OR THE SPOUSE OR NOMINEE OF SUCH DECEASED PARTNER; OR A RETIRED/ RETIRING PARTNER OF THE LEGACY FIRM IN RESPECT OF WHICH THE LIABILITY THEREOF HAS BEEN TAKEN OVER BY THIS FIRM OR THE SPOUSE OR NOMINEE OF SUCH DECEASED PARTNER; AS THE CASE MAY BE, SHALL BE ENTITLED TO RECEIVE FURTHER SUMS DETERMINED ON THE BASIS SPECIFIED IN CLAUSE 10.N IN RESPECT OF THE FOLLOWING: I. AMOUNTS BILLS, BUT NOT RECEIVED, WORK COMPLETED, BUT NOT BILLED, AND WORK PARTLY COMPLETED AND NOT BILLED AS AT THE DATE OF DEATH OR RETIREMENT, AS THE CASE MAY BE, HAVING REGARD TO THE FACT THAT THE PARTNERSHIP FOLLOWS THE CASH SYSTEM OF ACCOUNTING. II. IN CONSIDERATION OF THE RETIRING PARTNER OR THE SPOUSE OR NOMINEE OF THE DECEASED PARTNER, AS THE CASE MAY BE , PERMITTING THE CONTINUING PARTNERS THE USE OF THE FIRM NAME OF DELOITTE HASKINS & SELLS., TO CARRY ON THE PROFESSION, ALONG WITH THE CLIENTELE AND THE ATTENDANT RIGHTS OF THE FIRM; . III. THE CONTRIBUTION MADE BY THE SURVIVING PARTNER OR THE DECEASED PARTNER AS THE CASE MAY BE, DURING HIS ASSOCIATION WITH THE FIRM, IN INCREASING THE FUTURE INCOME EARNING POTENTIAL OF THE FIRM, THE BENEFITS WHEREOF ARE LIKELY TO BE REFLECTED IN THE RECEIPTS OF THE FIRM FOR A REASONABLE NUMBER OF YEARS IMMEDIATELY FOLLOWING THE RETIREMENT OR DEATH OF THE PARTNER; AND/OR ITA NO.2077 & 2079/16 :- 6 -: DETERMINATION AND PAYMENT OF AMOUNTS UNDER CLAUSE 10.M IV. IN CONSIDERATION OF THE ASSUMING OF THE LIABILITY OF THE RETIRED PARTNERS OF THE LEGACY FIRMS CONSEQUENT TO THE ACQUISITION OF THE CLIENTELE AND EMPLOYEES TOGETHER WITH THE SUBSTANTIAL BUSINESS OF THE LEGACY FIRMS. IT IS CLARIFIED THAT A PERSON WHO BECOMES A PARTNER IN THE FIRM OR PARTICIPATING FIRMS ON OR AFTER 1 APRIL 2010 SHALL NOT BE ENTITLED TO ANY PAYMENTS UNDER THIS CLAUSE, AS COMPUTED UNDER CLAUSE 10.N. N. THE FURTHER SUM PAYABLE TO RETIRING PARTNERS OR THE SPOUSE OR NOMINEES OF DECEASED PARTNERS REFERRED TO IN THE CLAUE 10.M ABOVE SHALL BE DETERMINED IN ACCORDANCE WITH CLAUSE(I) TO CLAUSE (VII) BELOW AS MAY BE APPLICABLE. I. IN CASE OF PARTNERS WHO HAVE RETIRED FROM THE LEGACY FIRMS ON OR PRIOR TO 31 MARCH 2007 AS LISTED IN ANNEXURE III, THE PAYMENTS IN RESPECT OF CLAUSE 10.M WILL BE MADE, FOR THE BALANCE PERIOD OUT OF THE PERIOD OF TEN YEARS FROM THE DATE OF RETIREMENT, TO THE RETIRED PARTER. THE PAYMENTS WILL BE MADE ON A MONTHLY BASIS. II. IN TERMS OF CLAUSES 10.N.VI OF THE PARTNERSHIP DEED DATED 1 APRIL 2008, THE AMOUNT OF PENSION PAYABLE TO SHRI ANIL CHANDRA GUPTA IS AS PER ANNEXURE IV. III. FOR THE PARTNERS OTHER THAN THOSE LISTED IN CLAUSES (I) AND (II) ABOVE, ANY PARTNER RETIRING AFTER QUALIFYING PERIOD OF 20 YEARS WITH THE PARTICIPATING FIRM, SHALL BE ENTITLED TO RECEIVE PAYMENTS, AT THE RATE OF 25 PER CENT OF HIS AVERAGE ANNUAL AMOUNT RECEIVED IN THE PREVIOUS YEAR FROM ALL THE PARTICIPATING FIRMS FOR BEST THREE YEARS OUT OF THE LAST FIVE YEARS PRIOR TO RETIREMENT(EVEN IF IT IS RELATED TO THE PERIOD PRIOR TO 1 APRIL 2007) IN ABSOLUTE TERMS, FOR A PERIOD OF TEN YEARS FROM THE DATE OF RETIREMENT. IF THE PARTNER RETIRES IN BETWEEN THE END OF TWO ACCOUNTING YEARS THAN THE AVERAGE ANNUAL AMOUNT RECEIVED IN THE PREVIOUS YEAR SHALL BE COMPUTED WITH REFERENCE TO COMPLETED FINANCIAL YEARS BEFORE THE DATE OF RETIREMENT AS A PARTNER. THE ABSOLUTE AMOUNT REFERRED TO ABOVE WILL BE INDEXED ITA NO.2077 & 2079/16 :- 7 -: AS PER THE COST INFLATION INDEX SPECIFIED IN SECTION 48 OF THE INCOME TAX ACT, 1961 OR WILL BE INCREASED EVERY YEAR AT THE SIMPLE RATE OF 5% PER ANNUM, WHICHEVER IS HIGHER. THE PAYMENTS WILL BE MADE ON A MONTHLY BASIS. THE PAYMENTS UNDER THIS CLAUSE WILL RESTRICTED TO RS.60 LAKHS PER ANNUM AND THIS LIMIT WILL BE INDEXED AS PER THE COST INFLATION INDEX SPECIFIED IN SECTION 48 OF THE INCOME TAX ACT, 1961 AND THE BASE YEAR FOR THE INDEXATION BEING 2007-08 OR INCREASED EVERY YEAR AT THE SIMPLE RATE OF 5% PER ANNUM, WHICHEVER IS HIGHER. PAYMENTS AS PER THIS CLAUSE SHALL BE MADE IN CASE ANY PARTNER RETIRES ON BECOMING PERMANENTLY INCAPACITATED FROM CONTINUING AS PARTNER OR DIES. IN SUCH CASE THE QUALIFYING PERIOD WILL NOT BE CONSIDERED. IN CASE OF DEATH OF A PARTNER OR RETIREMENT OF A PARTNER DUE TO INCAPACITY BEFORE COMPLETION OF THREE YEARS AS A PARTNER, THEN THE AVERAGE ANNUAL AMOUNT RECEIVED IN THE PREVIOUS YEAR WOULD BE WORKED OUT WITH REFERENCE TO THE AMOUNT RECEIVED IN THE PREVIOUS YEARS IN ABSOLUTE TERMS FOR THE PERIOD HE SERVED AS A PARTNER. PROVIDED THAT A PARTNER WHO RETIRES ON ATTAINMENT OF THE NORMAL RETIREMENT AGE AFTER COMPLETING AT LEAST FIVE CONTINUOUS YEARS AS A PARTNER BUT WITHOUT COMPLETING THE QUALIFYING PERIOD OF 20 YEARS SHALL BE ENTITLED TO THE PAYMENTS OF RS.6,00,000 PER ANNUM FOR A PERIOD OF TEN YEARS FROM THE DATE OF THE RETIREMENT. THE ABSOLUTE AMOUNT REFERRED TO ABOVE WILL BE INDEXED AS PER THE COST INFLATION INDEX SPECIFIED IN SECTION 48 OF THE INCOME TAX ACT, 1961 AND THE BASE YEAR FOR THE INDEXATION BEING 2007-08 OR INCREASED EVERY YEAR AT THE SIMPLE RATE OF 5% PER ANNUM, WHICHEVER IS HIGHER. IV. NOTWITHSTANDING ANYTHING CONTAINED ABOVE THE AMOUNTS PAYABLE UNDER CLAUSE 10.N III TO A RETIRING PARTNER OF THE SPOUSE OR NOMINEE OF A DECEASED PARTNER IN ANY FINANCIAL YEAR (ON OR AFTER 1 APRIL 2007) SHALL NOT BE LESS THAN RS.6,00,000 PER ANNUM PROVIDED THE SAID PARTNER HAS COMPLETED THE QUALIFYING PERIOD OF 20 YEARS. THE MINIMUM AMOUNT OF RS.6,00,000 SHALL BE ADJUSTED BY COST INFLATION INDEX SPECIFIED IN SECTION 48 OF THE INCOME TAX ACT, 1961, THE BASE YEAR FOR THE INDEXATION BEING ITA NO.2077 & 2079/16 :- 8 -: 2007-08 OR INCREASED EVERY YEAR AT THE SIMPLE RATE OF 5% PER ANNUM WHICHEVER IS HIGHER. V. NOTWITHSTANDING ANYTHING CONTAINED IN CLAUSE 10.N.III AND CLAUSE 10.N.IV, THE AMOUNTS PAYABLE TO A RETIRING PARTNER OR THE SPOUSE OR NOMINEES OF A DECEASED PARTNER UNDER THIS CLAUSE SHALL CEASE AT THE END OF THE FINANCIAL YEAR IN WHICH THE PARTNER CONCERNED ATTAINS THE AGE OF 75 YEARS, OR WOULD HAVE ATTAINED THE SAID AGE IF ALIVE. VI. THE PAYMENTS UNDER THIS CLAUSE AND IN ANY OTHER CLAUSE OF THIS AGREEMENT ARE SUBJECT TO DEDUCTION OF TAX AT SOURCE, AS MAY BE APPLICABLE FROM TIME TO TIME. VII. ON THE BASIS OF III TO VI ABOVE, THE PAYMENT O F PENSION TO PARTNERS UNDER CLAUSES 10.M AND 10.N WILL BE MADE AS PER ANNEXURE V. FOR THE AVOIDANCE OF ANY DOUBT, IT IS CLARIFIED THAT A PERSON WHO BECOMES A PARTNER IN THE FIRM OR PARTICIPATING FIRMS ON OR AFTER 1 APRIL 2010 SHALL NOT BE ENTITLED TO ANY PAYMENTS COMPUTED UNDER THIS CLAUSE. 9. THE LD. SENIOR COUNSEL FURTHER EXPLAINED THAT IN VI EW OF THE CLAUSES IN THE PARTNERSHIP DEED, THERE IS A PRIOR C HARGE IN RESPECT OF PAYMENTS DUE TO RETIRED PARTNERS AS THE GROSS FEE R ECEIVED BY THE CONTINUING PARTNERS. IN VIEW OF THE PRIOR CHARGE A RISING FROM THE PROVISIONS OF THE PARTNERSHIP DEED, THE SAME IS PAY ABLE TO THE RETIRED PARTNERS AND THEREFORE, IT IS NOT INCOME OF THE AS SESSEE-FIRM. THE NATURE OF APPLICATION IS SUCH THAT THE SAME PAYABLE TO THE RETIRED PARTNERS CANNOT BE SAID TO BE PART OF THE ASSESSEE S INCOME. HE ITA NO.2077 & 2079/16 :- 9 -: ARGUED THAT THE SUMS PAID TO THE RETIRING PARTNERS WAS RELATED TO THE WORK CARRIED ON BY THE PARTNERS DURING THEIR SERVIC E BUT THE BILLS NOT RAISED, WORK COMPLETED BUT BILLS NOT RAISED AND WOR K PARTLY COMPLETED AND NOT BILLED ETC. THE ASSESSEE-FIRM IS CARRYING ON THE BUSINESS IN THE NAME OF DELOITTE HASKINS & SELLS. IN NUTSHELL , IT IS A CONSIDERATION TO THE RETIRED PARTNERS TO CONTINUE THE SAME BUSINE SS IN THE SAME LINE WITH THE NEW PARTNERS AND TO RETAIN THE RETIRED PAR TNERS TO SUPPORT COMPETITIVENESS ON THEIR OWN AND NOT TO JOIN A NEW FIRM WHICH IS A THREAT TO THE EXISTING FIRM AND TO SETTLE THE PEND ING BILLS RELATING TO THE INCOME EARNED BY THEM AS A PARTNER DURING THEIR TENURE IN THE PARTNERSHIP-FIRM. FURTHER THE SENIOR COUNSEL FURT HER SUBMITTED THAT THE METHOD AND MANNER OF PAYMENT IS DETERMINED AS P ER CLAUSE 10(M) OF THE PARTNERSHIP DEED WHICH IS REPRODUCED IN THE EARLIER PARAGRAPH. 10. REFERRING TO THE DECISION OF ITAT MUMBAI BENCH IN T HE CASE OF ASSOCIATED CONCERN OF THE ASSESSEE-FIRM M/S C.C CHOKSHI & CO. VS JCIT IN I.T.A.NO.S 492 TO 495/MUM/2003 FOR THE A.Y 1995-96 TO 1997- 98 THE LD. SENIOR COUNSEL SUBMITTED THAT ON IDENTI CAL FACTS, THE ITAT MUMBAI, BENCH HELD THAT THE PAYMENT IS BY OVERRIDIN G TITLE BUT NOT AN APPLICATION OF INCOME. HE FURTHER SUBMITTED THAT C LAUSES 22 AND 28 OF PARTNERSHIP DEED OF M/S C.C. CHOKSHI & CO. ARE IDEN TICAL TO THE CLAUSES 10(M), 10(N) AND 7(E) OF ASSESSEES PARTNERSHIP DE ED AND A ITA NO.2077 & 2079/16 :- 10 -: COMPARATIVE CHART WAS SUBMITTED BY THE SENIOR COUNS EL WHICH READS AS UNDER: C LAUS E I N T HE PARTNE RS HIP DEED OF C . C . CHO K SH I & CO. CLAUSE IN THE PARTNER S HIP DEED OF THE APPELLANT D ES C R I PT I ON DETAILS S RIGHT TO RECEIVE PAYMENTS THE LIST OF SUMS ENTITLED TO BE CLAUSE 10M ON RETIREMENT OR DEATH. RECEIVED DETERMINED BASED CLAUSE 10N OF THE DEED. CLAUSE 22 DETERMINATION AND PAYMENT OF AMOUNTS UNDER CLAUSE 10M. THE PERIOD POST WHICH THE RETIRED PARTNER SHALL BE ELIGIBLE FOR THE PAYMENTS MADE AS PER CLAUSE 10M OF THE DEED. CLAUSE 10 N PAYMENTS UNDER CLAUSE 10N & 10.N.VI ARE PRIOR CHARGE ON THE RECEIPTS OF THE FIRM. PAYMENT MADE TO RETIRED PARTNERS IS A PRIOR CHARGE ON RECEIPTS OF THE FIRM CLAUSE 28 CLAUSE 7(E) 11. THE ITAT MUMBAI IN THE CASE OF M/S C.C. CHOKSHI & C O. (SUPRA), WHILE DEALING WITH THE ISSUE OF PAYMENTS M ADE TO THE RETIRED PARTNERS ON IDENTICAL FACTS HAS HELD AS UNDER: 8. WE HAVE HEARD BOTH THE PARTIES AND CONSIDERED T HEIR RIVAL CONTENTIONS. THE HON'BLE SUPREME COURT IN THE CASE OF CIT VS SITALDAS TIRATHDAS (SUPRA) HAS CONSIDERED THE ASPEC T OF DIVERSION OF INCOME BY OVERRIDING TITLE AND HAS LAID DOWN THE TE STS FOR APPLICATION OF THE RULE OF DIVERSION OF INCOME BY O VERRIDING TITLE. IT IS LAID DOWN AS UNDER: 'IN OUR OPINION, THE TRUE TEST IS WHETHER THE AMOUN T SOUGHT TO BE DEDUCTED, IN TRUTH, NEVER REACHED THE ASSESSEE AS HIS INCOME. OB LIGATIONS, NO DOUBT, THERE ARE IN EVERY CASE, BUT IT IS THE NATURE OF TH E OBLIGATION WHICH IS THE ITA NO.2077 & 2079/16 :- 11 -: DECISIVE FACT. THERE IS A DIFFERENCE BETWEEN AN AMO UNT WHICH A PERSON IS OBLIGED TO APPLY OUT OF HIS INCOME AND AN AMOUNT WH ICH BY THE NATURE OF THE OBLIGATION CANNOT BE SAID TO BE A PART OF THE INCOM E OF THE ASSESSEE. WHERE BY THE OBLIGATION INCOME IS DIVERTED BEFORE I T REACHES , IT IS DEDUCTIBLE; BUT WHERE THE INCOME IS REQUIRED TO BE APPLIED TO DISCHARGE AN OBLIGATION AFTER SUCH INCOME REACHES THE ASSESSEE, THE SAME CONSEQUENCE IN LAW, DOES NOT FOLLOW. IT IS THE FIRST KIND OF PA YMENT WHICH CAN TRULY BE EXCUSED AND NOT THE SECOND. THE SECOND PAYMENT IS M ERELY AN OBLIGATION TO PAY ANOTHER A PORTION OF ONE'S OWN INCOME, WHICH HAS BEEN RECEIVED AND IS SINCE APPLIED. THE FIRST IS A CASE IN WHICH THE INCOME NEVER REACHES THE ASSESSEE, WHO EVEN IF HE WERE TO COLLECT IT, DOES S O, NOT AS PART OF HIS INCOME, BUT FOR AND ON BEHALF OF THE PERSON TO WHOM IT IS PAYABLE' THIS PROPOSITION STILL HOLDS GOOD EVEN TODAY. LET U S NOW SEE WHETHER THE FACTS IN THE CASE SATISFIES THE TEST LAID DOWN BY THE HON'BLE SUPREME COURT' 9. FOR PROPER APPROPRIATION. CLAUSE 22 OF THE PARTN ERSHIP DEED OF THE ASSESSEE-FIRM IS REPRODUCED HEREUNDER: 22 IT IS AGREED THAT IN ADDITION TO THE AMOUNTS, IT AN Y, PAYABLE AS PROVIDED IN THE PRECEDING CLAUSE, NAMELY CLAUSE 21, A RETIRING PARTNER OR THE LEGAL REPRESENTATIVE OF A DECEASED P ARTNER AS THE CASE MAY BE, SHALL BE ENTITLED TO RECEIVE THE FURTH ER SUM SPEARED IN CLAUSE 23, IN RESPECT OF THE FOLLOWING:- (A) (I) AMOUNTS BILLED, BUT NOT RECEIVED, (II) WORK COMPLETED, BUT NOT BILLED, AND (III)WORK PARTLY COMPLETED AND NOT BILLED AS AT THE DATE OF DEATH OF RETIREMENT, AS THE CASE MAY BE, HAVING REGARD TO TH E FACT THAT THE PARTNERSHIP FOLLOWS THE CASH SYSTEM OF ACC OUNTING, AND (B) (I) IN CONSIDERATION OF THE RETIRING PARTNER OR THE LEG AL REPRESENTATIVE OF THE DECEASED PARTNER, AS THE CASE MAYBE, PERMITTING THE CONTINUING PARTNERS THE USE OF THE F IRM NAME OF C. C. CHOKSHI & CO. TO CARRY ON THE PROFESSION, ALONG WITH THE CLIENTELE AND THE ATTENDANT RIGHTS OF THE FIRM, (II) THE CONTRIBUTION MADE BY THE SURVIVING PARTNER OR THE DECEASED PARTNER AS THE CASE MAY BE DURING HIS ASSO CIATION WITH THE FIRM, IN INCREASING THE FUTURE INCOME EARN ING POTENTIAL OF THE FIRM, THE BENEFITS THEREOF ARE LIKELY TO BE REFLECTED IN THE RECEIPT OF THE FIRM FOR A REASONABLE NUMBER OF YEAR S IMMEDIATELY FOLLOWING THE RETIREMENT OR DEATH OF TH E PARTNER, AND (III) THE RESTRICTIVE COVENANTS CONTAINED IN CLAUSE 26 THEREOF FROM ENGAGING IN ANY GAINFUL OCCUPATION OR IN THE PRACTI CE OF THE ITA NO.2077 & 2079/16 :- 12 -: PROFESSION OF ACCOUNTANCY IN INDIA AFTER SUCH RETIR EMENT. 10. THE FIRST TEST TO BE APPLIED IS TO SEE THE N ATURE OF THE OBLIGATION OF THE ASSESSEE. THIS OBLIGATION IS CREATED BY THE PARTNERSHIP DEED. THE HON 'BLE SUPREME COURT IN THE CASE OF PRINCE KH ANDELRAO GAIKWAD VS. CIT REPORTED IN 16 ITR 294 AT PAGE 373 HELD AS UNDER ' THERE IS NO DISTINCTION BETWEEN A CHARGE CREATED BY A DECREE OF COURT AND ONE CREATED BY AGREEMENT OF PARTIES, PROVIDED THAT BY THAT CHARGE THE INCOME FROM THE PROPERTY CAN BE SAID TO BE DIVERTED SO AS TO BRING THE MATTER WITHIN SECTION (9)(1)(IV) OF THE ACT. ' THUS, IT CANNOT BE SAID THAT AS THIS. PARTNERSHIP D EED IS AN AGREEMENT BETWEEN THE PARTIES. IT DOES NOT CREATE ANY CHARGE ON THE INCOME OF THE ASSESSEE. 11. THIS CHARGE OVER THE INCOME OF THE ASSESSEE IS CREATED IN FAVOUR OF THE RETIRING PARTNER OR LEGAL REPRESENTATIVE OF THE DECEASED PARTNER FOR THE WORK EXECUTED BY THEM BEFORE RETIREMENT OR DEATH, BUT THE AMOUNTS WERE NOT COLLECTED DURING THEIR TENURE AND ALSO AS A CONSIDERATION FOR PERMITTING THE CONTINUING PARTNER S TO USE NAME OF THE FIRM AS WELL AS TO CARRY ON THE PROFESSION ALONG WI TH THE CLIENTELE AND ATTENDANT RIGHTS OF THE FIRM AND FOR INCREASING THE FUTURE INCOME EARNING POTENTIAL OF THE FIRM THE BENEFITS WHEREOF ARE LIKELY TO BE REFLECTED IN THE RECEIPT OF THE FIRM FOR A REASONAB LE NUMBER OF YEARS IMMEDIATELY FOLLOWING THE RETIREMENT/DEATH OF THE PARTNER AND ALSO FOR RESTRICTING THEMSELVES FROM ENGAGING IN AN Y GAINFUL OCCUPATION OR IN THE PRACTICE OF THE PROFESSION OF ACCOUNTANCY IN INDIA AFTER SUCH RETIREMENT WHICH IS IN COMPETITION WITH THAT OF THE ASSESSEE. THUS, IT IS CLEAR THAT THE AMOUNTS TO BE PAID UNDER CLAUSE 22 ARE IN LIEU 0 THEIR SERVICES RENDERED ALREADY TO THE FIRM AND FOR RESTRAINING THEMSELVES TO CARRY ON ANY COMPETING PR OFESSION. THUS, WHAT IS BEING PAID IS EXPENDITURE NECESSARY FOR EAR NING THE INCOME . 12. IT IS THEREFORE CLEAR THAT THE ASSESSEE IS OBLI GED TO PAY THE AMOUNT COMPUTED UNDER CLAUSE 23 BEFORE DISTRIBUTION OF THE SAME UNDER CLAUSE 28 OF THE PARTNERSHIP-DEED AND IT CANNOT BE SAID TO BE AN APPLICATION OF THE INCOME BY THE ASSESSEE FIRM. AS UNDER THIS OBLIGATION THE INCOME IS DIVERTED BEFORE IT REACHES THE ASSESSEE IT IS DEDUCTIBLE. THE ASSESSEE IS IN FACT IN THE POSITION OF A COLLECTOR OF INCOME ON BEHALF OF THE PERSONS TO WHOM IT IS PAYAB LE AND IS ONLY PAYING THE AMOUNT SUBSEQUENTLY. THE DECISIONS RELIE D UPON BY THE LEARNED DR ARE NOT APPLICABLE TO THE FACTS OF THE C ASE. ITA NO.2077 & 2079/16 :- 13 -: 12. THE SENIOR COUNSEL ALSO RELIED ON THE DECISION OF I TAT MUMBAI IN THE CASE OF M/S C.C. CHOKSHI & CO FOR TH E ASSESSMENT YEARS 200-01 TO 2001-02 WHICH HELD THE ISSUE IN FA VOUR OF THE ASSESSEE FOLLOWING DECISION OF THE CO-ORDINATE BEN CH IN I.T.A.NOS. 492 TO 495/MUM/2003 AND OBSERVED THAT THE ITAT HAS REFERRED TO SEVERAL JUDGMENTS IN THE ABOVE CASE INCLUDING THE J UDGMENT OF HON'BLE SUPREME COURT IN THE CASE OF CIT VS SITALDAS TIRATH DAS, 41 ITR 367 WHICH WAS RELIED UPON BY THE ASSESSING OFFICER IN T HE ASSESSMENT ORDER AS WELL AS BY THE CIT(A) IN HIS APPELLATE ORD ER. THE APPEAL FILED BY THE REVENUE AGAINST THE ABOVE ORDER OF THE TRIBU NAL WAS DISMISSED BY THE HON'BLE BOMBAY HIGH COURT IN ITA NO.209 OF 2 008 DATED 25.7.2008. THE BOMBAY HIGH COURT FOLLOWED ITS JUDGM ENT IN THE CASE OF CIT VS MULLA AND MULLA AND CRAIGIE, BLUNT AND CA ROE 1991 ITR 198. THE LD. SENIOR COUNSEL RELIED ON THE FOLLOWING DECI SIONS ALSO ON IDENTICAL FACTS: 1. CIT VS PUNJAB TRACTORS CO-OP. MULTIPURPOSE SOCIETY LTD, 95 TAXMAN 579 2. GFA ANLAGENBAU GMBH VS ITO, 57 ITD 81 (HYD) 3. S. PRIYADARSAN VS JCIT, 73 TTJ 378 (CHENNAI) 4. ACIT 11(2) VS M/S A.F. FERGUSON & CO. IN I.T.A.NO.7792/MUM/2004 DATED 30.1.2008 5. CIT VS M/S A.F FERGUSON AND CO. IN I.T.A.NO.419 OF 2012 DATED 9.7.2014 BOMBAY HIGH COURT. ITA NO.2077 & 2079/16 :- 14 -: 6. CIT VS SUBRAMANIAM BROS, 236 ITR 148 (MAD) 7. CIT VS MULLA & MULLA & CRAIGIE BLUNT & CAROE, [1991 ] 54 TAXMAN 192. 8. CIT VS RSM & I CO. IN I.T.A.NO. 188 OF 2014 DATED 11.8.2016 [BOMBAY HIGH COURT] 9. CIT VS NARIMAN B. BHARUCHA & SONS, [1980] 4 TAXMAN 76 (BOM) 13. ON THE OTHER HAND, THE LD. DR ARGUED THAT THE PAYME NT MADE TO RETIRED PARTNERS WAS MADE FROM THE INCOME OF THE FIRM AND HENCE, CANNOT BE REGARDED AS DIVERSION BUT MUST BE REGARDED AS APPLICATION OF INCOME AND RELIED ON THE ORDERS OF T HE LOWER AUTHORITIES. 14. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND THE MA TERIAL PLACED BEFORE US. WE HAVE ALSO CAREFULLY GONE THRO UGH THE DECISIONS OF THE MUMBAI ITAT IN THE CASE OF ASSOCIATED CONCER N OF THE ASSESSEE M/S C.C. CHOKSHI & CO. (SUPRA) AD ALSO THE PARTNERS HIP DEED AND ITS RELEVANT CLAUSES. CLAUSE 10(M) OF THE PARTNERSHIP DEED DEAL WITH THE RIGHT TO RECEIVE PAYMENTS ON RETIREMENT OR DEATH. AS PER CLAUSE 10(M), THE RETIRING PARTNERS IS ENTITLED TO RECEIVE THE SUMS DETERMINED ON THE BASIS OF CLAUSE 10(N) IN RESPECT OF THE AMOU NTS BILLED BUT NOT RECEIVED ETC. THE PAYMENT IS MADE TO THE RETIRING PARTNER AS CONSIDERATION FOR PERMITTING THE CONTINUING PARTN ERS THE USE OF THE FIRM NAME TO CARRY ON THE PROFESSION, ALONGWTIH THE CLIENTELE AD THE ATTENDANT RIGHTS OF THE FIRM. THE CONTRIBUTION MAD E BY THE SURVIVING ITA NO.2077 & 2079/16 :- 15 -: PARTNER, DURING HIS ASSOCIATION WITH THE FIRM, IN I NCREASING THE FUTURE INCOME EARNED AS DISCUSSED IN CLAUSE 10 OF THE PART NERSHIP DEED. THE DETERMINATION OF THE PAYMENT IS CALCULATED AS PER C LAUSE 10(N) OF THE PARTNERSHIP DEED. THE CLAUSES OF THE PARTNERSHIP D EED ARE IDENTICAL TO THAT OF THE DECISION OF THE ITAT MUMBAI BENCH IN TH E CASE OF M/S C.C. CHOKSHI & CO. (SUPRA). 15. THE LD. DRS CONTENTION IS THAT THE PAYMENT TO RETI RED PARTNERS IS AN APPLICATION OF INCOME. WHEN THE PA RTNERSHIP DEED SPECIFIES THAT THE PAYMENT MADE TO THE RETIRING PA RTNER IS WITH REGARD TO THE WORK DONE BY THEM DURING THE TENURE AS A PAR TNER AND TOWARDS THE SETTLEMENT OF THEIR INCOME FOR THE WORK DONE AN D TO ALLOW THE PARTNERSHIP FIRM TO CONTINUE ITS BUSINESS, THE PAYM ENT CANNOT BE HELD AS AN APPLICATION OF INCOME OR GRATUITOUS PAYMENT. WE THEREFORE RESPECTFULLY FOLLOWING THE DECISION OF COORDINATE B ENCH OF ITAT MUMBAI IN THE CASE OF THE ASSOCIATE CONCERN OF THE ASSESSEE, M/S C.C. CHOKSHI & CO. (SUPRA), HOLD THAT THE PAYMENT IS A DIVERSION BY OVERRIDING TITLE AND CANNOT BE INCLUDED IN THE TOTA L INCOME. 16. THE ASSESSEE ALSO RAISED THE GROUND FOR ALLOWANCE OF EXPENDITURE U/S 37(1) OF THE ACT. SINCE WE HELD T HAT THE PAYMENT MADE TO RETIRING PARTNERS IS DIVERSION OF INCOME BY OVERRIDING TITLE, THE GROUND RAISED BY THE ASSESSEE BECAME INFRUCTUOUS A ND HENCE DISMISSED. ITA NO.2077 & 2079/16 :- 16 -: 17. THE NEXT GROUND IS RELATED TO THE TDS CREDIT OF ` 1,98,27,735/- WHICH HAS BEEN SUFFERED BY THE ASSES SEE IN CONNECTION WITH THE PROFESSIONAL FEES RECEIVED FROM CLIENTS. 18. THE CIT(A) IN HER APPELLATE ORDER, HAS DIRECTED THE ASSESSING OFFICER TO VERIFY THE CLAIM OF THE ASSESSEE VIS-- VIS FORM 26AS AND GIVE FOR THE CORRECT AMOUNT OF T.D.S. GIVING CORREC T AMOUNT OF PAYMENT OF TAXES IS THE DUTY OF THE ASSESSING OFFIC ER. THE ASSESSEE SHOULD NOT BE MADE TO SUFFER FOR GETTING THE REFUND OF TAXES PAID. WE DIRECT THE ASSESSING OFFICER TO ALLOW THE CORRECT AMOUNT OF TDS WITHOUT ANY FURTHER DELAY. THIS GROUND IS ALLOWED F OR STATISTICAL PURPOSES. 19. THE NEXT GROUND IS RELATED TO LEVY OF INTEREST U/S 234D TO THE EXTENT OF ` 6,10,636. 20. THE ASSESSING OFFICER IS DIRECTED TO EXAMINE THE AP PLICABILITY OF INTEREST U/S 234D AND LEVY CORRECT AMOUNT OF IN TEREST. 21. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PARTL Y ALLOWED. 22. NOW, COMING TO REVENUES APPEAL I.T.A.NO.2077/MDS/2 016, THE ONLY ISSUE IS ADDITION MADE BY THE ASSESSING OF FICER TOWARDS ADVANCE FEE OF ` 64,39,989/-. 23. DURING ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICE R FOUND THAT THE ASSESSEE IS FOLLOWING THE CASH SYSTEM OF ACCOUNTING AND RECEIVED ADVANCES OF ` 64,39,989/-. THE ASSESSEE SUBMITTED TO THE ITA NO.2077 & 2079/16 :- 17 -: A.O THAT THE SUM OF ` 64,39,989/- REPRESENTED THE RECEIPT OF ADVANCES FOR THE SERVICES NOT CONCLUDED. THE BILLS ARE RAI SED BY THE ASSESSEE ON COMPLETION OF THE WORK AND AS PER THE METHOD OF ACCOUNTING REGULARLY FOLLOWED. NOT CONVINCED WITH THE EXPLANA TION OF THE ASSESSEE THE ASSESSING OFFICER MADE THE ADDITION OF ` 64,39,989/- TO THE RETURNED INCOME. 24. AGGRIEVED BY THE ORDER OF THE ASSESSING OFFICER, TH E ASSESSEE WENT ON APPEAL BEFORE THE CIT(A). THE LD. CIT(A) ALLOWED THE ASSESSEES CLAIM BY PLACING RELIANCE ON THE JU DGMENT OF THE DELHI HIGH COURT IN THE CASE OF CIT VS DINESH KUMAR GOEL, 197 TAXMAN 375(DELHI). 25. AGGRIEVED BY THE ORDER OF THE CIT(A), THE REVENUE I S IN APPEAL BEFORE US. 26. THE LD. DR ARGUED THAT THE ASSESSEE-FIRM IS FOLLOW ING THE CASH SYSTEM OF ACCOUNTING AND ALL THE RECEIPTS REPR ESENT INCOME AND NOT OFFERING THE INCOME ON RECEIPT BASIS LEADS TO D IFFERENCE OF INCOME RECOGNITION AND CONTRADICTORY STAND TO THE PRINCIPL ES OF ACCOUNTING. FURTHER, THE LD. DR ALSO ARGUED THAT THE ASSESSEE WAS ACCOUNTING THE EXPENDITURE ON CASH BASIS, WHICH RESULTED IN MISMAT CH FREQUENTLY. 27. ON THE OTHER HAND, THE LD. AR SUBMITTED THAT THE A SSESSEE HAS DISCLOSED ADVANCES OF ` 64,39,989/- AT THE END OF FINANCIAL YEAR 2010-11. THE SAID ADVANCES REPRESENTED ADVANCES RE CEIVED FROM ITA NO.2077 & 2079/16 :- 18 -: CLIENTS ON ACCOUNT OF PROFESSIONAL FEES. THE ASSE SSEE IS FOLLOWING CASH SYSTEM OF ACCOUNTING AND THE BILLS ARE RAISED AS AN D WHEN THE SERVICES ARE RENDERED. NO PROFESSIONAL CHARGES ARE RECEIVED IN ADVANCE, THEREFORE, THE SAME CANNOT TAKE THE CHARACTER OF IN COME UNLESS THE INVOICES ARE RAISED AND SERVICES ARE RENDERED. IN EXCEPTIONAL CASES, THE ASSESSEE-FIRM RECEIVED ADVANCES FROM CLIENTS B EFORE RENDERING SUCH SERVICES. SUCH ADVANCES ARE KEPT IN ADVANCE A CCOUNT. THE ADVANCE RECEIVED FROM CLIENT IS TRANSFERRED TO PROF ESSIONAL FEE ACCOUNT ON COMPLETION OF SERVICE. THE ASSESSEE FURTHER SU BMITTED THAT THE ADVANCE IS A VERY SMALL AMOUNT AS COMPARED TO THE A GGREGATE PROFESSIONAL FEES. APART FROM THE ABOVE, ALTERNATI VELY THE LD. AR SUBMITTED THAT THE ADVANCE RECEIVED DURING THE ASSE SSMENT YEAR UNDER CONSIDERATION WAS ONLY ` 2,79,161/- WHICH MAY BE ADDED TO THE INCOME OF THE ASSESSEE IF THE ASSESSEES CONTENTI ONS ARE NOT ACCEPTED. FURTHER LD. A.R SUBMITTED THAT ON IDENTIC AL FACTS IN THE CASE OF A.F. FERGUSON &CO IN ITA NO.7792/M/04 DATED 30/0 1/2008 MUMBAI ITAT HAS DISMISSED THE APPEAL OF THE REVENUE. 28. WE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATE RIAL PLACED BEFORE US. THE ASSESSEE-FIRM IS A CHARTERE D ACCOUNTANTS RENDERING PROFESSIONAL SERVICES. AS PER BALANCE SH EET AS ON 31.3.2011 THE ADVANCE OUTSTANDING WAS ` 64,39,989/-. THE ASSESSEE CONTENDED THAT THE AMOUNT OF ADVANCES WERE RECEIVED FROM CLIE NTS FOR THE ITA NO.2077 & 2079/16 :- 19 -: SERVICES NOT YET RENDERED, THEREFORE, THE INCOME IS NOT ACCRUED AND ACCORDINGLY, THE ADVANCE CANNOT PARTAKE THE CHARACT ER OF INCOME. FURTHER, THE ASSESSEE SUBMITTED THAT ALL ADVANCES CANNOT BE HELD AS INCOME. IN OTHER WORDS, THE RECEIPT RESUMES THE CH ARACTER OF INCOME ONLY WHEN THE SERVICES ARE RENDERED. THE ASSESSEE IS FOLLOWING THE SAME METHOD OF ACCOUNTING CONSISTENTLY FOR SEVERAL YEARS. THE ASSESSEE PLACED RELIANCE ON THE JUDGMENT OF P& H HI GH COURT IN THE CASE OF CIT VS PUNJAB TRACTORS CO-OPERATIVE MULTI-P URPOSE SOCIETY LTD, 234 ITR 10, DECISION OF THIS TRIBUNAL IN S. PRIYADA RSAN VS JCIT, 73 TTJ 738 AND ON IDENTICAL ISSUE IN THE CASE OF ASSOCIATE D CONCERN OF THE ASSESSEEVIZ. A.F. FERGUSON & CO., IN I.T.A.NO.7792/ MUM/2004 DATED 30.1.2008, ITAT MUMBAI. IN THE FACTS AND CIRCUMSTAN CES OF THE CASE, WE AGREE WITH THE SUBMISSION OF THE ASSESSEE THAT THE ADVANCE CANNOT BE TREATED AS INCOME IN THE HANDS OF THE AS SESSEE UNLESS THE SERVICES ARE RENDERED BY THE ASSESSEE. THE ASSESS ING OFFICER HAS NOT MADE OUT A CASE THAT ADVANCES RECEIVED IN QUESTION WERE TOWARDS THE SERVICES RENDERED BY THE ASSESSEE. THE LD. DR ALS O COULD NOT BRING ANY EVIDENCE TO CONTROVERT THE SUBMISSIONS MADE BY THE ASSESSEE. IN VIEW OF THE ABOVE FACTS AND PLACING RELIANCE ON THE DECISIONS RELIED UPON BY THE ASSESSEE CITED (SUPRA) WE DO NOT FIND ANY REASON TO INTERFERE WITH THE ORDER OF THE CIT(A) AND ACCORDIN GLY WE UPHOLD THE SAME. ITA NO.2077 & 2079/16 :- 20 -: 29. IN THE RESULT, THE REVENUES APPEAL IS DISMISSED. 30. TO SUMMARIZE, THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED WHEREAS THAT OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 25 TH NOVEMBER, 2016, AT CHENNAI. SD/- SD/- ( . . . ) ) (N.R.S. GANESAN) / JUDICIAL MEMBER ( . . ' #$ ) (D.S. SUNDER SINGH) % / ACCOUNTANT MEMBER / CHENNAI ! / DATED: 25 TH NOVEMBER, 2016 RD !' # $% &% / COPY TO: 1 . '( / APPELLANT 4. ) / CIT 2. #*'( / RESPONDENT 5. %+, # - / DR 3. ) () / CIT(A) 6. ,/ 0 / GF