Vikram Gulati, Ghaziabad V. ACIT, Noida

ITA 6013/DEL/2010

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 69567 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 10 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-11-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: H
• Next Hearing Date: 12-09-2013
• Assessment Year: 2006-2007
• Appeal Filed On: 30-12-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SAMEER SHARMA
• Assessee Lawyers: SHALESH GUPTACA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH H: NEW DELHI) BEFORE SHRI G. D. AGRAWAL, VICE PRESIDENT AND SHRI C. M. GARG, JUDICIAL MEMBER ITA NO.6013/DEL/ 2010 (ASSESSMENT YEAR:2006-07) VIKRAM GULATI VS. ACIT F-PH 1, NIHO SCOTTISH GARDEN APPARTMENTS, CIRCLE N OIDA, INDRAPURAM INCOME TAX OFFICE, IST FLOOR, SECTOR-20 GHAZIABAD NOIDA. PAN: ABSPG2908E (APPELLANT) (RESPONDENT) ITA NO.67/DEL/ 2011 (ASSESSMENT YEAR:2006-07) ACIT VS VIKRAM GULATI CIRCLE NOIDA , F-PH 1, NIHO SCOTTISH GARDEN APPART MENTS, INCOME TAX OFFICE, INDRAPURAM 1 ST FLOOR, SECTOR-20 NOIDA. GHAZIABAD PAN: ABSPG2908E (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI SALIL AGARWAL, SHRI VIKRAM GULATI, ADV. & SHRI SHALESH GUPTA,CA REVENUE BY : SHRI SAMEER SHARMA, SR. DR ORDER PER C. M. GARG, J M: ABOVE CAPTIONED BOTH THE APPEALS HAVE ARISED FROM T HE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-GHAZIABAD DATE D 28.10.2010 IN APPEAL NO-01/2008-09/GZB FOR THE ASSESSMENT YEAR 20 06-07. SINCE BOTH ITA NO.6013/DEL/2010 & 67/DEL/2011 2 THE APPEALS ARE PERTAINING TO THE SAME ORDER THEREF ORE, FOR THE SAKE OF CONVENIENCE AND CLARITY IN THE FINDINGS, WE HAVE CL UBBED THESE APPEALS AND DISPOSING THEM TOGETHER BY THIS CONSOLIDATED ORDER. GROUND NO.1 OF THE REVENUE 2. THE FIRST GROUND IN ITA NO.67/DEL/2011 READS AS UNDER: 1. THAT THE LD. CIT (A) HAS ERRED IN LAW AND ON FA CTS BY DELETING THE ADDITION OF RS.9,12,750/- MADE DUE TO DIFFERENCE IN RECEIPTS. 3. APROPOS ABOVE GROUND OF REVENUE, THE LD. DEPARTM ENTAL REPRESENTATIVE (DR) SUBMITTED THAT THE ASSESSEE CLA IMED HIGHER TDS DURING THE YEAR AND THERE WAS SUBSTANTIAL DIFFERENT BETWEE N AMOUNTS SHOWN AS RECEIVED AND AMOUNT SHOWN AS TDS. THEREFORE, THE AS SESSING OFFICER RIGHTLY MADE ADDITIONS OF RS.5,86,950/- PERTAINING TO CORRESPONDING EXCESSIVE TDS AND RECEIPTS FROM SEDCO ( A CLIENT OF THE ASSESSEE) REIMBURSEMENT OF VARIOUS EXPENSES. 4. REPLYING TO THE ABOVE, THE LD. COUNSEL FOR THE A SSESSEE POINTED OUT PARAGRAPH NO.7.5, 7.5(A) AND 7.5 (B) OF THE IMPUGNE D ORDER AND SUBMITTED THAT THE ASSESSEE CLAIMED HIGHER TDS BECAUSE THE SA ME WAS DEDUCTED DURING THE YEAR UNDER CONSIDERATION BUT THE AMOUNT OF RECE IPT WAS RELATED TO THE NEXT ASSESSMENT YEAR THAT WAS 2007-08. THE COUNSEL FURTHER CONTENDED THAT AS PER SECTION 199 OF THE INCOME TAX ACT,1961 (FOR SHORT THE ACT.) ITA NO.6013/DEL/2010 & 67/DEL/2011 3 CORRESPONDING TDS SHOULD BE ALLOWED IN THE NEXT YEA R, THEREFORE, THE CIT (A) RIGHTLY GRANTED RELIEF TO THE ASSESSEE. THE COU NSEL FURTHER POINTED OUT THAT ALL RECEIPTS OF REIMBURSEMENT GIVEN BY SEDCO T O THE ASSESSEE HAVE BEEN TAKEN AS RECEIPTS INTO PROFIT AND LOSS ACCOUNT . THE COUNSEL OF THE ASSESSEE ALSO CONTENDED THAT IN VIEW OF THE ABOVE F ACTUAL POSITION OF ACCOUNTS, THE CLAIM OF EXPENSES BECAME NEUTRAL ON T HE COMPUTATION OF INCOME OF THE ASSESSEE, THEREFORE, THE CIT (A) RIGH TLY GRANTED RELIEF IN THIS REGARD. 5. ON CAREFUL PERUSAL OF THE IMPUGNED ORDER, WE OBS ERVE THAT THE CIT (A) GRANTED RELIEF TO THE ASSESSEE WITH FOLLOWING O BSERVATIONS AND FINDINGS: 7.5. REGARDING GROUND NO.9,12,13,14 RELATING TO PR OFESSIONAL RECEIPTS TAXABLE IN THIS YEAR VIS--VIS NEXT YEAR. I FIND FORCE IN APPELLANTS CONTENTION THAT THE RECEIPTS OF RS.5,86 ,950/- HAS ALREADY BEEN OFFERED TO TAX IN THE RETURN OF ASSESS MENT YEAR 2007-08. IF WE FOLLOW CASH SYSTEM OF ACCOUNTING; TH ESE RECEIPTS ARE TAXABLE IN ASSESSMENT YEAR 2007-08. 7.5(A) IT IS TRUE THAT TO THAT EXTENT THE ASSESSEE CLAIMED HIGHER TDS BECAUSE TDS CORRESPONDING TO RS.5,86,950/- HAS BEEN CLAIMED IN THIS YEAR. IN MY VIEW, RS.5,86,950/- IS CORRECTLY TAXABLE IN THE NEXT FINANCIAL YEAR I.E. A. Y. 2007- 08, SO, AS PER SECTION 199, THE CORRESPONDING TDS SHOULD ALSO BE A LLOWED IN THE NEXT YEAR. THE ASSESSING OFFICER IS DIRECTED TO ASSESS AND COMPUTE THE TAX ACCORDINGLY. 7.5(B) THE ASSESSEE HAS CLAIMED CERTAIN RECEIPTS AS RECEIPTS GIVEN BY SEDCO AS REIMBURSEMENT OF VARIOUS EXPENSES INCURRED BY THE ASSESSEE ON BEHALF OF SEDCO. THE AS SESSING OFFICER SEEMS TO HAVE GOT CONFUSED TO THE EXTENT TH AT HE THOUGH THAT THE ASSESSEE HAS CLAIMED THESE EXPENSES. THE A PPELLANT HAS ITA NO.6013/DEL/2010 & 67/DEL/2011 4 CLARIFIED, WHICH HAS BEEN VERIFIED BY ME TO BE CORR ECT, THAT NO PART OF SUCH REIMBURSEMENT HAVE BEEN CLAIMED AS EXP ENSES BY THE ASSESSEE. ALL THESE REIMBURSEMENT GIVEN BY SEDC O HAVE BEEN TAKEN, AS RECEIPTS, INTO THE PROFIT AND LOSS A /C. THUS THERE WOULD BE NO DISALLOWANCE OUT OF RS.3,25,800/- WHICH HAS BEEN SHOWN AS REIMBURSEMENT OF EXPENSES. 6. ACCORDINGLY, IN VIEW OF THE ABOVE OBSERVATIONS A ND FINDINGS OF THE CIT (A), WE HOLD THAT WHEN THE AMOUNT OF RS.5,85,95 0/- WAS FOUND TAXABLE IN THE NEXT ASSESSMENT YEAR THEN THE CORRESPONDING TDS WAS ALLOWED BY THE CIT (A) IN THE NEXT YEAR AND THE ASSESSING OFFICER WAS RIGHTLY DIRECTED TO COMPUTE THE TAX ACCORDINGLY. 7. WE ALSO OBSERVED THAT IN THE PROFIT AND LOSS ACC OUNT, THE ASSESSEE CLAIMED EXPENSES PERTAINING TO HIS CLIENT SEDCO AND ALSO SHOWN RECEIPTS AS REIMBURSEMENT OF EXPENSES. ON THE OTHER SIDE, PROFI T AND LOSS ACCOUNT WHICH RELATED AS NO CLAIM BY THE ASSESSEE FOR COMPU TATION OF INCOME PERTAINING TO THE EXPENSES REIMBURSE BY THE SEDCO. UNDER THESE FACTUAL MATRIX, WE HOLD THAT THE CIT (A) RIGHTLY GRANTED RE LIEF TO THE ASSESSEE ABOUT DISALLOWANCE MADE BY THE ASSESSING OFFICER AMOUNTIN G TO RS.3,85,800/- WHICH HAS BEEN SHOWN AS REIMBURSEMENT OF EXPENSES B Y ASSESSEES CLIENT SEDCO. ACCORDINGLY, WE HOLD THAT THE CIT (A) RIGHTL Y GRANTED THE RELIEF TO THE ASSESSEE ON COGENT AND JUSTIFIED BASIS AND WE A RE UNABLE TO SEE ANY PERVERSITY AND AMBIGUITY IN THE FINDINGS OF THE CIT (A) WHICH GRANTED RELIEF TO THE ASSESSEE THEREFORE, GROUND NO.1 OF THE REVEN UE IS DISMISSED. ITA NO.6013/DEL/2010 & 67/DEL/2011 5 GROUND NO.2 OF THE REVENUE & GROUND NO.2 & 3 OF THE ASSESSEE. 8. SINCE GROUND NO.2 OF THE REVENUE AND GROUND NO.2 AND 3 OF THE ASSESSEE ARE RELATED TO THE SAME ISSUE THEREFORE, W E ARE TAKING THESE GROUNDS COLLECTIVELY FOR THE SAKE OF BREVITY AND CLARITY IN THE FINDINGS. 9. APROPOS GROUND NO.2, THE LD. DEPARTMENTAL REPRES ENTATIVE (DR) SUBMITTED THAT THE CIT (A) HAS ERRED IN LAW AND FAC TS BY DELETING THE ADDITION OF RS.23,59,061/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF UNEXPLAINED ENTRY IN THE BANK ACCOUNT OF THE ASSESSEE. THE DEPA RTMENTAL REPRESENTATIVE POINTED OUT THAT THE ASSESSEE WAS FOLLOWING CASH SY STEM OF ACCOUNTANCY THEREFORE, RECEIPTS SHOWN BY THE ASSESSEE AND THE R ECEIPTS REFLECTED IN THE BANK ACCOUNT OF THE ASSESSEE SHOULD BE TREATED AS I NCOME OF THE ASSESSEE FOR THE YEAR UNDER CONSIDERATION. THE DEPARTMENTAL REPR ESENTATIVE VEHEMENTLY CONTENDED THAT THE CIT (A) WAS NOT JUSTIFIED IN GRA NTING RELIEF IN THIS REGARD. 10. ON ABOVE CONTENTION OF THE REVENUE, THE LD. COU NSEL FOR THE ASSESSEE DRAWN OUR ATTENTION TOWARDS OBSERVATIONS AND FINDIN GS OF CIT (A) IN PARAGRAPH NO. 7.3 TO 7.3(E) OF IN THE IMPUGNED ORDE R. THE COUNSEL OF THE ASSESSEE FURTHER SUBMITTED THAT AS PER REMAND REPOR T OF THE ASSESSING OFFICER THE CHEQUE ENTRIES AGGREGATING TO RS.19,09,011/- WE RE RIGHTLY TREATED AS EXPLAINED BECAUSE THEY WERE ALREADY REFLECTED IN TH E BOOKS OF ACCOUNTS OF ASSESSEE AND THE ASSESSING OFFICER HAS ACCEPTED THI S FACT IN HIS REMAND ITA NO.6013/DEL/2010 & 67/DEL/2011 6 REPORT. THE LD. COUNSEL FOR THE ASSESSEE ALSO CONTE NDED THAT THE REVENUE AUTHORITIES HAVE NOT DISPUTED THE FACT THAT THE ASS ESSEE AFFECTED SALE OF HOUSE HOLD ITEMS AND THE SALE WAS DULY SUPPORTED BY VOUCH ERS AND CONFIRMATI0NS. IT WAS POINTED ON BEHALF OF THE ASSESSEE THAT WHEN THE SALE OF HOUSE HOLD ITEMS WAS FOUND TO BE CORRECT THEN THE CLAIM OF THE ASSESSEE WAS WRONGLY DENIED ABOUT THE HALF PART OF THE CLAIM WITHOUT ANY JUSTIFIED REASON. 11. AFTER CAREFUL CONSIDERATION OF ABOVE SUBMISSION S OF BOTH THE PARTIES PERTAINING TO THE GROUND NO.2 OF THE REVENUE AND GR OUND NO.2 AND 3 OF THE ASSESSEE. FROM THE REMAND REPORT, WE OBSERVE THAT T HE ASSESSING OFFICER VERIFIED ENTRIES APPEARING IN THE BOOKS OF ACCOUNTS VIS--VIS BANK ACCOUNT OF THE ASSESSEE AND THE ASSESSING OFFICER ALSO FOUND T HAT ALL THE CHEQUE ENTRIES AMOUNTING TO RS.28.10 LACS WERE REFLECTED AS RECEIP TS IN THE BOOKS ACCOUNTS OF THE ASSESSEE. IN VIEW OF THE ABOVE CHEQUE ENTRI ES AGGREGATING TO RS.19,09,011/- WERE RIGHTLY TREATED AS EXPLAINED BY CIT (A). THE FIRST APPELLATE AUTHORITY RIGHTLY GRANTED RELIEF TO THE A SSESSEE IN THIS REGARD. 12. COMING TO THE ISSUE OF SALE OF HOUSE HOLD EXPEN DITURE, WE CLEARLY OBSERVE THAT THE AUTHORITIES HAS NOT DISPUTED THE G ENUINENESS OF SALE OF HOUSE HOLD EXPENDITURE WHICH BROUGHT AMOUNT OF RS.8,92,10 0/- AND THE SAME WAS DEPOSITED TO THE BANK ACCOUNT OF THE ASSESSEE. THE CIT (A) HAS ACCEPTED THE ITA NO.6013/DEL/2010 & 67/DEL/2011 7 EXPLANATION OF THE ASSESSEE GRANTING HALF RELIEF TO THE ASSESSEE BY HOLDING AS UNDER: 7.3(C) AFTER CAREFUL CONSIDERATION, I FIND THAT TH E ANCESTRAL HOUSE BELONGED TO THE ASSESSEES FATHER A S WELL AS BROTHERS AND SISTERS BUT NO SUCH SALE HAS BEEN CLAI MED BY OTHER FAMILY MEMBERS. THUS, ALTHOUGH THE SALES OF HOUSEHO LD ITEMS ARE ALL DULY SUPPORTED BY VOUCHERS AND CONFIRMATION S AND IT IS ALSO CORRECT THAT THE ANCESTRAL HOUSE HAS BEEN SOLD FOR WHICH CAPITAL GAIN HAS BEEN OFFERED IN THE NEXT YEAR; STI LL THE ASSESSEES EXPLANATION CAN BE TREATED AS ONLY PART LY ACCEPTABLE. SALES ARE TAKEN TO BE GENUINE BUT THE C LAIM THAT ALL THESE RECEIPTS HAVE COME TO THE COFFER OF THE ASSES SEES FATHER HAD EXPIRED BUT SUCH SALE PROCEEDS SHOULD HAVE BEEN DISTRIBUTED, UNDER NORMAL CIRCUMSTANCES, INTO THE H ANDS OF THREE BROTHERS. IN THIS RESPECT, THE APPELLANT HAS SUBMITTED THAT ONE BROTHER HAD ALREADY LEFT THE BUNGLOW AND SETTLE D DOWN AT KANPUR WHILE THE ELDEST BROTHER WAS LIVING SEPARATE LY IN THE SAME BUNGLOW, EVEN DURING HIS FATHERS LIFE TIME. H OWEVER, AS NO CONFIRMATION OF THE BROTHERS TO THAT EFFECT HAS BEEN BROUGHT ON RECORD; THEREFORE, THIS EXPLANATION OFFERED BY T HE APPELLANT IS NOT FULLY ACCEPTABLE. IN NORMAL PREPONDERANCE; H OUSEHOLD GOODS ARE LIKELY TO BE SHARED BETWEEN TWO BROTHERS, WHO WERE OCCUPYING TWO SEPARATE PORTIONS OF THE HOUSE. 7.3 (D) TAKING INTO ACCOUNT THE ENTIRE SEQUENCES OF DEVELOPMENT, THE NATURE OF DETAILS AND EVIDENCES PL ACED ON RECORD AND SUBMISSION OFFERED IN RESPECT OF FAMILY ARRANGEMENTS; I THINK IT PROPER TOP TREAT CASH RECE IPTS TO THE EXTENT OF HALF OF CLAIM, I.E. TO THE EXTENT OF AROU ND RS.4,46,050% AS EXPLAINED WHILE REMAINING PORTIONED I.E. RS.4,46 ,050/- AS UNEXPLAINED. 13. ON CAREFUL PERUSAL OF THE ABOVE ORDER, WE HOLD THAT THE CIT (A) RIGHTLY DECIDED THAT THE SALE OF HOUSE HOLD EXPENDITURE WAS GENUINE AND SUPPORTED BY VOUCHERS AND CONFIRMATIONS AND IT WAS ALSO ACCEP TED THAT THE ANCESTRAL ITA NO.6013/DEL/2010 & 67/DEL/2011 8 HOUSE HAS BEEN SOLD FOR WHICH CAPITAL GAIN HAS BEEN OFFERED IN THE NEXT YEAR. THE CIT (A) CURTAILED PART RELIEF BY HOLDING THAT T HE ASSESSSEES FATHER HAS EXPIRED EARLIER AND SALE PROCEEDS RECEIVED FROM SAL E OF HOUSE HOLD ITEMS SHOULD HAVE BEEN DISTRIBUTED IN THE HANDS OF THREE BROTHERS. AT THIS STAGE, THE LD. COUNSEL FOR THE ASSESSEE POINTED OUT LETTER OF THE ASSESSEE SUBMITTED TO CIT (A) AVAILABLE ON PAGE NO.23 OF PAPER BOOK, VOLU ME 3 WHEREIN IT HAS BEEN STATED THAT THE SALE RECORDED IN THE CAPITAL A CCOUNT OF THE ASSESSEE PERTAINS TO SELF ACQUIRED ITEMS AND FIXTURES AND AP PURTENANCES AND ARTE-FACTS WHICH WERE PART OF THAT PORTION WHICH WAS IN THE CU STODY AND OCCUPATION OF THE ASSESSEE. THE COUNSEL OF ASSESSEE SUBMITTED THA T WHEN OTHER TWO BROTHERS OF THE ASSESSEE GOT SEPARATED AND AFTER TH E DEATH OF ASSESSEES FATHER AND HIS MOTHER STAYED WITH HIM DURING HER LIFETIME IN THIS SITUATION WHEN THE HOUSE HOLD ITEMS SOLD WERE MAINLY SELF ACQUIRED BY THE ASSESSEE THEN THERE WAS NO QUESTION OF SHARING OF THE RECEIPTS WITH OTH ER BROTHER. THE DEPARTMENTAL REPRESENTATIVE CONTENDED THAT THE ASSE SSEE HAS NO EXCLUSIVE RIGHT OVER THE SALE PROCEED RECEIVED FROM SALE OF A NCESTRAL HOUSE HOLD ITEMS THEREFORE THE CIT (A) RIGHTLY CURTAILED THE RELIEF TO THE ASSESSEE. 14. AS PER DISCUSSIONS MADE HEREINABOVE AND ON A GL ANCE ON THE ASSESSMENT ORDER AS WELL AS APPELLATE ORDER, WE OBS ERVE THAT THE REVENUE AUTHORITIES HAS NOT DISPUTED GENUINENESS OF SALE OF HOUSE HOLD ITEMS AND THE ITA NO.6013/DEL/2010 & 67/DEL/2011 9 FACT THAT THE AMOUNT PERTAINING TO THE SALE HAS BEE N DEPOSITED TO THE BANK ACCOUNT OF THE ASSESSEE. WE ALSO OBSERVE THAT THE A SSESSEE IS REPEATEDLY SUBMITTING THAT THE HOUSEHOLD ITEMS SOLD WAS ANCEST RAL AS WELL AS SELF ACQUIRED AND OTHER TWO BROTHERS WERE SEPARATELY LIV ING AND THE FATHER AND MOTHER OF THE ASSESSEE LIVED WITH THE ASSESSEE DURI NG THEIR ENTRIES LIFETIME AND HOUSE HOLD ITEMS WERE SOLD BY THE ASSESSEE DURI NG THE YEAR UNDER CONSIDERATION. IN THE SITUATION THE CIT (A) RIGHTLY GRANTED RELIEF TO THE ASSESSEE BUT WE ARE UNABLE TO ACCEPT REASONING OF T HE CIT (A) WHICH CURTAILED THE HALF RELIEF TO THE ASSESSEE BY HOLDIN G THAT IN ABSENCE OF CONFIRMATION FROM THE BROTHERS THE EXPLANATION OFFE RED BY THE APPELLANT IS NOT ACCEPTED. IN THIS REGARD, WE ARE OF THE CONSIDE RED VIEW THAT WHEN THE ASSESSEE IS SELLING HOUSEHOLD ITEMS AND THE ANCESTR AL HOUSE WAS ALSO SOLD AND THE RESPECTIVE BENEFICIARY OFFERED CAPITAL GAIN FOR TAX IN THE NEXT ASSESSMENT YEAR AND ALSO WHEN THE ASSESSEE IS SELLING HOUSEHOL D ITEMS INCLUDING ANCESTRAL AND SELF ACQUIRED ITEMS AND HE IS DEPOSIT ING SALE PROCEED TO HIS BANK ACCOUNT AND NO BROTHER IS COMING FORWARD TO TA KE OR CLAIM SHARE IN THIS PROCEED THEN REVENUE AUTHORITIES CANNOT COMPEL THE ASSESSEE TO SHARE A PART OF SALE PROCEED, RECEIVED FROM SALE OF HOUSEHOLD IT EMS, WITH OTHER BROTHERS. UNDER THESE OBSERVATIONS AS MENTIONED HEREINABOVE W E ARE OF THE VIEW THAT ITA NO.6013/DEL/2010 & 67/DEL/2011 10 THE ASSESSING OFFICER MADE DISALLOWANCE AND ADDITIO N PERTAINING TO THE AMOUNT OF SALE PROCEED OF HOUSEHOLD ITEMS ON WRONG PREMISE. 15. ON THE OTHER HAND, THE CIT (A) RIGHTLY OBSERVED THAT THE SALE OF HOUSEHOLD ITEMS WAS GENUINE AND THE AMOUNT OF SALE PROCEED REFLECTED IN THE BANK PASS BOOK VIS--VIS ACCOUNTS OF THE ASSESSEE. SINCE THE ASSESSEE LIVE WITH HIS FATHER AND MOTHER UP TO THEIR LIFE TIME AN D SOLD ITEMS WERE ANCESTRAL AS WELL AS SELF ACQUIRED THEN THE ASSESSEE CANNOT B E COMPELLED TO SHARE SALE PROCEED WITH OTHER BROTHER WHO ARE NOT COMING FORWA RD TO TAKE SHARE. THEREFORE, THE CIT (A) WRONGLY CURTAILED THE RELIEF IN THIS REGARD. ACCORDINGLY, WE DIRECT THE ASSESSING OFFICER TO GRA NT RELIEF ABOUT ENTIRE AMOUNT OF RECEIPT OF SALE OF HOUSE HOLD ITEMS REFLE CTED IN THE BOOKS OF ACCOUNTS AS WELL AS BANK ACCOUNT OF THE ASSESSEE. A CCORDINGLY GROUND NO.2 OF THE REVENUE IS DISMISSED AND GROUND NO.2 AND 3 O F ASSESSEE ARE ALLOWED. GROUND NO.4 OF THE ASSESSEE. 16. APROPOS GROUND NO.4, THE LD. COUNSEL OF THE ASS ESSEE SUBMITTED THAT THE AMOUNT OF 4 LACS WAS RECEIVED AS AN ADVANCE FRO M SEDCO AND THE SAME WAS INCLUDED IN THE GROSS RECEIPT FOR THE NEXT YEAR HENCE THIS AMOUNT CANNOT BE TAXED DURING THE YEAR UNDER CONSIDERATION. THE C OUNSEL DRAWN OUR ATTENTION TOWARDS PAGE NO.31 OF PAPER BOOK VOLUME 2 OF THE ASSESSEE AND SUBMITTED THAT THE AMOUNT WAS RECEIVED FROM ASSESSE ES CLIENT SEDCO AS ITA NO.6013/DEL/2010 & 67/DEL/2011 11 ADVANCE FOR EXPENSES WHICH COULD NOT BE UTILIZED DU RING THE YEAR UNDER CONSIDERATION AND THE SAME WAS CARRIED FORWARD AS A N ADVANCE IN THE NEXT YEAR AND LATER IT WAS CONVERTED INTO PROFESSIONAL F EES AND OFFERED TO TAX DURING THE NEXT ASSESSMENT YEAR. THE COUNSEL OF THE ASSESSEE PLACED RELIANCE ON THE JUDGMENT OF THE HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. DINESH KUMAR GOEL (2011) REPORTED IN 331 ITR 10 (DE L) AND JUDGMENT OF ITAT, A BENCH, NEW DELHI DATED 20.09.2013 IN ITA NO.738/DEL/2013 FOR THE ASSESSMENT YEAR-2009-10 IN THE CASE OF DCIT VS. SHRI ARVINDER SINGH SOIN. THE COUNSEL ALSO CONTENDED THAT THE RATE OF TAX W AS SAME DURING THE A.Y. UNDER CONSIDERATION AS WELL AS DURING NEXT YEA R THEREFORE, THERE WAS NO ADVERSE IMPACT ON THE REVENUE. 17. REPLYING TO THE ABOVE, THE LD. DEPARTMENTAL REP RESENTATIVE (DR) SUBMITTED THAT IN THE CASE OF OF CIT VS. DINESH KU MAR GOEL (SUPRA) THE ASSESSEE FOLLOWED MERCANTILE SYSTEM OF ACCOUNTING T HEREFORE, INCOME WAS NOT THE RECOGNIZED UNLESS SERVICE IS RENDERED BY TH E ASSESSEE BUT IN THE PRESENT CASE THE ASSESSEE IS FOLLOWING CASH SYSTEM OF ACCOUNTING, THEREFORE, THE RECEIPTS OF FEES WOULD BE TAXABLE IN THE YEAR O F RECEIPT. THE DEPARTMENTAL REPRESENTATIVE FURTHER CONTENDED THAT AS PER OF PAGE NO.31 OF VOLUME 2 OF THE ASSESSEE, THE TDS HAS BEEN DEDUCTED ON RECEIPTS AND THE TDS THEREON HAS BEEN CLAIMED BY THE ASSESSEE IN THE YEAR UNDER ITA NO.6013/DEL/2010 & 67/DEL/2011 12 CONSIDERATION, THEREFORE, THE CIT (A) RIGHTLY DISAL LOWED THE CLAIM OF THE ASSESSEE IN THIS REGARD. THE DEPARTMENTAL REPRESENT ATIVE ALSO POINTED OUT THAT RATIO OF THE JUDGMENT OF THE ITAT DELHI A BE NCH IN THE CASE OF DCIT VS. SHRI ARVINDER SINGH SOIN (SUPRA) IS ALSO NOT AVAILABLE FOR THE ASSESSEE BECAUSE IN THIS CASE THE ASSESSEE COULD SUBSTANTIAT E THE FACT THAT THE ENTIRE RECEIPT WAS NOT TAXABLE DURING THE YEAR UNDER CONSI DERATION IN THAT CASE BECAUSE THE ASSESSEE BOOKED AMOUNT OF RECEIPT AS IN COME AT THE TIME OF ACCRUAL OF INCOME BY THE ASSESSEE I.E. AS AND WHEN THE ACTUAL CONSULTATION WITH THE DOCTOR ASSESSEE WAS TAKEN PLACE. THE DEPAR TMENTAL REPRESENTATIVE VEHEMENTLY CONTENDED THAT IN THE PRESENT CASE THE A SSESSEE HAS NOT GIVEN ANY DETAIL IN THIS REGARD THAT THE ADVANCE WAS RECEIVED PERTAINING TO A PARTICULAR CASE WHICH WAS PREPARED OR ARGUED LATER IN THE SUBS EQUENT YEAR. THE DEPARTMENTAL REPRESENTATIVE VEHEMENTLY CONTENDED TH AT THE ASSESSEE COULD HAVE SUBMITTED VERIFICATION AND CONFIRMATION FROM H IS CLIENT (THE PAYER) THAT THE AMOUNT WAS GIVEN AS AN ADVANCE AND THE SAME WAS ALLOWED TO BE CONVERTED INTO PROFESSIONS FEES DURING NEXT YEAR BU T THE ASSESSEE WAS NOT BOTHERED TO SUBMIT OR FULFILL THIS REQUIREMENT. THE DEPARTMENTAL REPRESENTATIVE SUPPORTED THE ORDER AS THE AUTHORITI ES BELOW. 18. THE ASSESSEES MAIN CONTENTION IS THAT THIS AMO UNT WAS RECEIVED AS AN ADVANCE OF REIMBURSEMENT OF EXPENSES AND CARRIED FO RWARD TO THE NEXT YEAR ITA NO.6013/DEL/2010 & 67/DEL/2011 13 BECAUSE IT COULD NOT BE USED DURING THE YEAR UNDER CONSIDERATION. THE ASSESSEE ALSO EXPLAINED THAT THIS AMOUNT WAS CONVER TED INTO FEES RECEIVED AND OFFERED TO TAX DURING THE NEXT YEAR. THE LD. CO UNSEL OF THE ASSESSEE ALSO SUBMITTED THAT IF ASSESSING OFFICER HAD ASKED FOR C ONFIRMATION FROM PAYER (THE SEDCO) THEN THE ASSESSEE WAS READY AND WILLING TO FURNISH THE CONFIRMATION AND VERIFICATION FROM HIS CLIENT I.E. THE SEDCO. 19. AS PER FINDINGS OF THE CIT (A) THE AMOUNT OF RS .4 LACS WAS GIVEN AS ADVANCE BY SEDCO FOR WORKS TO BE PERFORMED IN RESPE CT OF CERTAIN COURT CASES THEN THIS AMOUNT BY THE NATURE OF EXPLANATION AND METHOD OF ACCOUNTING ITSELF BECOMES THE INCOME OF THE FINANCI AL YEAR DURING WHICH THE SAME WAS RECEIVED. 20. ON CAREFUL CONSIDERATION OF RIVAL SUBMISSIONS O F BOTH THE PARTIES AND PERUSAL OF RECORDS PLACED BEFORE US WE OBSERVE THAT THE ASSESSEE TREATED RS.4 LACS AS ADVANCE FROM SEDCO WHICH WAS RECEIVED ON 11 .10.2005 AND AS PER SUBMISSIONS OF THE ASSESSEE THE ADVANCE COULD NOT B E UTILIZED DURING RELEVANT FINANCIAL YEAR THEN THE SAME AMOUNT WAS CARRIED FOR WARD TO THE NEXT YEAR I.E. A. Y.2007-08. IT HAS ALSO STATED ON BEHALF OF THE A SSESSEE THAT SUBSEQUENTLY, DURING THE NEXT F. Y. THE ADVANCE WAS CONVERTED INT O PROFESSIONAL FEES AND THE SAME WAS OFFERED FOR TAXATION DURING A. Y. 2007 -08. THE DEPARTMENTAL REPRESENTATIVE AND THE REVENUE AUTHORITIES HAVE NOT DISPUTED THIS FACT THAT ITA NO.6013/DEL/2010 & 67/DEL/2011 14 INITIALLY THE AMOUNT WAS RECEIVED ON 11.10.2005 AND THE SAME AMOUNT WAS OFFERED TO TAX DURING NEXT YEAR. 21. IN VIEW OF THE ABOVE, WE ARE OF THE CONSIDERED OPINION THAT AS PER ENTRIES RECORDED IN THE BOOKS OF ACCOUNTS OF THE AS SESSEE AMOUNT OF RS.4 LACS RECEIVED BY THE ASSESSEE FROM HIS CLIENT SEDCO WAS INITIALLY TREATED AS AN ADVANCE WHICH WAS CARRIED FORWARD TO NEXT YEAR AS U NUSED AMOUNT OF ADVANCE AND THE SAME AMOUNT WAS TREATED AND ACCEPTE D AS FEES DURING THE NEXT YEAR AND ALSO OFFERED TO TAX. ALTHOUGH THE AUT HORITIES BELOW HAS REJECTED THE CONTENTIONS AND EXPLANATION OF THE ASSESSEE BUT THE PAYER I.E. SEDCO, THE CLIENT OF THE ASSESSEE, IS COMPETENT ENTITY TO VERIFY THE FACT THAT THE DISPUTED AMOUNT WAS ADVANCE AT THE TIME OF PAYMENT AND THE SAME WAS CARRIED FORWARD TO NEXT YEAR AS AN UTILIZED ACCOUNT OF ADVANCE. THE SEDCO IS ALSO COMPETENT TO CONFIRM THE FACT THAT THE AMOU NT GIVEN AS ADVANCE WAS ALLOWED TO BE CONVERTED IN TO PROFESSIONAL FEES AND THE ASSESSEE WAS ALLOWED TO OWN IT AS PROFESSIONAL FEES DURING THE NEXT YEAR OUT OF BROUGHT FORWARD ADVANCE AMOUNT. ON THE BASIS OF FOREGOING DISCUSSIO NS WE ARE OF THE OPINION THAT THE ISSUE NEEDS PROPER VERIFICATION AND ADJUDI CATION AT THE END OF THE AO TO VERIFY THE FACT FROM PAYER THAT THE AMOUNT SO GI VEN TO THE ASSESSEE WAS AN ADVANCE OR FEES FOR FINANCIAL YEAR 2005-06 IN THE H ANDS OF THE ASSESSEE. ACCORDINGLY, THE ONLY ISSUE PERTAINING TO RECEIPT O F RS.4 LACS IS RESTORED TO ITA NO.6013/DEL/2010 & 67/DEL/2011 15 THE FILE OF THE ASSESSING OFFICER. THE ASSESSING OF FICER IS DIRECTED TO ADJUDICATE THE ISSUE DENOVO AFTER AFFORDING DUE OPP ORTUNITY OF HEARING TO THE ASSESSEE WITHOUT BEING PREJUDICED. FROM OUR OBSERVA TIONS IN THIS ORDER AS WELL AS IN THE ASSESSMENT AND IMPUGNED ORDER. THUS, GROUND NO.4 OF THE ASSESSEE IS DISPOSED OF AS ABOVE AND DEEMED TO BE T REATED AS ALLOWED FOR THE STATISTICAL PURPOSES. 22. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISS ED AND APPEAL OF THE ASSESSEE IS ALLOWED ON GROUND NO.2 AND 3 AND MAY BE TREATED AS ALLOWED FOR STATISTICAL PURPOSES. ON GROUND NO. 4. ORDER PRONOUNCED IN OPEN COURT ON 29 TH /11/ 2013. SD/- SD/- (G. D. AGRAWAL) (C. M. GARG) VICE PRESIDENT JUDICIAL MEMBER DATED THE 29 TH DAY OF NOVEMBER, 2013 S.SINHA COPY FORWARDED TO 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. CIT(ITAT), NEW DELHI. AR,ITAT NEW DELHI.