CORPORATE LAW CHAMBERS INDIA Vs. THE DCIT
INCOME TAX APPELLATE TRIBUNAL
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N.K.Billaiya, Member (A) -
(1.) THIS appeal by the assessee is preferred against the order of the Ld. CIT(A) -26, Mumbai dt. 16.11.2012 pertaining to A.Y. 2007 -08.
(2.) THE sole grievance of the assessee is that the Ld. CIT(A) erred in upholding the addition of Rs. 12 lakhs being advance received before commencement of professional work. The assessee is in the business of Legal Consultancy Services following mercantile system of accounting. For the year under consideration, the return of income was filed on 29.2.2008 declaring total income at Rs. 65,04,000/ -. The return was selected for scrutiny assessment and statutory notices were issued and served upon the assessee.
(3.) DURING the course of the assessment proceedings, the Assessing Officer observed that the assessee has received advances from five parties totaling to Rs. 12 lakhs. The assessee claimed that the fees were paid in advance for future consultancy. It was further explained that if the assessee decided not to take up the matter of the 5 parties, the said advance will be refunded. The assessee was to represent before the SEBI in relation to some IPO Scam. The AO was of the opinion that no receipt/bill for Rs. 12 lakhs has been produced. The AO was of the firm belief that no client will pay advance to the Advocate unless some work has been done by the Advocate. No correspondence from these parties was produced, the AO went on to treat Rs. 12 lakhs as receipt for the year under consideration.;
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