ITAT decision: Cash credit, professional receipts. AO to assess accrual per mercantile accounting. Appeal partly allowed.

The ITAT set aside the CIT's order on the issues of cash credit and Mumbai Training Institute receipts. Regarding professional receipts, the ITAT directed the AO to determine if the amount accrued in the relevant assessment year, following the mercantile accounting system. The assessee's appeal was partly allowed for statistical purposes.

---

---

Issues involved: Appeal against order of CIT-IV, Hyderabad u/s 263 for AY 2005-06.

Professional receipts: CIT directed AO to tax professional receipts of Rs. 7,36,555. Assessee claimed amount belonged to next assessment year, supported by course details. CIT rejected explanation, ordered tax. Assessee argued CIT exceeded jurisdiction as issue not in original notice. Cited precedent, ITAT held CIT must confine to issues in notice. Order set aside.

Cash credit: CIT questioned Rs. 20 lakhs debit entry, asked for evidence of loan. Assessee failed to provide immediate proof, later produced letter. CIT found lack of evidence, directed AO to tax if unsatisfied. Assessee contended issue not in original notice, jurisdiction exceeded. Citing precedent, ITAT held proceedings must stick to notice. Order set aside.

Mumbai Training Institute receipts: CIT noted no receipts shown from Mumbai Training Centre, directed AO to tax if any found. Assessee appealed against CIT's order.

Conclusion: ITAT set aside CIT's order on cash credit and Mumbai Training Institute receipts issues. Regarding professional receipts, ITAT directed AO to examine if Rs. 7,36,555 accrued in AY 2005-06, following mercantile accounting system. Assessee's appeal partly allowed for statistical purposes.

---