Tribunal allows appeal for fresh verification of income tax declaration in A.Y. 2010-11

The Tribunal allowed the appeal for statistical purposes, directing the appellant to provide details of events before SEBI with confirmations from parties for fresh verification by the Assessing Officer. The AO was instructed to verify if the same income was declared for tax in A.Y. 2010-11 and proceed accordingly. The order was pronounced on 6th June 2014.

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Issues:
Appeal against CIT(A) order upholding addition of advance received before professional work commencement for A.Y. 2007-08.

Analysis:
The appellant, a Legal Consultancy Services provider, contested the addition of Rs. 12 lakhs received as advance before starting professional work. The Assessing Officer (AO) noted advance receipts but found no receipts/bills produced. AO believed no client would pay an advance without work done. CIT(A) upheld the addition as business receipts after considering submissions and a remand report. Appellant argued that the advance was for work done in A.Y. 2010-11, shown as income then and assessed accordingly. The Departmental Representative supported lower authorities' findings.

The Tribunal observed the AO did not consider chronological events and added the amount based on a presumption. Considering this, the issue required reassessment at the assessment level. The Tribunal directed the appellant to provide details of events before SEBI with confirmations from parties for AO's fresh verification. Additionally, the AO was instructed to verify if the same income was offered for tax in A.Y. 2010-11 and act accordingly. The appeal was allowed for statistical purposes, and the order was pronounced on 6th June 2014.

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