2016 (5) TMI 792 - HC - Income Tax

Tribunal decision upheld in appeal challenging professional receipts addition. Advocate's explanation accepted.

The High Court upheld the Tribunal's decision to dismiss the appeal challenging the addition of professional receipts amounting to Rs. 47,37,000 due to ... Addition on account of non-conciliation of professional receipts with TDS certificates - Held that:- Tribunal considered this submission of both sides and found that the assessee was engaged as an Advocate to argue the matters by what is popularly known as Advocates on record or instructing Advocates method, meaning thereby the client does not engage the assessee directly but a professional or the Advocate engaged by the client requests the assessee to argue the case. The brief is then taken as the counsel brief. That being the practice, the assessee gave an explanation that the breakup as desired cannot be given and with regard to all payments. It is pointed out that at times, assessee receives fees directly from the clients or from the instructing Advocates or Chartered Accountants if such professionals have collected the amounts from the clients. Under these circumstances, the breakup as desired cannot be placed on record. An explanation which has been given by the assessee and accepted in the past has been now accepted by the Tribunal once again. Since it is accepted for the Assessment Year 2006-07, in the peculiar facts, in relation to the present assessee, we are of the view that this Appeal does not deserve to be entertained. It does not give rise to any substantial question of law. Issues:1. Addition of professional receipts on account of nonconciliation with TDS certificates.Analysis:The High Court, comprising S.C. Dharmadhikari and G.S. Kulkarni, JJ., considered the appeal challenging the addition of professional receipts amounting to Rs. 47,37,000 made by the Assessing Officer due to nonconciliation with TDS certificates. The Tribunal found that the assessee, working as an Advocate, followed the practice of being engaged by instructing Advocates or professionals representing the clients. The Tribunal accepted the explanation provided by the assessee that it was not feasible to provide the desired breakup of receipts due to the nature of the practice, where fees were received directly from clients or through instructing Advocates or Chartered Accountants. This explanation, previously accepted for the Assessment Year 2006-07, was upheld by the Tribunal once again. Consequently, the High Court held that the appeal did not raise any substantial question of law and dismissed it accordingly. The Tribunal's decision was upheld, emphasizing the peculiar facts of the case and the accepted practice in the legal profession.