2001 (1) TMI 48

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.... J.-Pursuant to the direction given by this court, the following question has been referred for the opinion of this court under section 256(2) of the Income-tax Act, 1961 (in short, "the Act"), by the Income-tax Appellate Tribunal, Delhi Bench "E", New Delhi (in short, "the Tribunal") : "Whether, on the facts and in the circumstances of the case, the Tribunal was correct in law in holding that ....

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....n terms of clause 5, the assessee obtained payment of Rs. 4,50,000 in two instalments on November 9, 1970, and December 19, 1970, respectively. The assessee treated the said amounts as advance in the balance-sheet and brought to the credit of the profit and loss account a sum of Rs. 1,74,300. The said amount was stated to be relatable to the work-in-progress valued on the basis of booked time reco....

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....on with the appeal for the preceding year. For the year under consideration against fees of Rs. 1,74,300 the assessee charged to the accounts a total amount of Rs. 1,24,231 as direct expenses on jobs undertaken. The Income-tax Officer held that since the payment had been received on completion of jobs mentioned as stage I and stage 11 of the contract, to that extent, professional fees had accrued ....

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....noted that the letters of the principals clearly established that a sum of Rs. 4,50,000 was given to the assessee as advance. For the assessment year 1973-74, the assessee had treated similar receipts in the manner as done for the year under consideration and by order dated March 29, 1976, the Assessing Officer accepted the assessee's method. That being the position, the Appellate Assistant Commis....