1998 (3) TMI 162

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....unts of advance received from the clients are credited in the clients' account, and according to the assessee they do not constitute his income as the income is accounted for when the case is completed. This plea of the assessee was rejected by the AO. On appeal the CIT(A) following the three judgments referred to in para 2.1 of his order deleted the addition. 3. We have heard both the parties. It is now well-settled that the money received from the clients is held by an advocate in fiduciary capacity in the nature of a trust and does not belong to the advocate. It has been so held by the Hon'ble Gujarat High Court in the case of CIT vs. D.C. Gandhi (1994) 117 CTR (Guj) 31 : (1994) 210 ITR 929 (Guj). A similar issue has been decided by t....

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...., CIT vs. Sandersons & Morgans (1970) 75 ITR 433 (Cal), and the judgment of Supreme Court in the case of CIT vs. T.V. Sundaram Iyengar (1996) 136 CTR (SC) 444 : (1996) 222 ITR 344 (SC). K.K. Kanwat, the learned Departmental Representative relied upon the orders of the authorities below. 7. We have considered the rival submissions and perused the facts on record. In CIT vs. T.D. Desai the question of law referred in that case to the High Court was as under: "Whether, on the facts and in the circumstances of the case, the interest accruing on the fixed deposits with chartered bank was income liable to be assessed as the assessee's income for the respective asst. yrs. 1956-57, 1957-58 and 1958-59 and 1959-60?" The Hon'ble Bombay High ....

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.... of the case the solicitor was not authorised to keep the interest either by custom or by implied agreement, although, as a matter of fact, a similar practice had long been followed by a number of solicitors in the United Kingdom. As seen earlier, the relevant rules of this High Court do not permit a solicitor to treat the moneys received by him from or on account of his clients as his personal moneys and such moneys are held by him in a fiduciary capacity. Even the income received from such moneys must equally be held by the solicitor in a fiduciary capacity. What the solicitor actually does with the income, i.e., whether he appropriates it to himself or not, is, in our opinion, a matter of no consequence. If he appropriates it to himself,....