COMMISSIONER OF INCOME TAX Vs. SANDERSON AND MORGANS

JUDGEMENT

(1.) Heard Sri Vipul Kundalia, learned senior standing counsel along with Sri Soumen Bhattacharjee, learned junior standing counsel for the appellant/Department and Sri J. P. Khaitan, learned senior counsel assisted by Sri Ananda Sen, Smt. Swapna Das and Sri Asit Kumar De, learned Advocates for the respondent/assessee.

(2.) This appeal was admitted by an order dtd. 24/8/2011 on the following substantial question of law:

(3.) Briefly stated facts of the present case are that the respondent/assessee is a very old solicitor firm. During the assessment year in question i.e., Assessment Year 2007-08, the respondent/assessee disclosed receipts from profession amounting to Rs.1,82,02,958.00. As per the TDS certificate the amount received was Rs.5,56,88,817.00. Therefore, the Assessing Officer sought explanation from the respondent/assessee for the difference of Rs.3,74,85,859.00. The assessee explained that it has been receiving advances from its clients, a portion of which was spent on behalf of the client for counsels' fees, stamp paper, court-fees stamp, payment to rent controller, bank draft in lieu of stamp duty and registration fees etc. He also gave complete details of payments made head-wise.