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2013 (9) TMI 482 - AT - Income TaxTaxability of amount received after closure of business / profession - Discontinued business u/s 176 - addition on account of receipt of arrears of professional fees - Discontinuation from legal profession - CIT deleted disallowance - whether the CIT (A) has rightly allowed the claim of the assessee for exemption from tax, the receipt of arrears of his professional fees, such arrears having been received by the assessee after his elevation as High Court Judge - Held that:- before his elevation as a Judge, assessee was carrying on legal profession as an advocate, arrears of professional receipts received after discontinuation of legal profession were not assessable in his hands after he has discontinued his legal profession. Even in spite of introduction of Section 176 (4) in the Act, the receipts in question cannot be treated as the assessee's income falling under the head "Profits and Gains of Business, Profession or Vocation", even though they were, being the fruits of the assessee's professional activities, the profits and gains of a profession, under the very same head of "Profits and Gains of Business, Profession or Vocation - It is due to the absence of any legislative provision that these receipts cannot be treated as business income falling under the head "Profits and Gains of Business, Profession or Vocation" carried on by the assessee during the relevant year. They cannot be included in the total income of the assessee, even though the amount was received by the assessee before the discontinuance of his profession due to his elevation as High Court Judge - Following decision of Commissioner of Income Tax v. Justice R.M. Datta [1989 (7) TMI 59 - CALCUTTA High Court] and Nalinikant Ambalal Mody. Versus S. A. L. Narayan Row, Commissioner Of Income-Tax, Bombay City I. [1966 (5) TMI 13 - SUPREME Court] - Decided against Revenue. Disallowance of expenses - Expenditure on printing and stationery, conveyance, telephone and accounting, etc. - Held that:- since the gross receipts are not liable to tax, the expenditure incurred for recovery of outstanding fees and for maintaining books of account cannot be disallowed and no such disallowance was called for - Decided against Revenue.
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