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2015 (7) TMI 785 - HC - Income TaxIncome recognition - whether monies kept invested by the Assessee in the mutual funds in the name of the Assessee had to be treated as income in his hands - Held that:- The issue of lawyers accepting monies from clients on account to defray the expenses and appropriating fees as income only upon completion of a case has been examined in the past and a consistent view has been taken by the ITAT. This has been adverted to in the impugned order of the ITAT. The principles on the basis of which those decisions were taken are unexceptionable. Given the manner and functioning of the lawyers and law firms, it is correct that the categorisation of a receipt can take place only at the time of appropriation i.e. in case of fees only when the matter is over or as when the Assessee decides on the quantum of fees. This will not be the entire advance received as at the time it is received it does not bear any particular characterisation for the purposes of treating it as income - Decided against revenue. Disallowance under Section 14A - ITAT deleted addition as AO had not recorded any finding that any expenditure incurred by the Assessee was attributable for earning the exempt income - Held that:- In order to disallow the expenditure there must be a nexus between the expenditure incurred and the income not forming part of the total income. Consequently, the disallowance under Section 14A of the Act was rightly deleted by the CIT (A) and affirmed by the ITAT.- Decided against revenue.
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