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2019 (8) TMI 182

..... ed amount in assessment year under appeal - HELD THAT:- Assessee has paid advance tax on the amount in question in AY 2020-21 and undertaken to declare the amount for taxation, Revenue is not going to lose anything. It is merely a tax neutral exercise. Therefore, do not find any justification to doubt the explanation of the assessee. In this view of the matter, set aside the orders of the authorities below and delete the addition of ₹ 8,70,000/-. - ITA.No.5097/Del./2018 - 1-8-2019 - Shri Bhavnesh Saini, Judicial Member For the Assessee : Shri V. Raja Kumar, Advocate For the Revenue : Shri S.L. Anuragi, Sr. DR ORDER This appeal by assessee has been directed against the order of Ld. CIT(Appeals)-20, New Delhi dated 14.03.2018 for AY 201 .....

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..... taxes have been paid. The AO in this background noted that there is a cash deposited in State Bank of India of ₹ 8,50,000/- which assessee claimed to be advanced consultation fees, which was deposited in the bank account. The assessee received the advance fees from Shri Pramod Sharma, Ms. Aarti Jain, Ms. Nimisha Bhagat and Ms. Asha Devi totaling to ₹ 8,70,000/-. The AO noted that the assessee being Advocate has maintained his accounts on cash basis, therefore, the consultancy charges received in financial year relevant to assessment year should have been disclosed in the return of income. In the balance sheet ending 31.03.2014 no such advances reflected. The AO also noted that in the legal profession fees is also received in adv .....

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..... e tax on such advance receipts, copies of the same are filed on record. He has submitted that assessee would disclose ₹ 8,70,000/- as income in AY 2020-21 and, as such, it is only a tax neutral exercise. On the other hand, Ld. DR relied upon the orders of the authorities below. 6. I have considered the rival submissions. The assessee has filed copy of the statement of affair in which advance fees have been shown in a sum of ₹ 8,50,000/-. According to assessee the advance fees was received from four parties and their matters are now settled in current financial year. Assessee, therefore, made a statement in the court that amount in question i.e. ₹ 8,70,000/- would be tendered for taxation in AY 2020-21. The assessee has als .....

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..... t the impugned method of accounting adopted by the assessee results in under estimation of profits, for changing the method of accounting u/s 145 of the Act, otherwise, it will be presumed that the entire exercise is Revenue neutral . Considering the facts of the case and that assessee has paid advance tax on the amount in question in AY 2020-21 and undertaken to declare the amount for taxation, I am of the view that Revenue is not going to lose anything. It is merely a tax neutral exercise. I, therefore, do not find any justification to doubt the explanation of the assessee. In this view of the matter, I set aside the orders of the authorities below and delete the addition of ₹ 8,70,000/-. 7. In the result, the appeal of assessee is .....

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