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Issues involved:
1. Deletion of addition made by AO in respect of advances received from clients. 2. Deletion of disallowances from travelling expenses and business promotion expenses. Deletion of addition made by AO in respect of advances received from clients: The assessee, a partnership firm of advocates, filed a return of income declaring total income. The AO added an amount in respect of advances received from clients, stating it was professional charges received in advance. The CIT(A) deleted the addition, considering that the advance does not become income until services are rendered. The Departmental Representative argued that the advances became the common fund of the profession due to lack of separate bank account. However, the Tribunal found that the impugned amount was adjusted as income in a subsequent year, preventing double taxation. Various case laws cited were deemed distinguishable. The Tribunal dismissed the appeal, citing a relevant decision and lack of evidence showing the advances as income. Deletion of disallowances from travelling expenses and business promotion expenses: The AO disallowed a lump sum from travelling expenses and business promotion expenses, suspecting personal use. The CIT(A) found the disallowances were made without basis and deleted them. The Departmental Representative argued that personal use could not be ruled out. The Tribunal upheld the disallowance of &8377; 25,000 for payments made to hotels and restaurants, as they likely included personal expenses. The appeal was partly allowed.
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