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TMI Blog2013 (10) TMI 1071X X X X Extracts X X X X X X X X Extracts X X X X ..... nts as 'Lifetime Consultancy Charges' since, the assessee has failed to provide proper justification or necessary documentary evidences inspite of several opportunities given by the A.O. 2. In the facts and circumstances of the case the ld.CIT(A) grossly erred in deleting the addition made by the A.O. of Rs. 69,29,500/- on account of advance received from patients as 'Lifetime Consultancy Charges' since, the assessee has not provided proper explanation how the above income is offered for taxation in subsequent year. 3. In the facts and circumstances of the case the ld.CIT(A) grossly erred in deleting the addition made by the A.O. of Rs. 69,29,500/- on account of advance received from patients as 'Lifetime Consultancy Charges' since, the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eived from them has been adjusted against the professional services rendered in the subsequent years and the income has been offered by the assessee as and when the services have been rendered. The assessee has furnished the complete details in respect of each and every patient. He further submitted that the assessee is following mercantile system of accounting but, even in mercantile system of accounting, the advance received from the patients cannot be treated as income. The income would accrue only when the services would be rendered by the assessee. 5. In the rejoinder, it is stated by the learned DR that no allocation of the receipt has been made by the assessee for the year ended on 31st March, 2009 even though all the advances were ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . After 12 months only, the assessee is entitled to charge the professional fee for consultation. Therefore, obviously, as per the scheme, no income would accrue to the assessee in the first 12 months. As per the scheme, it is evident that the amount received during the year under consideration is only advance and the same is adjustable against the consultancy charges which would be payable by the patient after 12 months of the deposit as per the rate prescribed in the scheme. Admittedly, subsequently, as and when consultation has been taken by the patients, the income accrued in those years has been accounted for and offered as income. A detailed chart running from pages 43 to 73 is given in this regard. Thus, as per the scheme, the advanc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... IT(A). However, the CIT(A) has already allowed opportunity to the Assessing Officer to examine those fresh evidences and called for his remand report. After considering his remand report, the CIT(A) allowed the relief with the following finding:- "5. I have considered the issue raised in appeal, the arguments of the assessing officer and contentions of the appellant. The appellant is a doctor, surgeon specializing in liver transplant. It is a fact that the appellant is following mercantile system of accounting on a regular basis. The appellant has received life time consultancy fees which is accounted as advance from patients as per the principles of mercantile system of accounting. This is nothing but advance from patients to be utilized ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are accounted in the years of realization. Sufficient proof in the name of balance sheet and P & L account and Form 3CD to support the case of the appellant has been filed, which is enough proof to accept that what has been received as advance under the life time consultancy fee is only to be taxed as income when services to that effect are offered. Till then the amount remains a liability in the books of the appellant. Considering the details filed it is found that the advance need not be booked at the time of receipt nor it is a registration charge. The appellant has strictly followed the principles of mercantile system of accounting. Accordingly, I hold that the appellant has correctly followed the principles of mercantile system of acco ..... X X X X Extracts X X X X X X X X Extracts X X X X
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