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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 ..... post surgery with a period of 12 months immediately after the surgery as free of charge, meaning there by the amount of advance would have to be exhausted with in a period of three years from surgery or else would have to be returned in case of non utilization of the same or in case of death of the patient. The appellant has done exactly the same. The appellant has accounted the said advances as and when realized. The same 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 service ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... '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 above amounts were in the nature of Registration charges which are taxable. 4. That the grounds of appeal are without prejudice to each other. 5. The appellant craves leave to a, amend or modify any/all the ground of appeal before or during the course of the appeal. It is prayed that the order of CIT(A) is contrary to the facts on record and the settled position ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 received in this year. 6. We have carefully considered the submissions of both the sides and perused the material placed before us. The facts of the case are that the assessee is a doctor by profession. He is a surgeon specialized in liver transplant. In the case of a liver transplant patient, regular consultancy and check up for several years is required. Du ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vance 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 advance received by the assessee during the year under consideration cannot be treated as professional fees of the assessee. Now, the only ground in the remand report for rejecting the scheme is the claim of the Assessing Officer that the scheme is an after-thought. The main reason for considering the scheme to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uments 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 in due course as per the scheme. On verification of the evidence given during appeal proceedings which was given to Assessing Officer also for his comments, it is found that the appellant has not utilized the amount during the year. This was booked only at the time of actual consultations with the doctor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... come 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 accounting and the amount of advance received during the year cannot be booked as income. The disallowance to that effect is directed to be deleted. Appeal is allowed." 8. After considering the facts of the case and the arguments of both the sides, we do not find any infirmity in the above finding of learn ..... X X X X Extracts X X X X X X X X Extracts X X X X
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