Case Law Details
Issue- In the facts and circumstances of the case, the Ld. CIT(A) erred in deleting the addition made by AO on account of arrear of professional fees of Rs. 67,86,669/- received by the assessee after he had discontinued his legal profession not appreciating the fact that the Hon’ble Supreme Court in the case of Nalinikant Ambalal Modi Vs. SAL Narayan Rao (61 ITR 428) had decided the appeal in favor of the assessee as per the earlier Income-tax Act, 1922 in which specific provision for taxation of such receipt was not available unlike provision of section 176(4) of Income-tax Act, 1961, where such receipts are specifically taxable.
Held :- Since the assessee did not carry on any profession in the relevant previous year, the receipt cannot be taxed u/s 28 of the Act, since Section 176 (4) does not contain any deeming provision treating such receipt as income falling under the head “Profits and Gains of Business, Profession or Vocation” and also, it cannot be taxed as income from other sources u/s 56 of the Act.
INCOME TAX APPELLATE TRIBUNAL, DELHI
BEFORE SHRI G.D. AGRAWAL, HON’BLE VICE PRESIDENT
AND SHRI A.D. JAIN, JUDICIAL MEMBER
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