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Deloitte Haskins & Sells, Gurgaon vs Acit, New Delhi on 15 January, 2021

31. Ground No. 2 is with regard to advance received from clients being added as income of the assessee. We have while considering the same issue for AY 2010-11 have held that the addition cannot be sustained by placing reliance on the decision of the Delhi Bench of the Tribunal in the case of M/s Deloitte Haskins & Sells 23 ITA Nos.291, 289 & 292Mum/2024 Deloitte Haskins and Sells LLP (supra). The facts for the year under consideration are identical and therefore we hold that the AO is not correct in treating the advance amount as the income of the assessee since has not rendered services with regard to the advance received. Accordingly, we direct the AO to delete the addition made in this regard.
Income Tax Appellate Tribunal - Delhi Cites 20 - Cited by 11 - Full Document

Commissioner Of Income-Tax vs Punjab Tractors Co-Operative ... on 19 August, 1997

28. We heard the rival submissions and perused the material placed before us. The assessee-firm is a Chartered Accountants rendering professional services. As per Balance Sheet as on 31.3.2011 the advance outstanding was Rs. 64,39,989/-. The assessee contended that the amount of advances were received from clients for the services not yet rendered, therefore, the income is not accrued and accordingly, the advance cannot partake the character of income. Further, the assessee submitted that all advances cannot be held as income. In other words, the receipt resumes the character of income only when the services are rendered. The assessee is following the same method of accounting consistently for several years. The assessee placed reliance on the judgment of P& H High Court in the case of CIT vs Punjab Tractors Co-operative Multi-purpose Society Ltd, 234 ITR 10, decision of this Tribunal in S. Priyadarsan vs JCIT, 73 TTJ 738 and on identical issue in the case of associated concern of the assessee viz. A.F. Ferguson & Co., in I.T.A. No.7792/Mum/2004 dated 30.1.2008, ITAT Mumbai. In the facts and circumstances of the case, we agree with the submission of the assessee that the advance cannot be treated as income in the hands of the assessee unless the services are rendered by the assessee. The Assessing Officer has not made out a case that advances received in question were towards the services rendered by the assessee. The Id. DR also could not bring any evidence to controvert the submissions made by 20 ITA Nos.291, 289 & 292Mum/2024 Deloitte Haskins and Sells LLP the assessee. In view of the above facts and placing reliance on the decisions relied upon by the assessee cited (supra) we do not find any reason to interfere with the order of the CIT(A) and accordingly we uphold the same.
Punjab-Haryana High Court Cites 8 - Cited by 13 - A Bhan - Full Document
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