PRAMOD KUMAR, A.M. ORDER This is appeal filed by assessee and is directed against order dt. 11th Feb., 2002 passed by learned CIT(A) in matter of assessment under s. 143(3) r/w s. 147 of IT Act, 1961 for asst. yr. 1996-97. 2. By way of this appeal, assessee has raised following grievances : "1. grounds mentioned hereunder are without prejudice to one another. 2. learned CIT(A) erred in facts and law by not going into evidence about assessee having asked for reasons for issuing notice under s. 148 and completing assessment under s. 143(3) r/w s. 147. 3. learned CIT(A) erred in facts and law in not considering that learned AO has made fishing inquiries and has made additions by travelling beyond reasons originally recorded by him for taking recourse to s. 147. 4. learned CIT(A) has erred in retaining addition of Rs. 11,351 out of crew wages on wrong appreciation of facts. 5. learned CIT(A) has erred in sustaining addition on account of car maintenance in sum of Rs. 25,118. 6. learned CIT(A) has erred in law and facts in sustaining addition of Rs. 18,18,228 on account of social allowance. 7. learned CIT(A) has erred in sustaining disallowance under s. 80- O on wrong appreciation of facts, without considering fact that original claim was not entertained for want of certificate which was curable defect and CIT(A) should have given appropriate directions." 3 . Ground Nos. 1 to 5 were not pressed by assessee, and same are, therefore, dismissed for want of prosecution. 4 . As regards ground No. 6, relevant material facts are like this. assessee is engaged in business of supplying manpower to various shipping lines. In course of assessment proceedings, AO noticed that assessee has received sum of Rs. 18,18,228 from principals and that same is shown under head Outstanding liabilities in assessee s books of account. AO inferred this amount, which was termed as social allowance , as having been received on account of social services rendered. AO also required assessee to show cause as to why it was not disclosed in gross receipts and why should it not, therefore, be added to his income. explanation given by assessee was taken note of by AO as "the assessee has given explanation that this amount was paid to assessee b y Nomadic which is payable to crews signed off from time to time. amount in respect of social allowance is not our creation, same is payable t o organization of crew members such as union etc., and same is payable as per instructions of Nomadic." AO however, was not satisfied with this explanation. He noted that "the receipt is in view of contract between assessee and principal" and that "it is relatable to activities of assessee. Therefore, receipt is very much in nature of trading receipt/professional receipt as per ratio laid down by Hon ble Supreme Court in case of Chowringhee Sales Bureau (P) Ltd. vs. CIT 1973 CTR (SC) 44 : (1973) 87 ITR 542 (SC)". AO was of view that "there is no doubt that receipt is trading receipt/professional receipt received during course of rendering services to clients, and liability to pay same has not arisen, rather it is not determined, therefore it is certainly part of income which assessee has not shown by making dubious entry in books of account maintained by him". AO thus added amount of Rs. 18,18,228, as assessee s income. Aggrieved, assessee carried matter in appeal before CIT(A) but without any success. CIT(A) held that amount received by assessee as social allowance is taxable as his income, though assessee will be entitled to deduction in respect of any amounts paid in respect of same in year in which amounts are paid. assessee is not satisfied, and is in appeal before us. 5. We have heard rival contentions, perused material on record and duly considered factual matrix of case as also applicable legal position. We have also perused assessee s application for admission of additional evidence, affidavit dt. 3rd Nov., 2006, letter dt. 11th May, 2001 addressed by Nomadic Management AS, Norway, and also details of wages account filed before us. Having heard rival contentions of having perused material on record, we are of considered view that additional evidences filed by assessee which mainly consists of letter dt. 11th May, 2001 from Nomadic Management AS should be admitted. While AO never requisitioned details about assessee s obligation to refund money and decided matter against assessee on basis of his inferences about same, assessee could indeed have been under bona fide impression, as assessee claims that he was in, that this additional evidence could not have been produced before CIT(A) We have taken note of assessee s contention that chartered accountant appearing before CIT(A) was not well conversant with legal position, and that it was only in course of handling of matter with present tax consultant that assessee realized that he could file this additional evidence. In any event, having perused additional evidence filed by assessee, we are also satisfied that this letter is important piece of evidence which has to be taken into account in interest of justice. We have also heard learned Departmental Representative on same. In view of these discussions, we admit additional evidence filed by assessee. 6 . We consider it appropriate to reproduce letter received by assessee, from his Norway based principal, which throws light on nature of transaction in respect of which assessee was holding credit balance for his principal : "11th May, 2001 Subject : Social allowance payable to our ex-employees Reference to our telephone conversation regarding social allowance payable to ex-employees, we confirm as under : For period July, 1995 to December, 1995 we have remitted to you USD 55,276.54 to be disbursed by you on our instructions towards, social allowances in respect of crew employed on 6 vessels : MV Green Freesia, MV Green Lily, M V Green Violet, MV Green Tulip, MV Green Rose, MV Nomadic Dixie. We deducted this amount from various crew members employed on our vessels as aforesaid, initially selected by you for employment on our vessels. amount was not immediately payable to crew or their unions due to certain contradictions and assumptions. We agreed to keep amount with you to dispel your apprehension of claims arising in future (to you as our manning agent for crew), though as per agreement with you, you were only acting as agents for selection of crew for our final approval and subsequent employment. As per our, instructions in past, you have advised us of having disbursed payment as below (in Indian Rupees) To National Union of Seafarers of India (NUSI) 595,644.60 during 1996-97 To Mr. Manimaran in 6,419.00 1997-98 To 4 crew members in 1998-99 Mr. S. Sudharshan 6,000 Mr. V. Gangadharan 6,200 Mr. H.M. Kutty Kannu 5,490 Mr. K.P. Paradeepan 4,920 22,610.00 To Mr. Chavan J. 6,000.00 Laxman in 1999-2000 To 2 crew members in 2000-01 Mr. Yusuf Dawood 4,920 Amaye Mr. Yunus Ismail Taj 4,416 9,336.60 Total 640,009.60 Further, you have advised us, based on prevailing rate of exchange you have in all respect amount equivalent to Indian Rupees 1,881,228 from us. net amount with you to our credit on account of social allowance as on 31st March, 2001 is Indian Rupees 1,241,218.40, calculated as under : Gross amount remitted : 1,881,228.00 Less amount already disbursed : 640,009.60 Balance with you : 12,41,218.40 You have indicated to us that in India claims are lodged upto period of 3 years. However keeping in view that litigation by crew and its unions can take longer time, as per our experience we agreed to keep deposit with you till end of 2003. If till then there are no claims you will transfer balance of amount lying in your account in Indian Rupees, back to us, subject to necessary permissions, which will be taken by us from appropriate authorities. If there are claims against us from crew in USD we will only direct you to pay amount to extent lying with you in Indian Rupees and difference if any, for remittance will be further remitted to you. You will under no circumstances be made to suffer any loss on this account. We trust that above will clarify remittance on account of social allowance. Best regards Nomadic Management AS Sd/- Erik Thulin" 7. Learned Departmental Representative has not been able to produce any material which controverts factual aspects, or other material with regard to nature of transaction, embedded in above letter. In any event, it was all along case of assessee that money received by him from assessee is conditional receipt with corresponding obligation to account for same to principal. Not only that there was no material before any of authorities below to give findings to contrary of assessee s contentions, CIT(A) has gone to extent of holding that assessee will be entitled to deduction in year in which he actually makes payments in respect of related liabilities, as and when they so arise. There are two significant aspects of matter. First that CIT(A) proceeds on fallacy that receipt, even if it is attached with obligation to account for same to his principal, can be treated as income. It is elementary that what can be termed as income is only such receipt which comes without any corresponding obligations to us it in particular manner or to refund same. Unless gain is earned or accrued, in money or money s worth, it cannot be said to be income. In case before us, gain has not crystallized because money received by assessee, as at material point of time, was not earned or accrued by assessee. There is no material on record, save and except for inferences drawn by AO, to even suggest that assessee had right to keep balance money with him in his own right. As matter of fact, evidence filed before us shows that assessee did not have any right to keep balance, but he had obligation to refund balance to principal. Second important aspect of matter is that authorities below have clearly erred in holding that Hon ble Supreme Court s judgment in cases of Chowringhee Sales Bureau (P) Ltd. vs. CIT 1973 CTR (SC) 44 : (1973) 87 ITR 542 (SC) and Indian Molasses Co. Ltd. vs. CIT (1959) 37 ITR 66 (SC) apply on facts of present case. In case of Chowringhee Sales Bureau (P) Ltd. (supra), Hon ble Supreme Court was in seisin of situation in which while auctioneer was issuing cash memos by including amount of sales-tax, but declining to pay same to exchequer or to refund same to seller. It was contention of assessee that he is not liable to pay same as he was not seller, but only auctioneer, and yet he collected sales-tax from persons to whom auctioned goods was sold. It was on facts that their Lordships held that receipt in question was trading receipt. While holding so, their Lordships observed as follows : "It is apparent from order of AAC and has not been disputed before u s in present case that cash memos issued by appellant to purchasers in auction sale that it was appellant who was shown as seller. amount realized by appellant from purchaser included sales-tax. appellant, however, did not pay sales-tax to actual owner of goods auctioned because statutory liability to pay sales-tax was of appellant. appellant company did not also deposit amount realized by it as sales- tax in State exchequer because it took position that statutory provision creating that liability upon it was not valid. As amount of sales-tax was received by appellant in its character as auctioneer, amount in our view, should be held as trading or business receipt. appellant would, of course, be entitled to claim deduction of amount as and when it pays it to State Government." It is difficult to comprehend as to how above stated views of Hon ble Supreme Court can be perceived as authority of proposition that, irrespective of assessee s obligation and willingness to account for receipt, same can be treated as of income nature. In case before their Lordships, it was stand of assessee that he is not liable to pay amount collected from customers. In case before us, it is consistent stand of assessee that amount received by assessee was receipt in trust and for specific purpose. We, therefore reject reliance of authorities below on Hon ble Supreme Court s judgment in case of Chowringhee Sales Bureau (P) Ltd. (supra). Similarly, as far as Indian Molassess Co. Ltd s case (supra) is concerned, same has no application in matter either. This case deals with question whether or not deduction of liability, which was held to be contingent liability on facts of that case, can be allowed as deduction. We are not really concerned with deductibility of expenditure because expenditure, in respect of disbursements made by assessee before us, will in fact be expenditure of principal and not assessee. 8. For reasons set out above, we are of considered view that authorities below did not have cogent basis for coming to conclusion that Rs. 18,18,228 lying to credit of assessee s principal constituted income of assessee. As assessee was accountable to his principal in respect of this amount, and as this amount was not unfettered receipt in hands of assessee, it could not be said to be income of assessee. addition sustained by CIT(A), therefore, deserves to be deleted. However, AO is at liberty to tax same in case this amount was subsequently, if so, principal waived liability of assessee to account for or refund same. Subject to these observations, grievance of assessee is upheld. AO is, accordingly, directed to delete impugned addition. 9. Ground No. 6 is thus allowed. 10. As regards ground No. 7, learned representatives fairly agree that issue is squarely covered by Tribunal s decision in case of Dy. CIT vs. Tristar Consultants (2004) 91 TTJ (Mumbai) 1006 : (2004) 91 ITD 15 (Mumbai) even as learned Departmental Representative dutifully relied upon orders of authorities below. In any case, as far as requirement of filing necessary certificate is concerned, it is only procedural requirement and is curable defect. There are number of decisions by several co-ordinate Benches to that effect. We see no reasons to take any other view of matter than view taken by co-ordinate Benches. Respectfully following same, we uphold grievance of assessee and direct AO to grant deduction under s. 80- O in light of our above observations and in light of Tribunal s decision in case of Tristar Consultants (supra). assessee succeeds on this ground as well. Ground No. 8 is also therefore allowed. 11. In result, appeal of assessee is partly allowed in terms indicated above. *** SURESH KUMAR KHURANA v. DEPUTY COMMISSIONER OF INCOME TAX