ORDER SHEET IN HIGH COURT AT CALCUTTA Special Jurisdiction (Income Tax) ORIGINAL SIDE ITAT No. 80 of 2014 G.A. No. 1933 of 2014 COMMISSIONER OF INCOME TAX, KOL-XIX, KOL Versus RATAN LAL GAGAR BEFORE: Hon'ble JUSTICE SOUMITRA PAL Hon'ble JUSTICE DEBANGSU BASAK Date : 12th September, 2014. Md.Nizamuddin, Advocate Mr.J.P.Khaitan, Sr.Adv. Ms.Anupa Banerjee, Adv. Court : This appeal has been preferred under section 260 of Income Tax Act, 1961 by appellant/revenue against order dated 27th January, 2014 passed by Income Tax Appellate Tribunal C Bench, Kolkata in ITA Nos. 1758 and 1786/Kol/2010 relating to assessment year 2005-06 on following questions: i) Whether on facts and in circumstances of case, learned Tribunal has erred in law in deleting addition of entire amount of Rs.1,25,62,006/- received by assessee from his clients and following cash system of accounting ? ii) Whether on facts and in circumstances of case, learned Tribunal has erred in law in deleting addition of entire amount of Rs.1,25,62,006/- received by assessee from his clients, by disregarding that law firms following cash system putting aside all advances in balance sheet, thereby they are deferring tax liabilities and enjoying said advances without paying tax ? 2 It is submitted by Mr. J.P. Khaitan that issue involved is covered by judgment in CIT, West Bengal-I Vs. Sandersons & Morgans: 75 ITR 433 (Cal). In support of his submission, he has referred to paragraph of said judgment, which specifically deals with issue in following manner: On other hand, he submitted, when money was made over to solicitor, in instant case, solicitor received money as trading receipt. That character he submitted, was impressed upon money throughout and balance of that money, even though refundable to client, when transferred to profit and loss account would be profit out of trading receipt and consequently assessable to income tax. In our opinion, this argument should not be accepted. argument proceeds on entire misconception of character of client s money received by solicitor. solicitor is agent of client. client makes over money to solicitor for some work being done by solicitor as his agent. money must be employed to that purpose and must not be treated as money received for any other purpose. This position is not altered by fact that solicitor retains lien upon balance of money for his costs. result of solicitor having lien on balance of money is no more than person having charge on somebody else s money. We are of opinion that when solicitor receives money from his client, he does not do so as trading receipt but he receives money of principal in his capacity as agent and that also in fiduciary capacity. money so received does not have any profit making quality about it when received. It remains money received by solicitor as client s money for being employed in client s cause. solicitor remains liable to account by this money to his client. Md. Nizamuddin, learned advocate appearing on behalf of appellant/ revenue does not dispute that issue has been dealt with in case cited. 3 We find that as issue is covered by judgment of jurisdictional Court, In our view, no substantial question of law arises. Hence, application and appeal are dismissed. (SOUMITRA PAL, J.) (DEBANGSU BASAK, J.) km AR(CR) Commissioner of Income-tax, Kol-XIX v. Ratan Lal Gagar