Advocate receiving compensation on behalf of clients

Mahesh (Consultant) (26 Points)

09 February 2009  

Hi All

My client is a practising advocate in land compensation cases. The practice followed is he is receiving land compensation of illetrate clients in his bank account which is reflected in his receipts and payments. The compensation amount received is around 1.5 crores for F.Y 2005-2006. My clients pays the amount to the client through cash and bearer cheques to all clients. He gets his fees only after the payment(Around Rs.450000 Gross.

Now his assessing officer has sent a notice that why a audit was not conducted u/s 44AB. Treating the receipts of compensation of land compensation cases as his individual receipt, he is attracting penalty U/s 271B. I appeared and argued that the receipts are not his receipts and the mere reflection in receipts and payments doesnt mean that they are his receipts. Now the assessing officer requires me any case laws to prove my point. Please clarify and give ur valuable views and if possible case laws to prove my point. Thanks