Solicitor’s fees — Assessability as income — Amount received by solicitor from clients for certain specific task — Amount is received in fiduciary capacity — Amount is not assessable as income.

34. (2025) 475 ITR 473 (Cal):

CIT vs. Sanderson & Morgans:

A. Y. 2007-08: Date of order 7/2/2024:

S. 4 of ITA 1961

Solicitor’s fees — Assessability as income — Amount received by solicitor from clients for certain specific task — Amount is received in fiduciary capacity — Amount is not assessable as income.

The assessee was a solicitor. For the A. Y. 2007-08, in the return of income, the assessee had shown receipts from profession of ₹ 1,82,02,958. As per the certificate of tax deduction at source, the amount received was ₹ 5,56,88,817. The assessee was required to explain the difference of ₹ 3,74,85,859. The assessee explained that it had been receiving advances from its clients, a portion of which was spent on behalf of the client for counsel’s fees, stamp paper, court fees stamp, payment to rent controller, bank draft in lieu of stamp duty and registration fees, etc. The assessee also gave complete details of payment made head-wise. The Assessing Officer recognised that the money was spent by the assessee on behalf of its clients but added the differential amount of ₹ 3,74,85,859 to the income of the assessee.

The Co