Law:

Section:

Section 4 of the Income-tax Act, 1961 - Income - Chargeable as - Assessment year 1969-70 - Assessee was senior advocate practising in High Court - He received his fee from client and also clerkage towards his clerical establishment - Rules of High Court recognized standing practice of clerks receiving 10 per cent of sum paid to advocate as his fee and said sum received by clerks was taxable as per said rules - Whether on facts, it could be said that receipt of clerkage was not part of professional income of assessee - Held, yes FACTS The assessee was practising as a senior advocate, generally before the High Court. Besides his professional income, he received certain amount as clearkage to his clerical establishment. The ITO held that the clerkage was received by the assessee and then paid to the clerks and so it was not a case of diversion at source but appropriation only and, therefore, the said clerkage was not permissible deduction. The AAC held that the clerkage was an amount payable to the staff who assisted him in the professional work and the same did not form part of the total income of the assesee and, therefore, the question of considering deductibility of the same from the professional receipts did not arise. The Tribunal upheld the finding of the AAC. On reference : HELD The statutory provisions provide for taxation of clerk's fee at 10 per cent of the fee paid to the advocate. Rule 25 of the High Court Rules, (Rules) requires the advocate, including the senior advocate, to file a fee certificate. In cases in which a senior advocate is appearing such certificate shall be accompanied by a voucher/receipt signed by the senior advocate for the fee paid to him. The rules do not require any certificate of payment of clerk's fee. But, nonetheless, the rules require taxation of clerkage. This shows that the rules of the court recognise a standing practice of the clerks receiving 10 per cent of the sum paid to an advocate as his fee. The assessee claimed 10 per cent of the fee paid to him as clerkage. This claim was accepted by the Assistant Commissioner and the Tribunal. There was no material to hold that this finding of fact was not based on sufficient…

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