The assessee, a solicitor, declared receipts from profession of Rs. 1,82,02,958 for AY 2007–08, while TDS certificates showed receipts of Rs. 5,56,88,817. The AO added the difference (Rs. 3,74,85,859) to the assessee’s income. The assessee explained the excess represented advances received from clients, part of which were spent on behalf of clients for counsel fees, stamp paper, court fees, payments to the rent controller, bank drafts in lieu of stamp duty/registration, etc., and provided head-wise particulars. The Commissioner (Appeals) and the Tribunal accepted the explanation. Held: No adverse inference under s. 145 could be drawn; the monies were held in a fiduciary capacity and payments made as agent were not disputed. The differential amount was not assessable as income.(AY. 2007-08)