BADAR DURREZ AHMED, J.

( 1 ) THE assessee, a lawyer by profession, filed his return of income on 31. 10. 1995 in respect of assessment year 1995-96. He declared a total income of Rs. 2,05,326/- after claiming a deduction of Rs. 17,05,760/- u/s 80-O being 50% of the gross professional fees received in foreign exchange to the extent of Rs. 34,11,529/ -. In the profit and loss account, the assessee had shown gross professional fees amounting to Rs. 41,46,203/- (including the said gross professional fees received in foreign exchange) and gross interest receipt of Rs. 42,804/ -. The assessee claimed various expenses like salary, travelling expenditure, conveyance and other official expenses and after deducting the same from the gross receipts, the net profit has been shown as Rs. 17,68,707/ -. The Assessing officer processed the return u/s 143 (1) (a) of the income Tax Act, 1961 (hereinafter referred to as the said Act ) and by intimation dated 27. 01. 1997 the total income was computed at Rs. 10,26,740/ -. The Assessing officer had allowed a deduction of only Rs. 8,83,946/- u/s 80-O as against the claim of Rs. 17,05,360/- by the assessee. The assessee had claimed the deduction u/s 80-

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