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2012 (8) TMI 17 - BOMBAY HIGH COURTAccrual of interest - period of holding - Held that:- The right to receive interest on the Government securities vested in the respondent only on the due date mentioned in the securities. Consequently, interest accrued on the securities only on the due dates and cannot be said to have accrued to the respondent on any date other than the date stipulated therein - As in respect of the securities held by the respondent on 31st March, 2001, the due date for payment of interest thereon had not arrived on 31st March, 2001 and that the respondent sold some of such securities prior to the next due date for payment of interest. It is only the holder of the security on such date to whom interest can be said to have accrued. In any event interest did not accrue to the respondent on 31st March, 2001, as admittedly interest was not payable on that date as per the terms of the said securities - The appellate authorities, therefore, rightly deleted the addition made by AO as interest income. Receipt of consideration towards the sale of the securities - DTAA between India and Cyprus - the appellant's case is that the respondent's case does not fall within Article 14(4) only because it falls within Article 11(4) - Held that:- The governing provision of Article 11(4) is that interest means income from a debt-claim of every kind and a debt-claim arises on account of a transaction that creates a debtor-creditor relationship and the consideration received by the respondent in respect of the sale of the said securities is a capital gain - rejecting the submission that the gain from the sale of the said securities falls under Article 11(4), it follows that the same falls under Article 14(4).
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