TMI Blog2001 (7) TMI 270X X X X Extracts X X X X X X X X Extracts X X X X ..... t what the assessee had received was the discounted value of the interest for three years and that the right to receive the discounted amount had accrued to him during the current year. The CIT(A) ought to have noticed that even though interest is receivable for three years what was received was a lower amount in respect of which the right accrued this year and so on that basis the assessment should have been confirmed.' 2. The assessee in this case had deposited an amount of Rs. 3,92,000 in IDBI Capital Investment Bond for a period of three years. The assessee was entitled for interest at 996 per annum. As per the scheme formulated by IDBI, it was possible for the assessee to opt to receive the discounted value of interest of the entire ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct, the income is assessable at the moment of its receipt or at the moment of its accrual. The receipt of the income might be simultaneous with, or subsequent to the accrual of income. But there cannot be a situation where the income received in a particular assessment year can be apportioned and a part of the income shown as income for subsequent assessment years. This is because as far as those subsequent assessment years are concerned, there is no accrual or receipt of any income. The basis for such apportionment of interest has not been clarified by the CIT (Appeals). There is no legal basis for assessing the discounting interest in different assessment years. The charging section 5(1) clearly lays down that income is assessable on rece ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... but attributable to three years, have to be considered for the said three years proportionately, instead of considering entirely for the year of receipt. 6. On this point, the learned departmental representative submitted that this case is not comparable to the case considered by the Supreme Court in Madras Industrial Development Corpn. Ltd. In the said case the liability of the refund of debentures was spread over a period of 12 years and it was in that context the Supreme Court held that the corresponding discount also may be spread over, a period of 12 years for the purpose of claiming deduction in computing taxable income. The learned departmental representative submitted that, in contrast, in the present case the assessee had no ri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case the assessee could have received the interest for the three years differently or it could have received the interest at a discounted rate in the first year itself in a lumpsum. The assessee has chosen the second option, Le., it discounted the interest and received the entire interest in the first year itself at a reduced rate. By exercising the option to receive the interest in lumpsum at a discounted rate, the assessee has foregone its right to receive the interest for the remaining two years. The assessee had no right at all for any interest for the remaining two years. When no such right to receive the interest existed for those two years, correspondingly there is no question of interest accruing or receiving for those two years. As ..... X X X X Extracts X X X X X X X X Extracts X X X X
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