TMI Blog2016 (5) TMI 41X X X X Extracts X X X X X X X X Extracts X X X X ..... the liability was incurred immediately, but the payment was postponed. But unfortunately, the Tribunal took a different view merely on the ground that the Fixed Deposit stood in the name of the assessee and not in the name of the buyer of the plot. This is completely a misconceived view, in view of the fact that two consequences would follow if the Fixed Deposit Receipt is taken in the name of the buyer of the plot. The first is that the interest accrued on the Fixed Deposit would be the income of the buyer of the plot. The buyers may not agree to such a course of action. The appellant/assessee has accounted for the interest accruing on the Fixed Deposit Receipts, as their own income and the same has been accepted by the Department. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the year of receipt itself? 2. Whether on the facts and in the circumstances of the case, the Tribunal is right in law in holding that only 1/5th of the amount can be claimed as deduction in each of the five years? 2. We have heard Dr.Anita Sumanth, learned counsel appearing for the appellant and Mr.T.R.Senthilkumar, learned Standing Counsel for the Department. 3. During the Assessment Year 1994-95, the appellant/assessee introduced a Fresh Novel Scheme known as Money Back Novel Scheme to the public. Under the said scheme, any person, who bought a plot of land from the appellant/assessee was assured of the return of the entire land cost upon the expiry of five years from the date of completion of sale. The assessee treated t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eme . The Fixed Deposit was to mature on 25.2.1999, with the maturity amount indicated as ₹ 62,186/-. 6. From the above facts, the Commissioner of Income Tax (Appeals) concluded that upon receipt of the entire sale consideration from the buyer of a plot, the assessee created a Fixed Deposit for a period of five years in a particular scheme in a bank, so that the maturity amount of what was deposited, equalled the amount collected towards the cost of the plot in the first instance. 7. In view of what was reflected from the facts, the Commissioner of Income Tax (Appeals) followed the decision of the Supreme Court in M/s Calcutta Company Limited v. Commissioner of Income Tax [37 ITR 1] and held that the appellant had incurred liabi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed for the interest accruing on the Fixed Deposit Receipts, as their own income and the same has been accepted by the Department. The second consequence that may flow out of the issue of Fixed Deposit Receipt in favour of the buyers of the plots is that they may foreclose the same and take away the proceeds even before the expiry of the period of five years. This may result in the bank not offering the benefit of a special scheme known as Money Multiplier Scheme . Therefore, the Commissioner was right in holding that the decision of the Supreme Court in M/s Calcutta Company Limited, would apply squarely to the facts of the case. The decision in M/s Madras Industrial Investment Corporation Limited, was rightly distinguished by the Commissio ..... X X X X Extracts X X X X X X X X Extracts X X X X
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