TMI Blog2016 (9) TMI 58X X X X Extracts X X X X X X X X Extracts X X X X ..... light of the agreement with the beneficiaries, the assessee was entitled to retain the differential amount of interest recovered from the borrowers in excess of the agreed rate of interest. Evidently, therefore, the differential amount (residual EMI) would accrue to the assessee only as and when such interest amount in excess of the agreed amount was recovered by it. Such amount would, therefore, be taxable in the year in which the same had accrued to the assessee. It is an admitted position that the EMI residual income had subsequently been brought to tax in the year in which the related recoveries were made. In these circumstances, the view taken by the Tribunal does not suffer from any legal infirmity, warranting interference. The appeal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rence is made to the facts as appearing in Tax Appeal No.197/2016 relatable to the assessment year 2001-02. 3. The respondent assessee is engaged in advancing various loans to its customers on which various amounts of EMIs comprising of principal amount and interest amount are recovered from the clients and the interest amount is shown as income. 3.1 In relation to the years under consideration, the Assessing Officer noticed that the assessee had sold its portfolio of individual home loans aggregating to ₹ 8109.09 lakhs but the assessee was obliged to act as receiving and paying agent for effecting recoveries from the individual borrowers until the point of time when all these loans are fully recovered. Under this agreement, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... akhs) in the assessment year. The assessee carried the matter in appeal before the Commissioner (Appeals) who deleted the addition on the ground that the income is to be brought to tax only when it accrues and the accrual takes place only in the year in which the amounts recovered from the borrowers are in excess of the amount payable to the buyers of loan portfolio. It was also noticed that the EMI residual income had been subsequently brought to tax in the year in which related recoveries had taken place. The revenue carried the matter in appeal before the Tribunal but did not succeed. 4. Mr. M.R. Bhatt, Senior Advocate, learned counsel for the appellant in each of the appeals reiterated the findings recorded by the Assessing Officer. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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