TMI Blog1936 (2) TMI 23X X X X Extracts X X X X X X X X Extracts X X X X ..... er month. The mortgage deed stipulates that the rate of interest on the loan is to be ten annas per cent. per month, that such interest is to be paid monthly, that in the event of simple interest for any consecutive period of twelve months remaining unpaid the borrower will have to pay compound interest at the rate of ten annas per cent. for each month, that the borrower is to make payments at the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng a stipulation in the mortgage deed to apply payments, or in case when the mortgagee has taken possession, the net realisations of the mortgaged property towards interest, to appropriate such payments or realisations with or without the consent of the mortgagor towards principal? We are concerned only with the first alternative, namely, before the mortgagee has entered into possession; we are n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the principal due. It seems to me that what the mortgagee must do here is to apply the money received in accordance with the provisions of the mortgage deed. The income tax authorities are certainly entitled to assume that he is doing it. In my view there can only be one answer to the question with which we are concerned and the answer to the question is in the negative and the Commissioner of In ..... X X X X Extracts X X X X X X X X Extracts X X X X
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