TMI Blog2001 (10) TMI 84X X X X Extracts X X X X X X X X Extracts X X X X ..... 0-91 itself'? 2. Whether, on the facts and in the circumstances of the case, and the assessee having specifically opted to receive the entire interest on the day the bonds were taken at a discounted rate, the Tribunal is right in law in affirming the order of the Commissioner of Income-tax (Appeals) who had directed the Assessing Officer to assess only a sum of Rs.32,965? 3. Whether, on the facts and in the circumstances of the case did the decision and circulars relied on by the Tribunal have application to the facts of the case?" On receipt of notice the assessee appeared and the appeal was heard on the substantial questions of law formulated as above. During the previous year relevant to the assessment year 1990-91, the assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ree years. The Assessing Officer held that since the assessee had opted for the discounted value option, the entire interest received by the assessee had accrued to the assessee during the accounting year and he had also received the whole of the amount during the same accounting year and in that situation, the entire income was liable to be assessed during the accounting year at the hands of the assessee. The assessee went up in appeal. The Appellate Assistant Commissioner, following a decision of the Income-tax Appellate Tribunal, Bombay, held that the entire amount received by the assessee as interest during the accounting year could not be taxed in that year and that the assessee was entitled to have interest income spread over for thre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... behalf, it is not possible to postulate accrual of portions of that income for the future years. There can be only one accrual and that accrual in respect of the entire discounted interest took place in this case on exercise of option by the assessee and at his volition during the relevant accounting year. It is, therefore, not possible to accept the contention of the assessee that only such portion of the interest that is attributable to the relevant accounting year should be taken into account for the current assessment year. Moreover, in this case the income was also received in the same year and since the accrual and the receipt of the income were both in the same accounting year, it appears to us that the assessee is liable to be taxe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the whole of the discounted amount as business expenditure during the relevant accounting year itself. We are of the view that the ratio of that decision cannot have application in the case on hand. Here, the assessee was receiving interest income and he had to exercise his option to receive the same, either spread over three years or at a discounted rate in the accounting year itself. The assessee chose to exercise his option to receive the income during the relevant accounting year. By exercise of that option, the entire discounted interest income accrued to the assessee. This was also followed up by actual receipt of that income by the assessee. In that situation, we are of the view that the ratio of the decision of the Madhya Pradesh ..... X X X X Extracts X X X X X X X X Extracts X X X X
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