Revenue deduction for security deposit allowed on payment under tax law; refund is taxable when returned.

The Board advises that the security deposit for a telex connection may be treated as a revenue expenditure deductible in the year of payment if claimed, because it does not earn interest while the equipment is installed. When the Postal Authorities refund the deposit on closure of the connection, the refund must be treated as income of the assessee in the year of refund.

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