TaxTMI 
TaxTMI 
2014 (2) TMI 469
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....return was taken in scrutiny. The Assessing Officer noticed that the assessee had shown investment in Kisan Vikas Patras ["KVP" for short] of Rs. 1 Crore but had not shown any income from accrued interest on such KVPs in the return filed. It was noticed that the assessee was following mercantile system of accounting. He was, therefore, questioned why the interest accrued on KVPs should not be added to his total income. The assessee contended that the KVPs are the capital asset under section 214 of the Incometax Act, 1961 {"Act" for short} and will be accounted for when matured at the cost indexation. The Assessing Officer did not accept his contention and instead added a sum of Rs. 21.09 lakhs [rounded off] to the total income of the assess....
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....1420 5 3 Years & 6 months 12 1500 6 4 Years 12.5 1620 7 4 Years & 6 months 12.5 1730 8 5 Years 12.5 1860 9 5 Years & 6 months 12.5 2000 6. In the case of Kantilal Sanghvi v. ACIT [2004] 89 ITD 282, it has been held as under : " 17. The act of purchase of Indira Vikas Patra tantamount to depositing of the money in the post for a specific period on a specified rate of interest. On the mature of the amount when assessee gets his money back, he is not getting the amount for transferring any asset. He is only getting his money, which post office promised to pay back after a specified period. As such, there is not transfer. Resultantly, there is no capital asset. Ex consequent, it ....
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....rest accrues at the stipulated intervals and the investor is eligible to claim the principal amount with the accrued interest on maturity or at specified intervals. In the case of KVP even though they are transferable, it has not market value as such and has only maturity value which is nothing but invested with accrued interest. The investor only gets his money, which post office promised to pay back after a specified period. As such, there is no transfer and therefore the KVP cannot be considered as capital asset. Repayment of the deposited amount with interest on maturity by post office cannot be treated as consideration for transfer of KVP by the holder. In view of these facts and applying the ratio of the decision of High Court we are ....
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....the date of the certificate, and provided that for a certificate purchased on or after 1st day of March 2003, its maturity shall be eight years and seven months. The amount, inclusive of interest, payable on encashment of the certificate at any time after expiry of its maturity period shall be Rs. 2,000/-for a denomination of Rs. 1,000/-. Rule 13 pertains to premature encashment and permit such premature encashment, notwithstanding anything contained in rule 12, on the death of the holder of the certificate; on forfeiture by a pledgee being Gazetted Government Officer, or when ordered by the Court of law. Subrule (2) of Rule 13 provides that when a certificate is encashed within a period of one year from the date of the certificate, only th....
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.... 3 3 years and 6 months or more but less than 4 years 1267.19 4 4 years or more but less than 4 years & 6 months 1310.8 5 4 years and 6 months or more but less than 5 years 1355.9 6 5 years or more but less than 5 years & 6 months 1435.63 7 5 years and 6 months or more but less than 6 years 1488.49 8 6 years or more but less than 6 years & 6 months 1543.3 9 6 years and 6 months or more but less than 7 years 1649.13 10 7 years or more but less than 7 years & 6 months 1713.82 11 7 years and 6 months or more but less than 8 years 1718.06 12 8 years or more but less than 8 years and 7 months 1850.93 It could thus be seen that on the grounds specified in R....