TaxTMI 
TaxTMI 
2005 (1) TMI 62
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....mpugned addition of Rs. 10,79,858 on account of interest income accrued on FDRs of the assessee even when the said interest income was free from all encumbrances and was liable to be taxed as per the provisions of the Income-tax Act, 1961?" The assessee-respondent is a surgeon who filed his return for the assessment year 1994-95 declaring an income of Rs. 4,41,116 on January 25, 1995. The income of the assessee included the income of his minor son of Rs. 1,02,641 and agricultural income of his minor son of Rs. 1,89,000 from a private trust. The assessment in the case was completed under section 143(3) of the 1961 Act on March 26, 1997, at an income of Rs. 21,02,940 which included Rs. 10,79,858 on account of interest accrued on fixed depo....
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....--------- 82,09,548 5,44,531 76,65,016 27-7-1992 14,63,192 1,26,128 13,37,064 28-10-1993 19,56,665.75 1,40,661 18,16,004 23-2-1994 3,27,045 36,629 2,90,416 ....
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....bsp; 1992-93) (ii) 30-7-1993 618828 996452 30-7-1993 to 31,695 (Inst. on 31-3-1994 above FDR 333574/112 &nb....
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....; 31-3-1994 (v) 30-1-1994 622631/58 2,49,113 1-2-1994 to 4,163 31-3-1994 ---------- ....
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....elopment Trust Ltd. [1986] 161 ITR 524 is not applicable as that was a case where the acquisition itself was under challenge but in the present case, the quantum of compensation is only under challenge. Shri Akshay Bhan, learned counsel appearing for the assessee, on the other hand, submitted that the absolute ownership of the principal amount of the fixed deposit receipts itself is in dispute and, therefore, the interest received/receivable from the bank on these fixed deposit receipts cannot be treated as free from encumbrances and included in the total income. He further submitted that in case the assessee is required to return the enhanced compensation then he would also be liable to return the same along with interest thereon and, t....
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.... in appeal filed by the State Government, therefore, no income accrued to the assessee. The court, however, drew the distinction between cases where the right to receive payment was in dispute and also between the cases where only the quantification was in dispute. The case before the Gujarat High Court in Bavla Gopalak Vividh Karyakarisahakari Mandli Ltd.'s case [2002] 253 ITR 97 related to a matter where the grant of subsidy itself was in dispute in the pending appeal. It was thereupon held that it did not form part of the income. That case fell within the ratio laid down by the apex court in Hindustan Housing's case [1986] 161 ITR 524. The aforesaid judgments are not applicable to the facts of the present case. The interest amounti....