2023 (1) TMI 725

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.....01.2018 in ITTAMP.No.784 of 2017) under Section 260A of the Income Tax Act, 1961 (briefly 'the Act' hereinafter) against the order dated 25.06.2004 passed by the Income Tax Appellate Tribunal, Hyderabad Bench 'B', Hyderabad (Tribunal) in I.T.A.No.225/Hyd/1999 for the assessment year 1994-95. 3. We may mention that the appeal was admitted on 17.09.2012 on the following substantial questions of law: (i) Whether on the facts and in the circumstances of the case, the Tribunal is justified in holding that under the provisions of Section 145 of the Act (as it stood at the relevant time), income from interest on securities should necessarily be computed on accrual basis and not on due basis for this particular assessment year 1994-95 ? (ii) ....

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....essment dated 07.02.1997 held that such interest income is liable to be taxed on accrual basis. 6. Against the aforesaid order of the assessing officer dated 07.02.1997, appellant preferred appeal before Commissioner of Income Tax (Appeals) (for short 'CIT(A)' hereinafter). Order of the assessing officer dated 07.02.1997 was upheld by CIT(A) vide the order dated 11.01.1999. Thereafter, appellant preferred further appeal before the Tribunal. Tribunal vide the order dated 25.06.2004 held that interest had accrued on day-to-day basis and therefore has to be taxed on accrual basis only. 7. Issue raised in this appeal has been gone into by the Bombay High Court in Director of Income Tax (International Taxation) v. M/s. Credit Suisse First Bost....

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....sing a cause of action. Subject to a contract to the contrary, a debtor is not bound to pay interest on a date earlier to the one stipulated in the agreement/instrument. In the present case, it is admitted that interest was not payable on any date other than that mentioned in the security. The assignee or purchaser of such a security does not stand on a different footing. He has, by virtue of the assignment or purchase, the right vested in him to receive the interest but only on the terms of the security and subject to all the incidents thereof as were applicable to the original owner. 8. Thus, it has been held that interest can be said to have accrued only on the date on which it was due as per the terms and conditions of the security. Wh....