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TMI Blog1987 (1) TMI 123X X X X Extracts X X X X X X X X Extracts X X X X ..... Mafatlal vs. WTO (1986)18 ITD 189 (Bom) (SB) where it was held that the deposit under CDS was not an annuity and was only a deposit in a bank. 3. The ld. counsel for the assessee, however, urged that the aforesaid Spl. Bench decision needed reconsideration. His contention was that the Spl. Bench was not right in holding that an annuity was a fixed sum of money payable annually or periodically (as per para 17 of Spl. Bench). The Spl. Bench had noted the definition "an annuity cannot be related to a fixed proportion of capital". Spl. Bench had held that as a fixed proportion (1/5th) of the deposit under CDS was returnable every year after a lapse of two years of deposit, the said return of deposit was not an annuity. The Bench had relied o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... decisions. The Court extracted Evershed M.R.'s observations in re. Duke of Norfolk Public Trustee vs. England Revenue Commissioners (1950) Ch 467, as under: "Both the two last mentioned cases were instances of dispositions of aliquot shares of the general income of an estate to be enjoyed in succession, as distinct from an annuity or yearly sum, which even though variable........ is in on way dependent upon or related to the general income of the estate." 5. The ld. counsel for the assessee thus highlighted that annuity could be variable. His submission are, however, contradicted by the subsequent discussion in Ahmed G.H. Ariff (1966) 59 ITR 230 at 234 (Cal): "Instances of annuity are given in the illustration to s. 173 of the Indi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er the assessee's further contention before us that an annuity was not "purchased" as it was forced on the assessee under the CDS statute. Special Bench in para 25 had made similar observations relying on CIT vs. T.N. Arvinda Reddy (1979) 12 CTR (SC) 423 : (1979) 120 ITR 46 (SC) where it was held that the plain meaning of 'purchase' is buy for a price or equivalent of price. We, therefore, are unable to accept the assessee's contention that buying under compulsion was not buying. For this submission, assessee had relied on certain decisions under s. 10(2)(vii) of IT Act, 1922, where it was held in the case of acquisition/requisition by Government that there was no sale and therefore the excess of price over written down value was not assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 02 (SC) and CWT vs. Raghubar Narain Singh (1984) 39 CTR (SC) 153 : (1984) 146 ITR 223 (SC). In both the cases, the Supreme Court noted the hazards of litigation and of recovery of the compensation and directed that the market value of the right to receive compensation should be arrived at. In the present case, there are no hazards of recovery of deposit under CDS. We accordingly agree with the Special Bench that there is no reason for discounting the said deposits under CDS for inclusion in the assessee's net wealth. 10. We also reject (following the Special Bench) the assessee's contention that the deposit under CDS is comparable to "annuity deposit" under Chapter XXIIA of IT Act. Therefore, we do not further go into the assessee's reli ..... X X X X Extracts X X X X X X X X Extracts X X X X
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