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TMI Blog1987 (7) TMI 143X X X X Extracts X X X X X X X X Extracts X X X X ..... 5 per cent payable on redemption of 15 per cent non-convertible debentures of face value of Rs. 2.5 crores issued during the instant year which were due to redemption in 1989 i.e., to say after seven years. The ITO held that the premium payable at the end of seventy year could not be regarded as expenditure relevant to the instant assessment year and it could not be regarded as an accrued liability of the year. He, therefore, disallowed the claim. The CIT (Appeals) endorsed the order of the ITO. He also rejected the alternative contention of the assessee that at least 1/7th of the amount of the premium should be allowed in the instant year. 4. Contention of learned representative for the assessee is that the said amount of premium is in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m should be provided for out of profits over the period of the debentures. Debentures may even be issued at a discount and repayable at a premium." 6. We, therefore, hold that the amount of premium of Rs. 12,50,000 should be allowed as a revenue reduction over the period of debentures, i.e., to say seven years and as such 1/7th of it should be allowed in the instant year. 7. Ground Nos. 3 & 4 : The assessee by an agreement dated 5.12.1979 obtained assignment of the trade mark "Kleertone" together with the goodwill of the business attached thereto from NELCO. By another agreement of even date the assessee was appointed as agents by NELCO for collecting the outstanding debts of NELCO aggregating to Rs. 16 lakhs as on 31.8.1979 which related ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee and interest income accrued thereon was assessed in the hands of the assessee. In the instant case, the assessee took over the trade mark together with the goodwill of NELCO. The agreements of taking over the trade mark and the goodwill on one hand and appointment of the assessee as agents of NELCO for recovery of debts on the other were though separate but they were even dated and obviously contemporaneous. There is a reference of the agreement of assignment of trade make and goodwill in the agreement appointing the assessee as agents of NELCO for recovery of debts. Moreover, the assessee would not have entered into agreement of agency with NELCO on payment of Rs. 16 lakhs in advance for making recovery of the debts of NELCO for recov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2.1972 in Voltas' case (sic.). It claimed refund of Excise Duty paid from the Central Excise department and for that purpose field a writ petition No. 844 of 1981 in the Bombay High Court. The Hon'ble High Court, inter alia, passed an interim order on 29-6-1981 directing the Central Excise department to deposit in Court Rs. 1,23,13,843 relating to the period from 1.9.1971 to 31.3.1981 with a liberty to the assessee to withdraw the same on furnishing to the Central Excise Department a bank guarantee to the extent of such amount withdrawn. On appeal by the Central Excise department the Hon'ble High Court by an interim order dated 7-10-1981 reduced the figure of Rs. 1,23,16,843 to Rs. 67 lakhs. The said amount of Rs. 67 lakhs was withdrawn by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... elopment Trust Ltd. (1986) 161 ITR 524. 11. In reply, it is contended by the learned departmental representative that the said amount of Rs. 67 lakhs was in fact cash receipt and should be included in the income of the assessee. It is further contended by him that in the event of repayment the assessee can well claim it as a deduction. 12. Since the said amount was received by the assessee on the basis of ad interim order of the court on furnishing bank guarantee it could not be taken as finally received by the assessee. The assessee was mere custodian of the said amount which it was obliged to refund at any time by the order of the court. The principle contained in Hindustan Housing & Land Development Trust Ltd.'s case is applicable to t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ount which the Government has not receive. This observation was made by the Hon'ble Mr. Justice Mitra while he was considering if the dividend income received by the shareholder was liable to the grossed up with the tax deducted at source. The interpretation of section 199 which is directly in point in this case was not before the Hon'ble High Court. It reads as under : "Any deduction made in accordance with the provisions of section 192 to 195 and paid to the Central Government shall be treated as a payment of tax on behalf of the person from whose income the deduction was made ....". In conjunction with section 199 it is necessary to read section 237 which is as under : "If any person satisfies the Income-tax Officer that the amount of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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