Law: Income Tax Act, 1922

Section:

Income-tax----Interest---Taxability---Assessee, a Cooperative Society sold land to Development Authority in the terms and conditions that the Authority will make the payment in instalments and these will be simple interest at the Bank rates on the delayed payments---Amount of interest paid on delayed payment to the Society was charged to tax by Assessing Officer on the ground that the said amount was paid by a non-maker---Validity---Held, payment received being not on account of any injury to the capital assets of the society. interest on delayed payments received for Development Authority had been rightly charged to tax and should be on accrued basis. [Case-law referred]. ORDER ASSESSMENT YEARS 1979-80 TO 1986-87: Assailed before us are three orders of the first appellate authority:-- (i) CIT(A), Zone-I1, Lahore dated 22-4-1984. (ii) CIT(A), Zone-II, Lahore dated 31-5-1986. (iii) CIT(A), Zone-III, Lahore dated 28-8-1989. Against the above decisions the assessee and the Revenue are in appeal. The assessee challenges the order for:-- 1981-82 CIT(A), Zone-II, Lahore order dated 31-5-1986 1982-83 ---do--- 1981-82 ---do--- 1982-1983 ---do--- (1981 to 1986-87) CIT(A), Zone-III, Lahore order dated 28-8-1989. While the Revenue challenges the order for:-- 1979-80 CIT(A), Zone-II, Lahore order dated 22-4-1984 (1979-80 to 1982-83) CIT(A), Zone-II, Lahore order dated 31-5-1986. 2. Appeals were filed by the assessee against the order of May, 1986 in August, 1986 and against second order in October, 1989. On 16th of February, 1998 the assessee moved an application requesting permission to raise additional grounds of appeal for 1980-81, 1981-82, 1982-83 and' 1983-84. The additional grounds-- 1980-81: (i) That notwithstanding other submissions the amount of Rs.2,973,271 is not taxable being capital gain and is liable to be deleted. (ii) That notwithstanding other submissions the amount of Rs.2,973,271 is not taxable being causal income and is liable to be deleted. (iii) That notwithstanding other submissions the amount of Rs.2,973,271 is not taxable being an adventure in the nature of trade and is liable to be deleted. 1981-82: (i) That notwithstanding other submissions the…

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