Law:

Section:

Section 5 of the Income-tax Act, 1961 - Income - Accrual of Assessment year 1972-73 - Assessee-company was running a chit fund scheme under which every subscriber was making payment of certain monthly interest - During currency of scheme, a kind of lottery was held every month and successful subscriber was paid a lump sum amount in addition to what he would be entitled to at end of period of scheme - Tribunal held that amount of interest received was chargeable to tax as assessee's income - Whether since a subscriber was legally bound to make payment of interest at a particular time and assessee had a corresponding legal right to receive it at that time, it could be concluded that time of accrual of interest was fixed - Held, yes - Whether, therefore, Tribunal was justified in holding that amount received as interest was chargeable to tax as assessee's income - Held, yes FACTS The assessee-company was running two chit funds. The way for becoming a subscriber was payment of interest of Rs. 150 and Rs. 100, respectively, under those schemes. During the currency of the schemes, a kind of lottery was held every month and the successful subscriber was paid a lump sum in addition to what he would be entitled to at the end of the period of the scheme. The question arose as to whether those amounts of Rs. 150 and Rs. 100, respectively, that were paid under the schemes to become subscribers thereof, were to be treated as income accruing to the assessee in the assessment year in which they were paid or was it to be chargeable to income-tax spread over the duration of the entire period of the scheme. The Tribunal held that the aforesaid amount received as interest was chargeable to tax as the income of the assessee. On reference : HELD In the instant case the important point to note was that the amount of interest, namely, Rs. 150 or Rs. 100, as the case might be, was payable at the very beginning to enable the subscriber to participate in the chit fund scheme. According to the scheme, the subscriber had no option but to pay the whole amount at the very beginning. In other words, a subscriber was legally bound to make payment at a particular time and the assessee had a…

Deprecated: trim(): Passing null to parameter #1 ($string) of type string is deprecated in /home/digixyei/sldsystempk.com/view/master-layout/view_case.php on line 492