Law:

Section:

Section 5 of the Income-tax Act, 1961 - Income - Accrual of - Assessment years 1989-90 to 1994-95 - Assessee-company was acting as a nodal agency for implementation of schemes evolved by Central Government - Entire amount to implement schemes was released by Housing and Urban Development Corporation (HUDCO), i.e., Government of India undertaking - Assessee, in turn, disbursed that amount to various urban local bodies - Loan amount was to be repaid to HUDCO over a period of 36 to 44 months - Assessee was entitled to receive 3 per cent of loan amount towards administration and supervision charges (A&S charges) for implementing schemes and for meeting day-to-day expenses - Assessee deducted said amount at time of disbursal of loan amount to municipalities and local bodies - For relevant assessment years, assessee spread over amount so deducted for entire loan repayment period on ground that it had an obligation to monitor repayment of loan for a period of 36 to 44 months - Revenue, however, took view that entire amount received in form of 'A&S' charges had to be treated as income of assessee for year of receipt itself - Whether in view of fact that even in case assessee did not honour obligation of monitoring and ensuring repayment of loan to HUDCO, there was no obligation to return A&S charges deducted, receipt of said charges was to be treated as absolute and final - Held, yes - Whether, therefore, it had to be brought to tax in year of receipt itself - Held, yes FACTS The assessee-company used to act as a nodal agency for implementation of the schemes evolved by the Central Government such as low cost sanitation, slum upgradation-cum-employment generation, etc. The said schemes were financed by loans from Housing and Urban Development Corporation (HUDCO), an undertaking of the Government of India. All the amounts to implement schemes were released to the assessee by the HUDCO and the assessee, in turn, used to disburse the amounts to various urban local bodies. The loan amount was to be re-paid to HUDCO over a period of 36 to 44 months. The assessee-company was entitled to receive 3 per cent of the loan amount towards administration and supervision…

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