The following is the summary of the events:- 1. In 1986 my client paid x amount of Rs. for purchasing a site from a Society 2. Across 6 years she made similar payments as Instalments
However, the site was not delivered to my client. Hence she claimed her money back and she got back the amount she had paid. However, as per agreement and also as decided later in the Court of Law she was paid 18% interest for the period the money was with the society, in one payment.
Now, she says the interest as a whole is not relating to the current year and it pertains to last six years. She says it should be taxed across those years. As we know belated return can be filed only within 1 year from the end of relevant assessment year, this is not possible. Or is there any way out.
25 March 2010
The amount will be taxable in the year in which the court order was received by her as till that time it was not sure whether or not the claim will be received.
So till the time you are not sure whether or not you are going to receive any interest how can you offer the same as interest and tax it as income of those years.
CAclubindia
