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: 560 x 30 = 16,800   Amount to be deposited at 10% interest rate to yield Rs. 560/- per annum for a period of 30 years according to Park's Table.
: 140 x 4 x 9.427 = Rs.
5279.12   Sl. No. Amount in deposit Amount to be paid in the year.
Interest earned in the year.
Amount drawn from capital during the year.
 
1.

5,279.12 527.91 32.09  

13. The difference between capitalisation method and the annuity method has been explained in para 6 of the judgment reported in 1981 Ker LT 646 : (AIR 1981 Ker 223) (supra) as follows (at page 226 of AIR) :--

"... If we capitalise the income for the number of years during which the tree is expected to yield in future at the prevalent rate of interest the capitalised value will represent not only the return for these years, but in addition the capital that would remain intact at the end of the period. To put the same idea in a different way, it would represent such recurring return for all time and not for the limited period during which alone the tree would have continued to yield income. Therefore, that would not be just equivalent of the compensation. If 5% return would be a reasonable return and the trees would normally be expected to yield, say for 25 years more what is paid as compensation must yield the annual return at 5% which would be equivalent of what the owner of the trees would have obtained had these trees continued to stand in the property for 25 years but since the trees would cease to yield income at the end of 25 years the amount paid as compensation must exhaust itself by the end of that period. In other words it will be as if the amount of income is received only for a period of 25 years. In that event the determination should be as if an annuity for 25 years is provided for. What amount invested today will yield annuity for a specified period will have to be computed. The present value of recurring payments for a specified number of years will have to be worked out. It will be easy to work it out on the basis of the valuation tables provided in the Appendix in "Parks on Valuations Land and Houses". The present value of Re. 1 /- per annum at specified rates of interest return for a specified number of years could be easily found from the table. That would serve as the basis for determining what such value will be applying the multiplier representing the specified number of years."