Indian Kanoon - Search engine for Indian Law

3. On behalf of the revenue, the above submissions were opposed and it was pointed out that CDS was nothing but a deposit of cash by the assessee with the Government under the terms of the statute and the Government continued to pay interest on such deposits and merely because repayment was made in five equal instalments of the principal amount and the interest earned thereon, the repayment of the CDS would not assume the character of annuity deposit. According to the learned departmental representative, the terms of Section 2(e)(2)(ii) had, therefore, no applicability to the compulsory deposit. Section 7A excluded the compulsory deposit from the net of wealth-tax to a limited extent. For the first time with retrospective effect and the very fact that the Legislature enacted Section 7A and extended to compulsory deposit, the exemption available to the deposits with a bank went to show that earlier no exemption to compulsory deposit was available under the Act. It was, therefore, incorrect to say that the assessee was being brought within the taxation net on account of Section 7A. It was a different matter that the assessee could not get the benefit for the compulsory deposit in terms of Section 5(1)(xxvi) because the assessee had other assets to whom the exemption in question had been granted to the maximum limit prescribed under Section 5(1 A). The amount, was, therefore, rightly taxed in the hands of the assessee.