Question ID : 928

Taxablity of Interest Free refunadble deposit

My Cllient is enagaged busess providg safe deposit vaaults on hire. There are 2 schemes-Under 1 scheme , an ter free deposit is taken and no annual rent is charged. Under 2nd Scheme, an ter free deposit of lesser amount is taken and also annual rent is charged. 99% customers ahave opted scheme 1. terst free deposit is refudable at the time of surrender of locker. The assessg officer is of the opion that difference deposit amount of scheme no 1 and 2 is a discounted come and hence should be taxed the year of its receipt and this can be cimed back as an expenditure the year of its refund. Please advise whether this stand iscorrect. Any case w this regard may also be advised '

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