JUDGMENT :

The respondent-assessee opened a public issue of shares on 29.01.1992. The date of closure of this issue was 03.02.1992. Proceeds which were received from the applicants to the share capital were deposited in the Bank in 46 days as per the requirement under law. The shares were ultimately allotted in June, 1992. Those who were not allotted the shares, their application money was refunded along with interest. As mentioned above, the proceeds which were collected from the intending subscribers were kept in Bank for 46 days and on this the assessee earned an interest of Rs. 1,83,31,363/-.

2. The Assessing Officer wanted to tax the aforesaid interest income in the Assessment Year 1992-1993 as the money was received between 29.01.1992 and 03.02.1992 and the interest earned thereupon in the said Financial Year. On the other hand, the assessee maintained that since the shares were allotted only in June, 1992, i.e., during the Financial Year 1993-1994, and as per Section 73 of the Companies Act, the assessee was required to keep the money in Bank account, interest has accrued to the assessee only on the allotment of the shares as before that the amount was kept in trust by the ass