Income from security deposit was taxable in the year of termination of dealership agreement

ACIT Vs Jojo Frozen Foods Private Limited (ITAT Cochin) Conclusion: Amount paid as security deposit was taxable only on the year of termination of an agreement between the assessee and the dealer/distributor. Hence AO was not justified in treating the deposit as income each year irrespective of whether the dealership was terminated or not. Held: Assessee-company was a manufacturer and dealer of ice cream and frozen foods, was giving freezers to its dealers/distributors for storing the ice cream. For giving the freezers, assessee was collecting deposits, which were refundable on termination of...