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seeking an increased deficiency. Therefore, respondent has the
burden of proof on the issue. Rule 142(a).
The amounts of both checks would be gross income derived
from interest according to the terms of Mr. Premji's arrangement
with M&L. See sec. 61(a)(4); Deputy v. DuPont, 308 U.S. 488, 498
(1940); sec. 1.61-1(a), Income Tax Regs.
An item of gross income shall be included in the taxable
year when received by the taxpayer unless under the taxpayer's
method of accounting the amount is properly reported in a
different period. Sec. 451(a). For a cash receipts and
disbursement method taxpayer, an item is includable in gross
income when it is actually or constructively received. Sec.
1.451-1(a), Income Tax Regs.
Income is constructively received in the taxable year during
which it is credited to the taxpayer's account, set apart for him
or otherwise made available so that the he may draw upon it at
any time. Sec. 1.451-2(a), Income Tax Regs. However, income is
not constructively received if the taxpayer's control of its
receipt is subject to substantial limitations or restrictions.
Id.; see also Hornung v. Commissioner, 47 T.C. 428, 434 (1967).
A check that is not subject to substantial restrictions and
that the taxpayer could have cashed is income when the check is
received. Kahler v. Commissioner, 18 T.C. 31, 34 (1952) (citing
Estate of Spiegel v. Commissioner, 12 T.C. 524, 529 (1949)). It
follows that where the payor lacked funds to make the payment,
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