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2011 (6) TMI 150 - ITAT, INDOREDisallowance - Discounting charges - Provisions of section 40(a)(ai) - that Hindustan Motors Limited was raising bill of exchange, which was discounted by HHFL after charging discounting charges thereon. Such bills were raised in respect of vehicles supplied to the assessee. Therefore, the assessee was reimbursing discounting charges to HHML - Held that:- as per the issue with regard to nature of discounting charges has been elaborately discussed by the ITAT, Delhi Bench in the case of Asstt. CIT v. Cargill Global Trading (I)(P.) Ltd. (2009 -TMI - 63859 - ITAT DELHI-B), wherein after relying on the decision of Hon'ble Gujarat High Court in the case of CIT v. Vijay Ship Breaking Corporation (2003 -TMI - 11906 - GUJARAT High Court), it was held that discounting charges on the bill of exchange is not in the nature of interest - thus, the Assessing Officer was not justified in treating such discounting charges as interest for disallowing the same by invoking the provisions of section 40(a)(ai) of the Income-tax Act, 196 - Decided in favour of assessee.
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