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2014 (8) TMI 428 - HC - Income TaxInterest Tax - Overdue interest on the demand bills - Whether the Tribunal is correct in holding that the overdue interest on the demand bills is not chargeable to tax under the Interest Tax Act, 1974 – Held that:- The transactions on which tax was ordered to be levied are in the nature of purchase of Bills of Exchange - It is not uncommon that banks purchase Bills of Exchange from their customers and make payments, on being satisfied that they are in order - the Act covers just the interest on loans and advances, it is difficult to bring under its fold, the transaction of purchase of Bills of Exchange - Had the Parliament been of the view that a transaction purchase of bills of exchange is on par with the transactions of loans and advances and wanted to levy tax on every amount that is recovered in the form of interest, penal or otherwise, it would have certainly included such transactions in the definition clause or in the other charging sections - That is not have been done, the assessing authority cannot be permitted to widen the scope of the Act – Decided against Revenue.
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