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2014 (9) TMI 282 - ANDHRA PRADESH HIGH COURTNature of transaction – Finance or Hire purchase agreement – Applicability of section 8(3) of Interest tax act - Held that:- There existed a hire purchase agreement - the ITO went a bit deep into the contents of the agreement and on analysis of the same, he arrived at the conclusion that the transaction par takes the character of financial arrangement - such a course is not permissible - once there exists a hire purchase agreement, further questions as to how much part of the consideration of the vehicle was paid by the assessee, and what are the other terms, become immaterial - Realizing that the hire purchase agreements are very complex in nature, the Central Board of Direct Taxes issued guidelines and clarifications from time to time - The Tribunal has relied upon the clarifications issued through instruction No.1425, dated 16.11.1981- the actual contents of the hire purchase agreement and the purport thereof were discussed by the Tribunal, in detail – the order of the Tribunal is upheld – Decided against revenue.
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