Home Case Index All Cases Income Tax Income Tax + HC Income Tax - 2014 (9) TMI HC This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2014 (9) TMI 429 - HC - Income TaxInterest Tax - Scope of definition u/s 2(5A) of 2(5B) – According to AO assessee is a financial corporation advancing loans to other institutions for earning interest - Whether the Tribunal was right in holding that the assessee does not fall within the definition in either Section 2(5A) or 2(5B) of the Interest Tax Act – Held that:- Though principally the assessee company is embarked in the promotion of industries in the State of Tamil Nadu, it assists and finances any industrial undertaking, project or enterprise; and also grants or guarantees loans or advances to any company, association or concern engaged in any industry - CIT(A) rightly was of the view that the assessee company would come within the purview of financial company in terms of Section 2(5A)(iv) of the Interest Tax Act, which is more fully defined under Section 2(5B) of the Interest Tax Act, is justified. The Tribunal has misdirected itself to conclude that the primary intention of the assessee company is to promote development of industries and not financial company - the facts culled out by the CIT(A) and the claim made by the assessee u/s 36(1)(viii) of the Act make it clear that the character of the assessee company is also a financial company , as defined u/s 2(5B) of the Interest Tax Act - the nature of business conducted by the assessee and the transaction of finance, for which interest has been received for all the assessment years running to several crores of rupees, establishes that the assessee is also engaged in the business of financial company - the interest earned by the assessee company is liable to tax under the provisions of the Interest Tax Act - the assessee is a credit institution falling within the definition of financial company u/s 2(5B) of the Interest Tax Act – Decided in favour of revenue.
|