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2015 (7) TMI 53 - CALCUTTA HIGH COURTInterest tax on interest on bonds and debentures - Whether Tribunal was right in holding that interest tax is not leviable on interest on bonds and debentures? - Held that:- Investment made by an assessee either in bonds or in debentures was not contemplated. What has been contemplated is loans and advances. The investment made in bonds and debentures can by no stretch of imagination be considered to be either a loan or an advance. In pith and substance, it may have some affinity with the concept of loan and advance, but it is not possible to presume that the legislature was unaware of the distinction between an investment in bonds and debentures and loans and advances. The legislature has not provided for inclusion of interest earned from bonds and debentures within the purview of the Interest Tax Act. If we look at the object sought to be achieved by the Act as discussed by the Bombay High Court in the case of Discount and Finance House of India Ltd.(2002 (12) TMI 72 - BOMBAY High Court ), the object cannot be achieved by roping in interest earned from debentures and bonds. The view taken by the learned Tribunal is a perfectly justified view and no interference is called for. The question no.1 is answered in the affirmative.
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