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2012 (11) TMI 888 - HC - Income TaxInterest Tax Act, 1974 – whether assessee is financial company or a credit institution in terms of Section 2(5B), 2(5A) of the Interest Tax Act, 1974 – principal business of the assessee - whether the interest earned under the three heads namely, lease charges, hire purchase charges and bill discounting charges were chargeable to tax under Interest Tax Act, 1974. In the Present case, leasing transactions of the assessee constitutes only 29 per cent of the business activity of the assessee – company. Therefore, the assessee company cannot passibly be brought within the scope of section 2(5B) clause(iv) of the Act and is not fulfilling the condition that it is carrying on two or more such financial activities to qualify under clauses (i) to (va) of Section 2(5B) of the Act being the exclusive activity of the assessee-company. This is obvious on perusal of the assessment order, which indicates that different activities from which, the assessee has earned income - In such circumstances Tribunal is not in error in concluding that the respondent - company is not liable to tax under the Act as it does not fit into the definition of a financial Company within the scope of any of the clauses of sub-section (5B) of Section 2 of the Act - against revenue. Validity of reopening of the assessment – Held that:- As the main matter itself has been decided against the revenue, the question relating to reopening of assessments becomes academic and does not survive for an independent answer – appeal dismissed answering the substantial question of law in favour of the respondent assessee and against the appellants revenue.
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