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2014 (12) TMI 682 - HC - Income TaxFactoring charges to be treated as interest or not Applicability of section 194A Disallowance u/s 40(a)(ia) Held that:- The Tribunal was rightly of the view that the interest is a term relating to a pre-existing debt, which implies a debtor creditor relationship - unpaid consideration gives rise to a lien over goods sold and not for money lent relying upon Bombay Steam Navigation Co. Pvt. Ltd. vs. CIT [1964 (10) TMI 12 - SUPREME Court] wherein it is held that, where interest on unpaid purchase price was not treated as interest on loan - before any amount paid is construed as interest, it has to be established that the same is payable in respect of any money borrowed or debt incurred - discounting charges of Bill of Exchange or factoring charges of sale cannot be termed as interest as such no question of law arises for consideration Decided against revenue.
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