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2015 (2) TMI 369 - HC - Income TaxApplicability of the provisions of Interest Tax Act - amount claimed as processing charges was in fact interest, and liable to be treated as such for the purposes of the Interest Tax Act, 1974 as per AO - ITAT held that the financing charges could not be treated as interest - Held that:- In order to support the conclusions, the AO ought to have made further enquiries such as what was the ordinary rate which the assessee charged from non-members for similar services and what did other similar placed companies or entities charge from their members or borrowers. The conclusions, based on mere suspicion in such circumstances, could not have withstood the scrutiny of law. However, the Appellate Commissioner chose to give partial relief, based, again, on a similar line of logic. However, this cannot result in our holding that the ITAT can be faulted in its conclusions. As to whether charges or amounts received from borrowers or subscribers of schemes, are truly, “interest” necessarily has to be dependent on a fact to fact determination, and cannot rest on the suspicions of the revenue officials. Another important factor in the present case is that these financial charges were one time charges and were not recurring. - Decided against revenue.
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