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2015 (5) TMI 118 - HC - Income TaxLease rental on the lease of certain assets - Addition made to chargeable interest under Section 2(7) of the Interest Tax Act - ITAT deleted addition - Held that:- Considering the various clauses in the agreement entered into between the assessee and the lessee reproduced hereinabove and the intention of the parties and the observations made by the Hon'ble Supreme Court in the case of Asea Brown Boveri Ltd. (2004 (10) TMI 325 - SUPREME COURT OF INDIA) we are of the opinion that the transaction by the assessee - lessor and lesseee is in substance a financial lease/transaction and therefore, the assessee is liable to pay the interest tax on the interest component. The learned Tribunal has materially erred in not treating/considering the transaction between the lessor and lessee as a financial lease/finance transaction and consequently, materially erred in holding that the assessee is not liable to pay the interest tax on the interest component. Thus ITAT has materially erred in treating the transaction entered into by the assessee in the form of agreement as a Lease Agreement. As observed hereinabove, in substance, the transaction is a financial transaction and the agreement is a Finance Agreement and therefore, the assessee is liable to pay the Tax on interest as defined under Section 2(7) of the Act on the finance interest component which even according to the assessee would be ₹ 1,03,47,165/-.- Decided against the assessee.
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