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2016 (7) TMI 1047 - HC - Income TaxDeposits with SAIL - whether amounted to loan and/or advance within the meaning of Section 2(7) of the Interest Act as amended with effect from 1st October, 1991? - Held that:- When a definition uses an expression means and that is followed by "interest on loans and advances‟ it should be considered as being exhaustive of the entire definition. However, the legislature has intended to 'include' other two transactions under the definition. Those two transactions do not include interest on deposits. It is not therefore possible to accept the submission of Mr. Manchanda that the expression “interest on loan and advances”, occurring in Section 2(7) of the Act should include „interest on deposits‟ as well notwithstanding that there is no reference to such interest in the definition itself. The Special Bench of the ITAT was conscious of this submission made before it and has rejected it and in view of this Court rightly. What the ITAT appears to have done in the impugned order is to re-characterise the contract entered into between HUDCO and SAIL for the purpose of the former placing deposits with the latter as a loan transaction. There was no occasion for the ITAT to do so only with a view to bringing it within the definition of Section 2(7) of the ITA, when the plain language of the statute does not contemplate interest on deposits as being included. Apart from the above, the Special Bench of the ITAT has answered the question in favour of HUDCO for the AYs 1992-93, 1993-94, 1996-97. The present appeals pertain to AYs 1994-95 and 1995-96. Therefore, applying the rule of consistency, the Court holds that there is no reason why the Revenue should not be asked to follow the judgment rendered by the Special Bench of ITAT which view has been accepted by it and has attained finality. - Decided in favour of the Assessee and against the Revenue
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