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2010 (4) TMI 49 - HC - Income TaxInterest received on sub-loan –Interest . KFW Germany had entered into an agreement with the Government of India for financing housing schemes for economically weaker sections. Consequently, funds were made available to the Government of India and the same were canalised through the assessee [HUDCO]. The assessee, in turn, gave loans to suitable agencies, such as NGOs, which were to be selected by the assessee on the criteria prescribed by KFW Germany, the interest thereon would be taxable in the hands of the assessee. – held that – The assessee never became the owner of the funds given to it under the project agreement. Nor could the assessee use the funds for anything other than the specified purposes and in the specified manner - interest earned on sub-loans granted by the assessee did not become its income - Decision in favor of assessee – against the revenue
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