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2015 (10) TMI 819 - HC - Income TaxInterest on investments in corporate bonds - whether fell within the scope of the definition of 'interest' in Section 2(7) of the Interest Tax Act, 1974 ? - Held that:- If the case on hand had arisen solely out of the Income Tax Act, 1961, we would not look into the definition of the expression 'interest' under the Interest Tax Act, 1974. The case on hand has arisen out of the provisions of the Interest Tax Act, 1974. Apart from defining the expression 'interest' in Sub-Section (7) of Section 2, the Interest Tax Act also contains another indication under Sub-Section (10) of Section 2. Under this Sub-Section, the Interest Tax Act, 1974 makes it clear that only those words and expressions used in that Act, but not defined therein, would have the same meaning assigned to them in the Income Tax Act, 1961. Therefore, it is only in cases where an expression is not defined in the Interest Tax Act, 1974, for the purpose of application of the said Act that we have to borrow the definition of the same expression in the Income Tax Act, 1961. This case is not of the said type. Therefore, we are of the view that the decision of the Supreme Court in Sahara India Savings and Investment Corporation Limited [2009 (11) TMI 25 - SUPREME COURT OF INDIA] wherein held that for the purpose of Interest Tax Act, 1974, interest on loans and advances will not cover under Section 2(7), interest on bonds and debentures bought by an assessee as and by way of investment. The Court clarified that interest on investments is not taxable as interest under Section 2(7) of the Act is squarely applicable to the facts of this case. - Decided in favour of the assessee
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