TMI Blog2015 (7) TMI 53X X X X Extracts X X X X X X X X Extracts X X X X ..... bentures and loans and advances. The legislature has not provided for inclusion of interest earned from bonds and debentures within the purview of the Interest Tax Act. If we look at the object sought to be achieved by the Act as discussed by the Bombay High Court in the case of Discount and Finance House of India Ltd.(2002 (12) TMI 72 - BOMBAY High Court ), the object cannot be achieved by roping in interest earned from debentures and bonds. The view taken by the learned Tribunal is a perfectly justified view and no interference is called for. The question no.1 is answered in the affirmative. - ITA 313/2005 - - - Dated:- 11-3-2015 - GIRISH CHANDRA GUPTA AND ARINDAM SINHA, JJ. Ms. S. Das Dey, Adv. for appellant Mr. S. Das, A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ir Lordships, inter alia, held as follows: This has been discussed in the judgment of the Division Bench of this court to which one of us (S.H.KAPADIA,J.) is a party in the case of Unit Trust of India v. P.K. Unny [2001] 249 ITR 612 (Bom). Therefore, the Act is enacted for two-fold purposes, namely, as an anti-inflationary measure and, secondly, to augment the revenue. In the said judgment of the Division Bench of this court in the case of Unit Trust of India [2001] 249 ITR 612, it has been held that interest-tax is a special tax. It operates as an indirect levy on the borrower. This is indicated by section 26C of the Act which lays down that a lender can modify the existing agreement so as to pass on the burden of interest-tax to th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h bonds and debentures it does not affect the money market at all. The legislature was aware of these economic considerations and, therefore, consciously did not include interest on securities while amending definition in 1991. When the main definition does not include interest on securities merely because the specific exclusion is deleted, its automatic inclusion in the main definition cannot be inferred. There is no scope for any intentment. The deletion of the specific exclusion of the interest on securities is merely to remove the ambiguity and also because the head interest on securities has since been deleted in the Income Tax Act. The insertion of the definition of the term interest on securities in section 2(28B) of the Incom ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and includes- (a) commitment charges on unutilised portion of any credit sanctioned for being availed of in India; and (b) discount on promissory notes and bills of exchange drawn or made in India, but does not include- (i) interest referred to in sub-section (1B) of section 42 of the Reserve Bank of India Act, 1834 (2 of 1934); (ii) discount on treasury bills. In the earlier version of Interest-tax Act, any amount chargeable to income-tax, under the Income-tax Act, under the head Interest on Securities was specifically excluded. 3. The Board have been advised that by not incorporating such exclusionary provision in the present version of the Interest-tax Act, the natural meaning of the word interest as defined in sec ..... X X X X Extracts X X X X X X X X Extracts X X X X
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