TMI Blog2009 (12) TMI 979X X X X Extracts X X X X X X X X Extracts X X X X ..... ments were sustained in first appeal, the Tribunal held that the respondent is not assessable under the Interest Tax Act, against which these appeals are filed. 2. We have heard Senior Standing Counsel Sri P.K.R. Menon appearing for the revenue and Sri P. Balakrishnan, appearing for the respondent/ assessee. 3. The respondent is assessable to interest tax under the Act only if it falls within the definition of credit institution as defined under section 2(5A) of the Act. Since the appellants do not have a case that the respondent is a credit institution within the meaning of clause (i), (ii) or (iii ) of section 2(5A), the question to be considered is whether respondent is a credit institution by virtue of being a financial company ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ernment under section 620A of the Companies Act, 1956 (1 of 1956), to be a Nidhi or Mutual Benefit Society; (va)a residuary non-banking company other than a financial company referred to in sub-clause (i), (ii), (iii ), (iv) or (v), that is to say, a company which receives any deposit under any scheme or arrangement, by whatever, name called, in one lump sum or in instalments, by way of contributions or subscriptions or by sale of units or certificates or other instruments or in any other manner; or (vi)a miscellaneous finance company, that is to say, a company which carries on exclusively, or almost exclusively, two or more classes of business referred to in the preceding sub-clauses; Even though the respondent is admitted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessee is engaged in the business as contemplated in sub-clause (va). Even though counsel submitted that the assessee is collecting kuri subscription and paying prize amount, we do not think, the contributions or subscriptions referred to in sub-clause (va) relate to chitty subscription. In our view, the question whether the assessee would fall within the definition of finance company should be considered with reference to the object of the statute which is to levy tax on chargeable interest. Fundamentally, liability is on interest income, which as defined under section 2(7) of the Act, means interest on loans and advances made in India and also includes the nature of receipts covered by sub-clauses (a) and (b) of section 2(7 ). It i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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