2006 (9) TMI 109

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..... Appellate Tribunal, Chandigarh Bench, arising out of its order dated May 17, 1993, in respect of the assessment years 1977-78 to 1979-80 and 1981-82 to 1986-87: "Whether, on the facts and in the circumstances of the case, the Appellate Tribunal is right in law in holding that the amount of liquidated damages received by the assessee by way of compensation on account of delay in payments beyond t .....

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..... 900 1978-79   62,80,210   1979-80   18,52,291   1981-82   39,83,346   1982-83   81,29,854   1983-84   1,06,04,611   1984-85   52,40,185   1985-86   56, 74,535   1986-87   20,03,457".     3. On appeal, the Commissioner of Income-tax (Appeals) reversed the view of the Assessing Offi .....

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..... Indore [1988] 172 ITR 24, observed as under (page 610) "When the bank discounts a bill, what happens is that the drawee gets a credit from the bank to the extent of the amount covered by the bill. This position has been explained in Law of Banking by Paget, 9th edition, at page 415, thus 'The discount of a bill is the purchase of it with, normally, a right of recourse and for a sum less than it .....

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..... d to be sent along with the intimation of discount which showed that in case of delayed payment, overdue interest at a particular rate had to be collected, if not paid on presentation. These facts are sufficient to hold that the amount in question is interest under section 2(7) of the Interest-tax Act. It is settled law that interest is damages or compensation for delayed payment of money due. Th .....

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..... t discounting of bills is not a means of lending. In any event, in the present case, there is a specific agreement between the parties to pay overdue interest at a particular rate if the amount is not paid on presentation of the bill within the time stipulated. When there is an agreement between the parties to pay interest, no other question would arise for consideration at all. Therefore, on this .....

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