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Commissioner of Income Tax Versus Sumeru Leasing & Finance Ltd.

2016 (8) TMI 320 - GUJARAT HIGH COURT

Finance company within the meaning of Section 2(5B) of the Interest Tax Act - Held that:- The principle business of the assessee was in either of the two activities i.e., hire purchase loan business of investment business, the individual activity being less than 50%. The combined percentage of these two activities is 58.67% but by virtue of definition of clause (vi) of the residuary definitions of the Finance Act in section 2(5B), for a miscellaneous finance company, that is to say, a company wh .....

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finance company and not liable to interest tax Act. - Appellate tribunal is right in law and on facts in holding that the assessee company is not a finance company within the meaning of Section 2(5B) of the Interest Tax Act - Tax Appeal No. 1175, 1176, 1177, 1178 of 2008 - Dated:- 11-7-2016 - KS Jhaveri And G. R. Udhwani, JJ. For the Appellant : Nitin K Mehta, Advocate For the Opponent : Mrs Swati Soparkar, Advocate Date : 11/07/2016 JUDGMENT ( Per Honourable Mr. Justice KS Jhaveri ) 1. By .....

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ing of Section 2(5B) of the Interest Tax Act? 3. The brief facts of the case are as under :- The assessment u/s. 8(3) r.w.s. 10 of the Interest Tax Act were finalized on 28.03.2003 in the case of the assessee on a total income of ₹ 75,33,688/- after making for the assessment year : 1998-1999, addition on account of interest of ₹ 52,05,601/-, addition on account of bill discounting charges of ₹ 18,42,606/- and addition on account of hire purchase charges of ₹ 4,85,461/-. I .....

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y the Department and partly allowed the appeal filed by the assessee and held that the assessee is a not a company within the meaning of Section 2(5B) of the Interest tax Act. 4. Learned Counsel for the appellant - Department has submitted that the assessee - company is covered within the provisions of Income Tax Act within the meaning of Section 2(5B) of the Act. The assessee had also applied for NBFC status. It is further submitted that during the assessment proceedings, the assessee had submi .....

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the above, it is submitted that this Court should interfere in the order dated 26.10.2007 of the Tribunal. 5. On the other hand, learned Counsel appearing for the respondent - assessee has submitted that the Tribunal has given cogent and convincing reasons to arrive at the conclusion that the assessee cannot be a company chargeable under the Interest Tax Act. Relevant part of the findings of the Tribunal which as under :- 11. The Tribunal in the case of Pinnacle Finance Ltd. (supra) held in para .....

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0% though individual share of these two activities is less than 50%. In these circumstances, in our opinion, it cannot be said that the principle business of the assessee was in either of the two activities i.e., hire purchase loan business of investment business, the individual activity being less than 50%. The combined percentage of these two activities is 58.67% but by virtue of definition of clause (vi) of the residuary definitions of the Finance Act in section 2(5B), for a miscellaneous fin .....

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