TMI Blog2008 (3) TMI 305X X X X Extracts X X X X X X X X Extracts X X X X ..... 5, 138 of 2003 and ohers - - - Dated:- 4-3-2008 - C. N. RAMACHANDRAN NAIR and T. R. RAMACHANDRAN NAIR JJ. I. T. A. Nos. 107, 113, 114, 116, 125, 138, 148, 244, 288, 293, 294 of 2002 28 of 2003 P. K. R. Menon for the appellant. P. Balachandran and Smt. Preetha S. Nair for the respondents. JUDGMENT The judgment of the court was delivered by C. N. RAMACHANDRAN NAIR J. - These appeals filed by the Revenue under section 260A of the Income-tax Act, 1961, are against the common order of the Tribunal holding that interest-tax is not payable under the Interest-tax Act, 1974, as amended by the Finance (No. 2) Act of 1991, on interest on Government securities received by the respondent-banks. We have heard senior counsel app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hargeable to income-tax under the Income-tax Act under the head 'Interest on securities'." As per the Interest-tax Act, 1991 "2.(7) 'interest' means interest on loans and advances made in India 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, 1934 (2 of 1934); (ii) discount on treasury bills." 3. Counsel for the Revenue contended that after the exclusion clause is removed through the amendment in 1991, interest on securities falls within the definition of "interest ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rent securities. It is to be noted that right from the assessing authority to the Appellate Tribunal no one has considered the nature of Government securities which yielded the income to the assessee. Counsel for the assessees contended that interest on Government securities under no circumstances could be brought to tax as interest under the Interest-tax Act. According to him, there is no difference between securities of a permanent nature and current securities and it is contended that all securities are permanent. We do not think the distinction drawn by standing counsel for the Revenue between securities of a permanent nature and current securities has any relevance because what attracts tax under the Act is interest received on loans a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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