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Commissioner of Income-tax Vs. Vijaya Bank

Court : Karnataka

Reported in : (1988)73CTR(Kar)16; [1989]175ITR611(KAR); [1989]175ITR611(Karn)

..... the computation of chargeable interest (2) whether, on the facts and in the circumstances of the case, the tribunal was right in holding that the subsidy received by the applicant from the reserve bank of india in respect of export credit made available by it to its constituents, would fall under the definition of interest under section 2(7) of the interest-tax act, 1974, and as such could be included in the chargeable interest under section 5 ..... the definition of the term 'interest' under section 2(7) of the interest-tax act, 1974 (hereinafter referred to as 'the act'), interest will only mean and include the ..... tax officer for the relevant years in question that this amount given as subsidy by the reserve bank of india under the scheme is not taxable because it represents the subsidy and not interest and, therefore, was not chargeable to tax under the interest-tax act ..... mode of computation of chargeable interest and it will not not indicate the character of the payment as interest. ..... is in the forms of a loan or advance, on the amount of the loan or advance actually drawn and outstanding from time to time, with periodical rests at the same intervals as for the application of interest by the institution concerned, during the period from the date of he advance or the grant of the credit, as the case may be, to the date on which the export bills in respect of the goods ..... interest paid on loans and advances and not other forms of payment that was the subject matter of tax under the said act .....

Commissioner of Income-tax Vs. Vijaya Bank

Court : Karnataka

..... was right in holding that the subsidy received by the applicant from the reserve bank of india in respect of export credit made available by it to its constituents, would fall under the definition of interest under section 2(7) of the interest-tax act, 1974, and as such could be included in the chargeable interest under section 5 ?' 2. ..... in view of the definition of the term 'interest' under section 2(7) of the interest-tax act, 1974 (hereinafter referred to as 'the act'), interest will only mean and include the amount paid on loans and advances.5 clause 2(i) of the ..... income-tax officer for the relevant years in question that this amount given as subsidy by the reserve bank of india under the scheme is not taxable because it represents the subsidy and not interest and, therefore, was not chargeable to tax under the interest-tax act. ..... be included in the computation of chargeable interest ? ..... export credit which is in the form of a loan or advance, on the amount of the loan or advance actually drawn and outstanding from time to time, with periodical rests at the same intervals as for the application of interest by the institution concerned, during the period from the date of the advance or the grant of the credit, as the case may be, to the date on which the export bills in respect of the goods or commodities ..... contended that it is only a mode of computation of chargeable interest and it will not indicate the character of the payment as interest in our view, this contention is untenable. .....

Kanoi Industries (P) Ltd. Vs. Deputy Commissioner of Income Tax

Court : Income Tax Appellate Tribunal ITAT Kolkata

Reported in : (2006)100ITD462(Kol.)

..... the ao passed the orders under section 8(2)/10 of the interest-tax act, 1974 (the act), reopening and reassessing the interest-tax chargeable on the assessee and thereby imposing liability on the assessee ..... in consequence of information in his possession, reason to believe that chargeable interest assessable for any assessment year has escaped assessment or has been underassessed or has been the subject of excessive relief under this act.from the analysis of the above provisions, it is clear that it is pre-requisite that the ao should record the reasons to the effect that interest income has escaped assessment under interest-tax act, 1974.while recording the reasons the ao must have reasons to believe ..... that the assessee was engaged in the business of jute, cloth, tea, shares and advancing of loans and advances computed under the head 'income from other sources'.the income from these businesses, other than that of interest on loan, was far more than earnings from interest on advances made. ..... that the learned ao further erred in having computed the chargeable interest without setting off the interest paid for earning of such interest received and thereby wrongly calculated chargeable interest at rs. ..... being claimed by way of additional grounds, sought to be substituted for the original ground and the same can be disposed of on the basis of material on record accordingly inasmuch as the same is also germane to the issue of computation of assessee's income in proper and correct manner. .....

Assistant Commissioner of Income Vs. Visharad Automobiles Financiers

Court : Income Tax Appellate Tribunal ITAT Delhi

Reported in : (2007)108ITD294(Delhi)

..... 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 rbi act, 1934; 9.1 therefore, "interest" in section 2(7) of the interest-tax act, 1974, means interest on loans and advances made in india, other than the two items mentioned in the section.9.2 section 4 of the interest-tax act, 1974, is the charging section.as per section 4(2) interest-tax, would be charged in respect of chargeable interest of every credit institution.9.3 chargeable interest has been defined in section 2(5) to mean total amount of interest referred to in section 5, computed in the manner laid down ..... a hire purchase financing company, carrying on hire purchase transaction as its principal business.10.1 in short, if the interest being earned by the assessee company comes within the scope of "interest" as defined in section 2(7) of the interest-tax act, 1974 and falls within "chargeable interest" under section 2(5) of the act, it shall be chargeable to interest-tax.10.2 section 5 of the act, loosely states that the chargeable interest shall be the amount of interest accruing or arising to the credit institution in the previous year.10.3 so, the broad apparent picture which emerges is that the assessee is a credit institution being a financing company .....

Commissioner of Income Tax, Kanpur Vs. Sahara India Savings and Invest ...

Court : Supreme Court of India

Reported in : (2009)227CTR(SC)425; [2010]321ITR371(SC); 2009(14)SCALE188; [2010]186TAXMAN19(SC)

..... this batch of civil appeals, the main issue which arises for determination is: whether 'interest' which the assessee earned on bonds and debentures was chargeable to tax in view of the definition of the term 'interest' in section 2(7) of the interest tax act, 1974.2. ..... the context otherwise requires,-(5) 'chargeable interest' means the total amount of interest referred to in section 5, computed in the manner laid down in section 6;(5a) 'credit institution' means,-(i) a banking company to which the banking regulation act, 1949 (10 of 1949) applies (including any bank or banking institution referred to in section 51 of that act);(ii) a public financial institution as defined in section 4a of the companies act, 1956 (1 of 1956);(iii) a state financial corporation established under section 3 or section 3a or an institution notified under section 46 of the state financial corporation act, 1951 (63 of 1951); and(iv) any other ..... (1) subject to the provisions of sub-section (2), in computing the chargeable interest of a previous year, there shall be allowed from the total amount of interest (other than interest on loans and advances made to credit institutions) accruing or arising to the assessee in the previous year, a deduction in respect of the amount of interest which is established to have become a bad debt during the previous year:provided that such interest has been taken into account in computing the chargeable interest of the assessee of an earlier previous year and the .....

Uco Bank Vs. Commissioner of Income Tax, West Bengaliii, Kolkata

Court : Kolkata

..... chargeable interest has been defined in section 2 (5) of the interest act 1974, to mean the total amount of interest referred to in section 5, computed in the manner laid down in section ..... the relevant assessment years in question, tax under the interest tax act, 1974 for the above non-operational loans, is to be held as payable in law on the mercantile accrual of interest basis, or on the basis of actual receipt of interest income on the sticky loans, if such interest at all was received in the relevant ..... court in uco bank (supra), under section 145 of the income tax act, income chargeable under the head profit and gains of business or profession or income from other sources shall be computed in accordance with the method of accounting regularly employed by the assessee, provided that in a case where the accounts are correct and complete, but the method employed is such that, in the opinion of the income tax officer, the income cannot properly be deduced ..... , in the faint hope of recovery at some future point of time, may be, by initiation of litigation, does not come within the purview of chargeable interest within the meaning of sections 5 and 6 of the interest act moreover, the proviso to section 5 of the interest act specifically provides that interest in relation to categories of bad or doubtful debts, referred to in section 43d of the income tax act, shall be deemed to accrue or arise in the previous year in which it is credited to the profit and loss account for that year. .....

Karur Vysya Bank Ltd. Vs. Inspecting Assistant

Court : Income Tax Appellate Tribunal ITAT Madras

Reported in : (1992)42ITD84(Mad.)

..... since the assessee is a banking company, under the interest-tax act, 1974, interest-tax was exigible on the chargeable interest of the assessee.further, by virtue of the provisions of section 18 of the interest-tax act, 1974, the tax payable under the said act was deductible in computing the total income of the assessee under the income-tax act. ..... the foregoing analysis will indicate that the total income of an assessee computed under the income-tax act will not cease to be the total income computed under the said act, merely because a deduction which is not available under the income-tax act has been given to the assessee by virtue of the overriding provisions of a special act, namely, section 18 of the interest-tax act 1974. ..... it is only by virtue of section 18 of the interest-tax act, 1974 that the interest-tax payable is allowable as a deduction in computing the total income under the income-tax act. ..... a harmonious construction of these provisions reveals that interest-tax payable by a bank, even though deducted from the total income by virtue of section 18 of the interest-tax act, cannot be allowed as a deduction from total income for the purpose of computing the 'chargeable profits' under the surtax act. .....

Kerala State Industrial Development Corporation Ltd. Vs. Commissioner ...

Court : Kerala

Reported in : [2000]246ITR330(Ker)

..... of the case, on account of doctrine of incorporation, section 145 of the income-tax act, 1961, having been incorporated in section 21 of the interest-tax act, 1974, when the assessee maintains books of account on cash system and being assessed under the cash system under the income-tax act does not the chargeable interest deserve to be computed on cash method and if the intention of the legislature would have been to tax on mercantile system, the legislature in their wisdom would not have included section 145 of the income-tax act, 1961, in section 21 of the interest-tax act ?2. ..... '), has referred the following questions for the opinion of this court :'(1) whether, on the facts and circumstances of the case, on account of incorporation of section 145 of the income-tax act, 1961, with effect from october 1, 1991, in section 21 of the interest-tax act, 1974, and the overriding effect of section 21 over section 5, by which the interest-tax has to be levied only on the interest income computed, based on the method of accounting regularly employed by the assessee, the appellate tribunal was correct in law in concluding that the assessing officer .....

Kerala State Industrial Development Corpn. Ltd. Vs. Commissioner of In ...

Court : Supreme Court of India

Reported in : (2003)180CTR(SC)192; [2003]259ITR51(SC); (2003)11SCC363

..... intention of the legislature would have been to tax on mercantile system, the legislature in their wisdom would not have included section 145 of the income-tax act, 1961, in section 21 of the interest-tax act ?' ..... for the assessment under the income-tax act, 1961 (2) whether, on the facts and circumstances of the case, on account of doctrine of incorporation, section 145 of the income-tax act, 1961, having been incorporated in section 21 of the interest-tax act, 1974, when the assessee maintains books of account on cash system and being assessed under the cash system under the income-tax act does not the chargeable interest deserve to be computed on cash method and if the ..... decision were (page 332) : '(1) whether, on the facts and circumstances of the case, on account of incorporation of section 145 of the income-tax act, 1961, with effect from october 1, 1991, in section 21 of the interest-tax act, 1974, and the overriding effect of section 21 over section 5, by which the interest-tax has to be levied only on the interest income computed, based on the method of accounting regularly employed by the assessee, the appellate tribunal was correct in law in concluding that .....

Additional Commissioner of Vs. Ge Capital Transportation

Court : Income Tax Appellate Tribunal ITAT Delhi

Reported in : (2006)101TTJ(Delhi)304

..... being not covered by section 5 of the interest-tax act, 1974 is not included above. ..... -98 as chargeable interest under the interest-tax act. ..... ao was, however, of the view that the investment made by the assessee in government securities was chargeable to interest-tax act. ..... 1,46,773) being interest on securities will be added to the computation of chargeable interest.4.1 similarly for asst. ..... from the details it is observed that the following amount which is otherwise chargeable to interest-tax has not been included in the computation : in its written submission filed on 19th march, 1999, the counsel for the assessee has put various arguments and tried to distinguish the hire-purchase from the finance ..... and 1997-98 has been upheld by us.hence, following the said decision of ours, we delete the addition made by the learned cit(a) by holding that interest earned on debentures and government securities is not chargeable to interest-tax. ..... is interest chargeable to interest-tax. ..... view of this it is clear that interest on securities is chargeable to interest-tax. ..... chargeable to interest-tax. ..... is to be deleted from the chargeable interest and the appellant gets relief accordingly. ..... clearly, interest on kisan vikas patras and indira vikas patras is a part of chargeable interest as the amounts in the nature of advances given to the ..... definition leaves no scope for any ambiguity that a debenture is in the nature of a loan or advance, and interest on debentures has to be included as chargeable interest. .....