https://www.taxtmi.com/caselaws?id=4212 Liquidated damages received for delay in payment beyond the grace period on discounted bills of exchange were treated as interest under the Interest-tax Act, because the statutory definition of "interest" includes interest on loans and advances as well as discount on bills of exchange. The Court held that discounting of bills operates in substance as an advance or loan, so any recovery for delayed payment under that arrangement remains interest despite the label used. The existence of an agreement for overdue interest on delay reinforced that characterisation, and the amount was held includible in chargeable interest. en-us Tue, 05 Sep 2006 00:00:00 +0530 Sat, 26 Jul 2008 13:41:00 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=4212 Liquidated damages received for delay in payment beyond the grace period on discounted bills of exchange were treated as interest under the Interest-tax Act, because the statutory definition of "interest" includes interest on loans and advances as well as discount on bills of exchange. The Court held that discounting of bills operates in substance as an advance or loan, so any recovery for delayed payment under that arrangement remains interest despite the label used. The existence of an agreement for overdue interest on delay reinforced that characterisation, and the amount was held includible in chargeable interest. Case-Laws Income Tax Tue, 05 Sep 2006 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=4212