TaxTMI 
TaxTMI 
2011 (5) TMI 165
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....the appellant filed its return under the Interest Tax showing chargeable interest of Rs.12,26,652/-. b) The Assessing Officer in computation of chargeable interest for the levy of the interest tax for the said period under Section 8(2) of the Interest Tax Act arrived at the figure of Rs.32,36,080/- after addition of Rs.20,09,431/- on account of bill discounting charge. c) Being dissatisfied, the assessee preferred an appeal against the said order and one of the points taken in the appeal was that the appellant was not at all chargeable to Interest Tax Act and due to mistake, the return was submitted under the said Act. d) The Commissioner of Income-tax (Appeals), however, turned down such point and held that the appellant was a Credit Institution within the meaning of Sections 2(5A) and 2(5B) of the said Act. The said appellate authority further turned down the claim of the appellant that the income from brokerage and syndicate fees could not come within the purview of interest and thus, was not chargeable under the Interest Tax Act. The appeal filed by the appellant was, thus, dismissed. e) Being dissatisfied, the appellant preferred an appeal befo....
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....ision of this Act; (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 Corporations Act, 1951 (63 of 1951); and (iv) any other financial company; (5B) "financial company" means a company, other than a company referred to in sub-clause (i), (ii) or (iii) of clause (5A), being - (i) a hire-purchase finance company, that is to say, a company which carries on, as its principal business, hire-purchase transactions or the financing of such transactions; (ii) an investment company, that is to say, a company which carries on, as its principal business, the acquisition of shares, stock, bonds, debentures, debenture stock, or securities issued by the Government or a local authority, or other marketable securities of a like nature; (iii) a h....
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....shall be three and a half per cent of such chargeable interest. (2) Notwithstanding anything contained sub-section (1) but subject to the other provisions of this Act, there shall be charged on every credit institution for every assessment year commencing on and from the 1st day of April, 1992, interest-tax in respect of its chargeable interest of the previous year at the rate of three per cent of such chargeable interest. Provided that the rate at which interest-tax shall be charged in respect of any chargeable interest accruing or arising after the 31st day of March, 1997, shall be two per cent. of such chargeable interest. "5. SCOPE OF CHARGEABLE INTEREST. Subject to the provisions of this Act, the chargeable interest of any previous year of a credit institution shall be the total amount of interest (other than interest on loans and advances made to other credit institutions or to any co-operative society engaged in carrying on the business of banking) accruing or arising to the credit institution in that previous year : Provided that any interest in relation to categories of bad or doubtful debts referred to in section 43D of the Income-tax Act shall be deem....
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....affirmed the order of the appellate authority. Thus, in this case, the appeal filed by the appellant before the Tribunal has not been dismissed only on the ground of estoppel. We, therefore, answer the first point by holding that there is no estoppel against a person for filing a return under the Act if he is otherwise really found to be not subject to the tax and at the same time, hold that the Tribunal has not dismissed the claim of the appellant solely on the ground of estoppel. 5. As regards the second point formulated by the Division Bench, we find that the appellant is definitely a "credit institution" within the meaning of Section 2(5A) of the Act being "any other financial company" within the meaning of clause (iv) of the said Section 2(5A) as it comes within the purview of at least a loan company, that is to say, a company [not being a company referred to in subclauses (i) to (iii)] which carries on, as its principal business, the business of providing finance, whether by making loans or advances or otherwise within the meaning of clause (iv) of Section 2 (5B) of the Act. It appears from its financial statements that it gives advances to others and also makes arrangemen....