TaxTMI 
TaxTMI 
TaxTMI 
2011 (1) TMI 530
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....n the return of income under the Income-tax Act, 1961 it showed the following components of income : Rs. (A) Lease charges 40,86,85,186 (B) Hire-purchase charges 32,64,89,358 (C) Bill discounting charges 1,91,48,614 5. The assessee did not, however, file any return of interest under the Interest-tax Act, 1974 (for short "1974 Act"). The Assessing Officer served a letter on the assessee asking the assessee to explain the reasons for not filing the interest-tax return for the assessment year 1995-96. A reply was filed by the assessee on October 15, 2003 requesting the Assessing Officer to withdraw his letter, as the assessee claimed that it was not liable to file returns under the 1974 Act. On March 31, 2005, a notice under se....
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....the principal business, such as turnover, capital employed, etc., it was held by the Commissioner of Income-tax (Appeals) that the assessee carried on hire-purchase business activity and bill discounting activity as the principal business and, therefore, the assessee constituted a "credit institution" as defined under section 2(5A) of the 1974 Act and was, therefore, taxable under the 1974 Act. However, after coming to the conclusion that the reopening of the proceedings was valid and that the assessee constituted a credit institution, the Commissioner of Income-tax (Appeals) went into the merits of the case and came to the conclusion that the transactions entered into by the assessee were not financing transactions as the ownership of the ....
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....the Commissioner of Income-tax (Appeals) the assessee as well as the Department went in appeal(s) to the Tribunal which held that the Department was justified in confirming the validity of action under section 10 of the 1974 Act. On the question as to whether the assessee was a "financial company" as defined under section 2(5B) it was held that the assessee was not a finance company and, therefore, it did not fall within the definition of "credit institution" as envisaged in section 2(5A) of the 1974 Act and, therefore, it fell outside the purview of the 1974 Act. That, bill discounting charges were taxable under the 1974 Act. That the plea of the assessee that such charges were not covered by the definition of the word "interest" was not a....
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....s or operational leases or both. Aggrieved by the decision of the High Court, the assessee has come to this court by way of these civil appeals. 7. What we find from the judgment of the High Court is that the High Court has not examined whether the transactions entered into by the assessee constituted financial transactions so as to attract the provisions of the 1974 Act. As stated above, the issues which arose before the authorities below covered a wide spectrum, namely, reopening of the proceedings, the nature of the business carried on by the assessee, whether the assessee was a credit institution as defined in section 2(5A) of the 1974 Act and on the merits of the case whether the Assessing Officer was right in taxing the hire-purchase....