2012 (2) TMI 352

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....Act, 1974 and as such was not a taxable entity for the purpose of Interest Tax Act, 1974? (b) Whether the ITAT was correct in law in holding that for deciding principal business of a taxable entity under the Interest Tax Act, 1974 only receipt from business is the criteria and the other parameters as the turnover, capital employment, head-count of persons employed in each line of business activity etc. are not relevant? (c) Whether the order of ITAT is perverse as it has ignored several factual aspects of the decisions relied upon by the CIT(A) in its order?" 2. These questions of law were disposed of by judgment dated 30.10.2009. For the sake of convenience paragraph 17 of the said judgment is reproduced below : "17. For this, matter wil....

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.... back to the AO for fresh determination keeping in view correct criteria as stated in this order." 3. The respondent-assessee thereafter preferred a special leave to appeal which was admitted and Civil Appeal No.556-559/2009 were registered. The appeals were disposed of vide order dated 14th January, 2009. The Supreme Court, in its detailed order, noticed that several aspects arise for consideration. First aspect was whether the assessee was a financial company as defined in Section 2 (5B) of the Interest Tax Act, 1974. This requires examination of two issues namely whether clauses (i) to (vi) of Section 2(5B) were applicable and what was the principal business of the respondent-assessee. The second aspect was whether the interest earned u....

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....f business etc. 6. However, the CIT(Appeals) held that amount received under the hire purchase agreements were not in the nature of finance or in the nature of advance on loan and therefore cannot be brought to tax under the Act. Similarly, the lease charges cannot be brought to tax under the Act. He, however, held that the "interest" on bill discounting was taxable. 7. The assessee and the Revenue preferred cross-appeals before the Tribunal. The Tribunal in the cross-appeals examined the total receipts received under the head hire purchase charges, lease charges and bill discounting charges. We may note here that the tribunal in the impugned order has referred to the net receipt from hire purchase charges and not the gross receipts. Ther....

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....nature of the transactions entered into by the assessee and the three components of the receipt of the assessee under the 1974 Act. (see page 98 of the S.L.P. Paper Book). As stated, several questions stood raised in the appeal(s) filed by the assessee as well as by the Department. Some of the findings are findings of fact, others are giving rise to substantial question of law. The main question which arose for determination in this case was "whether the receipt from lease charges, from net hire-purchase charges and bill discounting charges could be taxed under the 1974 Act. This is apart from the question as to whether the assessee which is a non-banking financial company is a credit institution under Section 2(5A) of the 1974 Act. We are....