Interest-tax Act, 1974--Hire-purchase transactions--Taxability of hire-charges as interest_Instructions--Regarding

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....x, All Directors General of Income-tax. Subject : Interest-tax Act, 1974 Hire-purchase transactions Taxability of hire-charges as interest Instructions--Regarding. In Board's Circular No. 738, dated 25-3-1996*, it was stated that hire-purchase transactions entered into by the hire-purchase companies and other credit institutions are generally in the nature of financing transactions and he....

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....ax. 3. As to what constitutes a transaction in the nature of hire-purchase, the Assessing Officer should consider the issue on merits taking into account, inter alia, the following facts and circumstances : (i) The terms of the agreement ; (ii) The nature of the arrangement between the supplier of the asset, the hire-purchase company and the end-user of the asset. (iii) The intention o....

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....documents, anterior to and independent of a subsequent and distinct hiring to the vendor, the transaction, may not be regarded as a loan transaction even though the reason for which it was entered into was to raise money . . ." ". . . the intention of the appellant in obtaining the hire-purchase and the allied agreements was to secure the return of loan advanced to their customers, and no real ....