TaxTMI 
TaxTMI 
2014 (12) TMI 305
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....x Act, 1961 has been filed against the common judgment and order dated 24.02.2005 passed by the Income Tax Appellate Tribunal, Ahmedabad Bench in ITA No.60/AHD/2014 to 64/AHD/2014 whereby, all the appeals filed by the assessee were treated as allowed for statistical purposes. For the sake of convenience, Tax Appeal No.1805/2005 is taken as the lead matter. 3. Briefly stated, the facts are that on 14.03.2002 the respondent-assessee was served a Notice u/s.10 of the Interest Tax Act, 1974 asking to file a return of chargeable interest since it was noticed that the assessee-company was a Finance Company earning interest income from loans advanced by it. The said Notice was duly served upon the assessee on 22.03.2002. During the year under c....
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....ls were admitted by this Court vide common order dated 07.09.2006 on the following substantial questions of law; "(A) Whether the Appellate Tribunal is right in law and on facts in directing the Assessing Officer to exclude the interest earned by the assessee company on the deposit made with other concerns while computing the chargeable interest of the assessee u/s.4 of the Interest Tax Act, 1974? (B) Whether the Appellate Tribunal is right in law and on facts in directing the Assessing Officer to include the net interest only received by the assessee company on refinancing, for the purpose of computing the total chargeable interest under the Act, despite the clear provisions of Explanation to sec....
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....ould be deposits and the interest thereon would not be chargeable interest under the Interest Tax Act, 1974? So far as the Question No.1 is concerned, the tribunal has considered the issue as under: We find force in the contention of the Ld. Counsel. Section 2(7) of the Income Tax Act defines as under: 7) Interest means interest on loans and advances made in India and includes - (a) commitment charges on unutilised portion of any credit sanctioned for being availed of India: and (b) discount....
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.... assessee has no discretion in respect of any part of the transaction, therefore, such transaction was considered as an integral and the interest accruing to the assessee was considered as arising from the entire transactions. It has been further held that the assessee is liable to interest tax only on the net interest received by it. Therefore, in view of that, we are of the opinion that the learned CIT (A) has deleted the addition after following a number of decisions. We find no error in the order of learned CIT (A). Hence, this ground of appeal is rejected in all the Asst. Years." So far as the Question No.3 is concerned, the tribunal has considered the issue as under: ....
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....sp; Before us, the learned counsel for the assessee relied upon three decisions of ITAT reported in 09 ITD 520(DEL) in the case of Oriental Insurance Co., 82 ITD 749 (Mum) in the case of Life Insurance Corporation and 87 ITD 11 (Del) in the case of Punjab National Bank wherein the Tribunal has pointed out disparity in expression Loans and Deposits while discussing the difference of meaning in the expression Loans and Deposits, the Tribunal in the case of Oriental Insurance Co., vs. DCIT reported in 89 ITD 520 (Del) (Supra) observed as under - "In view of the above provisions, the case of the revenue is that deposits with banks and other institutions would fall....
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....9SS prohibits acceptance of loan or deposits in cash exceeding the prescribed limit. Section Z69T prohibits the repayment of the deposits in cash exceeding the prescribed limit. It is apparent from these provisions that repayment of the loan in cash is not prohibited. Consequently, no penalty is leviable under Section 271E where repayment of loan is made in cash. On the other hand, penalty is leviable under Section 271E, if deposit is repaid in cash exceeding the prescribed limit. Thus, it is apparent from these provisions that even the legislature has recognizes the distinction between the loan and deposit." Following the above decision, we find mer....