TaxTMI 
TaxTMI 
2015 (2) TMI 328
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....annot be charged on interest received on trade advances? 2.1. The brief facts of the case are as under: The assessee is a finance company. It received interest on advances made for the purchase of goods. During the relevant assessment year, the assessee company has recognised a sum of Rs. 3,61,98,668/- as interest on trade advances. The claim of the assessee that the interest earned is not on loans and, therefore, interest tax is not exigible was rejected by the Assessing Officer and accordingly, the interest earned by the assessee was brought to tax. 2.2. Aggrieved by the said order, the assessee appealed to the Commissioner of Income Tax (Appeals), who, confirmed the order passed by the Assessing Officer. 2.3. Calling into question the....
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....rated Finance Co. Ltd., (2011) 339 ITR 391, considered a similar plea raised by the assessee and held as under: 12. Keeping this distinction in the background, as already pointed out, the case of the assessee herein is that it advanced money to the manufacturing company for the purchase of the machinery. On the advance thus made, for the delay in delivery, the manufacturing company was stated to have paid interest. The advance paid was adjusted against the purchase price. Thus the advance paid to the supplier was not for earning interest to be repaid at a later point of time. The Revenue does not deny this that the amount given was a trade advance to....