2007 (2) TMI 135

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....hether on the facts and circumstances of the case, the Hon'ble ITAT was right in law in allowing deduction of Rs. 3,50,36,152/- on account of interest on delayed payment of shares received by the assessee from various collaborators in view of the fact that in Section 2 of the Interest Tax Act, for the purpose of chargeability, interest is defined as "interest on loan and advances made in India" and also in view of the fact that the scope of Section 5 of Interest Tax Act is very wide and only specific items excluded are interest on loans and advances given to other institutions and interest on loans given to any other cooperative society, engaged in the carrying of the business of banking?" 2. Briefly the facts are that the assessee, which ....

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....on delayed payment of shares was received by the assessee with various collaborators, whose projects were promoted by the assessee.  The assessee promoted them and the payment on purchase of shares were subject to payments of interest at the prescribed rate. The Assessing Officer hold that the interest received on delayed payment of shares was includable in the value of chargeable interest, consequent addition of Rs. 3,50,36,152/-which was reversed by the learned Commissioner of Income-tax (Appeals). Section 2(7) of the Interest Tax Act is very specific and sub-clause 7 speaks about the interest on loans and advances made in India which includes commitment charges on unutilized poriton of any credit sanctioned and discount of promissor....