2005 (10) TMI 51

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....al is directed against the order of the Income-tax Appellate Tribunal in I.T.A. No.70/Mds/2001, dated May 9, 2005. The Revenue is the appellant. The assessment year involved is 1995-96. The case of the appellant is that the assessee/respondent herein is a scheduled bank engaged in the business of banking. In the interest-tax assessment, the Assessing Officer made an addition on account of inter....

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....e investment, interest on bonds, interest on treasury bills and interest received on investment deposit scheme-IDBI would not be subject to tax under the Interest-tax Act?" It is fairly conceded by learned counsel appearing for the Revenue that the issue raised in the above question is covered against the Revenue by the decision of the Bombay High Court in Discount and Finance House of India Lt....

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....rms part of the definition section. It defines the word 'interest' to mean interest on loans and advances including commitment charges, discount on promissory notes but excluding discount on treasury bills. Section 2(7), read in the context of section 26C, which permits the lender to modify the existing agreement so as to pass on the burden of interest-tax to the borrower, shows that 'interest' in....

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....ities will not fall within the meaning of the expression 'interest on loans and advances' under section 2(7). The deletion of the exclusionary clause by the Finance (No. 2) Act of 1991 would have no effect on section 2(7) as the exclusionary clause was only clarificatory in nature. ... (i) that interest-tax was not leviable on the interest received from the RBI on dated Government securities an....