2006 (1) TMI 112

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....ed counsel for the respondent. This appeal under section 260A of the Income-tax Act, 1961 has been filed by the Revenue challenging the order passed by the Commissioner of Income-tax (Appeals) as well as the Income-tax Appellate Tribunal, by means of which the order passed by the assessing authority which has assessed the amount of total chargeable interest at Rs. 68,10,23,228 was under section 8....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....under section 2(7) of the Interest-tax Act prior to October 1, 1991, and by comparing the definition given thereafter says that a substantial question of law arises in the appeal, viz., since in the earlier definition the interest on security was specifically excluded from the definition of interest which provision has been deleted or dropped in the subsequent definition, therefore the amended def....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....w is involved. The Tribunal has relied upon the judgment of the Allahabad High Court. The same question arose before the Bombay High Court in the case of Discount and Finance House of India Ltd. v. S. K. Bhardwaj, CIT [2003] 259 ITR 295 saying that section 2(7) is to be read in the context of the scheme of the Act which means that tax on the amount received from the RBI cannot be levied under the....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....est on securities fall within the meaning of 'interest chargeable to tax' as defined under section 2(7) of the Interest-tax Act, 1974. Moreover, requirements of tax deduction at source from interest on securities as per section 193 of the Income-tax Act makes it clear that interest on securities is chargeable to tax under the Interest-tax Act, 1974?" The Bombay High Court in this case considered ....