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2012 (7) TMI 281 - DELHI HIGH COURTDeleting penalty u/s 13 of Interest Tax Act. 1974 - there could be honest or bona fide difference of opinion on whether discounting charges were in the nature of interest income for computation of the tax under the Act - assessee in the return had shown amount under the head “Interest others” and "bills discounting charges" but had not included in the said amount on which tax was payable - Held that:- Declaration or statement in the return that the said amounts were not included for the purpose of tax may show/establish absence of mens rea but in the present case this by itself does not justify cancellation or quashing of penalty as the ingredients of the provisions of Section 13 are satisfied - for the purpose of the Act, bill discounting charges have to be treated and regarded as ‘interest’.The term ‘interest’ as per the definition clause i.e. Section 2(7) amended w.e.f. 1st October, 1991 is absolutely clear and unambiguous and cannot be any doubt or ambiguity that ‘bill discounting charges’ have to be computed and included in interest for the purpose of tax payable under the Act. This is not the case of a bonafide, honest or even plausible different interpretation. Two divergent views on interpretation of Section 2(7) of the Act are not possible. Discount on promissory note and bills of exchange drawn or made in India by express stipulation have been included in the word ‘interest’. What is excluded is ‘discount on treasury bills’. There is no ambiguity or doubt in the said words. The single sentence observations of the CIT(A) and the tribunal to the contrary are unsustainable - in favour of the appellant Revenue
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