2002 (8) TMI 105 - HC - Income Tax

Summary

The High Court of Karnataka ruled in favor of the assessee, a nationalized bank, regarding the treatment of rediscounting charges paid to RBI and IDBI under the Interest-tax Act, 1974. The court held that the charges did not form part of chargeable interest. The judgment was based on a previous case involving the same bank for the assessment year 1975-76. The court agreed with the earlier Division Bench's interpretation of the IDBI rediscounting scheme, stating that the bank acted as a conduit for fund disbursement. As a result, the court answered question No. 1 against the Department and did not address the remaining questions.