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Issues:
1. Inclusion of rediscounting charges in chargeable interest. 2. Inclusion of commission received on purchase of inland bills in chargeable interest. Analysis: 1. The judgment addressed the issue of whether rediscounting charges paid to the Industrial Development Bank of India by a banking company for two assessment years should be included in the chargeable interest. The Income-tax Officer had treated the charges as discount on bills of exchange, thus including them in the chargeable interest. However, the Commissioner of Income-tax (Appeals) and the Tribunal disagreed, following a previous decision related to the Federal Bank Limited's case. The court held that the profits earned by the Reserve Bank of India and the financing institution from the charges did not accrue to the assessee bank, and therefore, the charges should be allowed as deductions from the gross receipts. The court ruled in favor of the assessee, stating that the rediscounting charges were not includible in the chargeable interest. 2. The judgment also dealt with the issue of whether the commission received on the purchase of inland bills should be included in the chargeable interest. The Commissioner of Income-tax (Appeals) and the Tribunal had held that the commission was not includible in the chargeable interest, citing a previous decision related to the Federal Bank Limited's case. However, the court noted that the reasoning behind this decision was not provided in detail, as the Tribunal failed to forward its earlier judgment. Due to the lack of information on the Tribunal's reasoning, the court declined to answer this part of the question and directed the Tribunal to reconsider the matter. The court emphasized the importance of providing detailed reasoning in such cases.
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