2005 (2) TMI 34 - HC - Income Tax

Interest Tax Act 1974 - Whether Tribunal was right in law in holding that the hire purchase finance charges and service charges do not constitute chargeable interest under section 2(7) of the Interest-tax Act for the purpose of interest-tax assessment? - Appellate Tribunal has found that it is not the case of the Revenue that the hirer is the real purchaser of the asset and the assessee is only a financier to help the purchaser and such things are not coming out from the agreement. We therefore hold that the finding recorded by the Appellate Tribunal is a finding of fact and there is nothing to interfere with the said finding

Summary

The High Court of Madras ruled that hire purchase finance charges and service charges do not constitute chargeable interest under the Interest-tax Act. The court upheld the finding of the Appellate Tribunal that the agreement in question was a hire purchase agreement. The judgment was in favor of the assessee, with no costs awarded.