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TMI Blog2011 (6) TMI 123X X X X Extracts X X X X X X X X Extracts X X X X ..... 2011 - Mr. Justice Bhaskar Bhattacharya, Mr. Justice Sambuddha Chakrabarti, JJ. For the Appellant: Mr. N. K. Poddar, Mr. D. Mitra. For the Respondent: Mr. S. N. Dutta, Mr. Aniket Mitra. Bhaskar Bhattacharya, J.: 1. This appeal under Section 260A of the Income-tax Act, 1961 read with Section 21 of the Interest Tax Act, 1974 is at the instance of an assessee and is directed against order dated 19th December, 2003 passed by the Income-tax Appellate Tribunal, B Bench, Kolkata, in Interest Tax Appeal No.11(Cal) of 1997 relating to the Assessment Year 1992-93 dismissing the appeal field by the assessee. 2. The facts giving rise to filing of this appeal may be summed up thus: a) The appellant is a company mainly engaged in the business of insurance other than that of life insurance. The petitioner company is also categorized as Public Financial Institution under Section 4A of the Companies Act, 1956 and is also engaged in the investment activities like purchase and sale of shares, debentures, bonds, government securities etc. As part of its investment business, the appellant also provides various types of loans and advances to different companies as we ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Tax Act, 1974, the Income Tax Appellate Tribunal, B Bench, Kolkata misdirected itself in law and it adopted a wholly erroneous approach in confirming that the sum of Rs.16,97,65,816 representing interest received by the appellant assessee company, from the banking companies governed by the Banking Regulation Act, 1949 under the Bills Rediscounting Scheme during the financial year relevant to the assessment year 1992-93, was not the interest on loans and advances made to other credit institutions, and that the same was part of chargeable interest being discount on promissory notes and bills of exchange drawn or made in India and whether its such finding was wholly unreasonable and/or otherwise perverse. II. Whether on the facts and in the circumstances of the case the Tribunal misdirected itself in law and it adopted a wholly erroneous approach in confirming that the sum of Rs.16,97,65,816 representing interest received by the appellant assessee company from different banking companies under the Bills rediscounting scheme, not being interest on loans and advance made to other credit institutions, was not excluded from the definition of interest as contained in Section 2(7) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ii) or (iii) of clause (5A), being (i) a hire-purchase finance company, that is to say, a company which carries on, as its principal business, hire-purchase transactions or the financing of such transactions; (ii) an investment company, that is to say, a company which carries on, as its principal business, the acquisition of shares, stock, bonds, debentures, debenture stock, or securities issued by the Government or a local authority, or other marketable securities of a like nature; (iii) a housing finance company, that is to say, a company which carries on, as its principal business, the business of financing of acquisition or construction of houses, including acquisition or development of land in connection therewith; (iv) a loan company, that is to say, a company not being a company referred to in sub-clauses (i) to (iii) which carries on, as its principal business, the business of providing finance, whether by making loans or advances or otherwise; (v) a mutual benefit finance company, that is to say, a company which carries on, as its principal business, the business of acceptance of deposits from its members and which is declared by the Central Government u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ther than the deduction specified in this sub-section shall be allowed from the total amount of interest accruing or arising to the assessee. (2) In computing the chargeable interest of a previous year, the amount of interest which accrues or arises to the assessee before the 1st day of August, 1974, or during the period commencing on the 1st day of March, 1978, and ending with the 30th day of June, 1980, or during the period commencing on the 1st day of April, 1985 and ending with the 30th day of September, 1991, shall not be taken into account. (Emphasis supplied by us). 6. After hearing the learned counsel for the parties and after going through the materials on record, there is no dispute that the appellant is a credit institution being a Public Financial Institution as defined in Section 4A of the Companies Act, 1956 (1 of 1956) and thus, is an assessee under the Act. It appears from the definition of the interest as provided in Section 2(7) of the Act, interest means interest on loans and advances made in India and includes a) commitment charges on unutilized portion of any credit sanctioned for being availed on in India and b) discount on promissory notes and ..... X X X X Extracts X X X X X X X X Extracts X X X X
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