Interest-tax Act, 1974--Hire-purchase transactions--Taxability of hire-charges as interest_Instructions--Regarding

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..... bject : Interest-tax Act, 1974 Hire-purchase transactions Taxability of hire-charges as interest Instructions--Regarding. In Board's Circular No. 738, dated 25-3-1996*, it was stated that hire-purchase transactions entered into by the hire-purchase companies and other credit institutions are generally in the nature of financing transactions and hence the hire charges earned in the transactions wo .....

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..... nature of hire-purchase, the Assessing Officer should consider the issue on merits taking into account, inter alia, the following facts and circumstances : (i) The terms of the agreement ; (ii) The nature of the arrangement between the supplier of the asset, the hire-purchase company and the end-user of the asset. (iii) The intention of the parties which manifests itself in the fixation of the .....

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..... o the vendor, the transaction, may not be regarded as a loan transaction even though the reason for which it was entered into was to raise money . . ." ". . . the intention of the appellant in obtaining the hire-purchase and the allied agreements was to secure the return of loan advanced to their customers, and no real sale of the vehicle was intended by the customer to the appellants. The transa .....

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