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TMI Blog2014 (1) TMI 1590X X X X Extracts X X X X X X X X Extracts X X X X ..... s into a transaction of hiring out goods on the terms and conditions - In some hire purchase agreement there is no agreement to buy goods - The hirer being under no legal obligation to buy, has an option either to return the goods or to become its owner by payment in full of the stipulated hire and the price for exercising the option - This class of hire purchase agreement must be distinguished fr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rcum- stances of this case, was justified in not applying the provisions of the Interest-tax Act, 1974 ? We have heard Mr. B. Narasimha Sharma, learned counsel for the appellant and we have gone through the judgment and order of the learned Tribunal. The moot question is whether the transaction entered into by the asses- see with third party is in the nature of loan transaction, which requires ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e are treated to be rentals. Therefore, the whole concept is with regard to payment of consideration money or rental not repayment of loan amount in financial transaction. Unless there is involvement of loan transaction, the question of payment of interest does not arise. The aforesaid peculiar situation with regard to the hire purchase agreement has been explained by the Supreme Court quite lon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and the price for exercising the option. This class of hire purchase agreement must be distin- guished from transaction in which the customer is the owner of the goods and with a view to finance his purchase he enters into an arrangement which is in the form of a hire purchase agreement . . ." In this case, the learned Tribunal had admittedly held that there is a hire purchase agreement factual ..... X X X X Extracts X X X X X X X X Extracts X X X X
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