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TMI Blog2016 (12) TMI 417X X X X Extracts X X X X X X X X Extracts X X X X ..... no interest tax has been collected by it for the period prior to 1.10.1991. We, therefore, hold that even if the interest for the earlier period was collected after 1.10.1991, no interest tax was liable on the interest pertaining to the period when the assessee was not liable to interest tax. The conclusion reached by the Tribunal as above is correct, regardless of what the accounting system o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... circumstances of the case, the Income Tax Appellate Tribunal was correct in law in not upholding the addition made by the Assessing Officer on account of alleged non-taxable interest without appreciating the facts and circumstances under which the said addition was made by the Assessing Officer after thorough discussion, ignoring the vital fact that not only the assessee failed to quantify any suc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns of this act, there shall be charged on every credit institution for every assessment year commencing on and from the 1st day of April, 1992, interest tax in respect of its chargeable interests of the previous year at the rate of three percent of such chargeable interest The term chargeable interest was defined in Section 5 which reads as under: Subject to the provisions of this Act, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s not liable to interest tax. For the sake of repetition, we may mention that only with effect from 1.10.1991, the assessee became liable to interest tax under the Interest Tax Act. We, therefore, hold that the lower authorities were not justified in including the interest in the chargeable interest for the period prior to 1.10.1991. The addition made by the A.O. is, therefore, deleted. This ..... X X X X Extracts X X X X X X X X Extracts X X X X
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