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TMI Blog2008 (2) TMI 415X X X X Extracts X X X X X X X X Extracts X X X X ..... tax Act, the Companies Act as well as the Banking Regulation Act - interest earned by the banks on dated Government securities is not liable to interest-tax under section 2(7) read with section 4 of the Interest Act, 1974 - question of law as formulated in the appeal has to be answered in favour of the assessee and against the Revenue - 536 of 2002 - - - Dated:- 27-2-2008 - DEEPAK VERMA and ANA ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... does not form chargeable interest for the purpose of the Interest-tax Act ?" 3. The assessee is a banking company. In respect of the assessment year 1993-94 a return of income as per the provisions of the Interest-tax Act, 1974, (hereinafter shall be referred to in short as "the Act"), was filed. The matter was taken up for scrutiny assessment. The Assessing Officer was pleased to hold that in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appeal preferred by the assessee. The assessee feeling dissatisfied with the aforesaid orders passed by two authorities below, preferred further appeal before the Tribunal. The Tribunal looked at the matter from all angles and allowed the appeal of the assessee holding therein that interest on securities could not have been brought to tax as per the provisions of the Act. Hence, this appeal at the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e one hand and investment/securities on the other hand. This difference is indicated in the Income-tax Act, the Companies Act as well as the Banking Regulation Act. It further went on to hold that interest earned by the banks on dated Government securities is not liable to interest-tax under section 2(7) read with section 4 of the Interest Act, 1974. The reasoning assigned by the Supreme Court fin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Bombay High Court reported in CIT v. United Western Bank Ltd. [2003] 259 ITR 312. It is not in dispute that the Revenue has accepted the aforestated two judgments of the Bombay High Court. We are in agreement with the view expressed by the Bombay High Court." 6. For the aforesaid reasons, we are of the considered opinion that the question of law as formulated in the appeal has to be answ ..... X X X X Extracts X X X X X X X X Extracts X X X X
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