The Commissioner Of Income Tax vs M/S Bell Leasing & Hire Purchase on 27 July, 2009

       

  

  

 
 
  IN THE HIGH COURT OF KERALA AT ERNAKULAM

ITA.No. 613 of 2009()


1. THE COMMISSIONER OF INCOME TAX,
                      ...  Petitioner

                        Vs



1. M/S BELL LEASING & HIRE PURCHASE
                       ...       Respondent

                For Petitioner  :SRI.P.K.R.MENON,SR.COUNSEL, GOI(TAXES)

                For Respondent  : No Appearance

The Hon'ble MR. Justice C.N.RAMACHANDRAN NAIR
The Hon'ble MR. Justice C.K.ABDUL REHIM

 Dated :27/07/2009

 O R D E R
                    C.N.RAMACHANDRAN NAIR &
                            C.K.ABDUL REHIM, JJ.
               ....................................................................
                  I.T.A. Nos.613,618,631,633,634,636,
                        637,646,650, & 658 of 2009
               ....................................................................
                  Dated this the 27th day of July, 2009.

                                      JUDGMENT

Ramachandran Nair, J.

The question raised namely, liability for interest tax on interest

received under hire purchase and finance arrangement, stands decided

against the assessee by our decision in COMMISSIONER OF

LTD. (220 CTR 286). However, in this case we notice that the officer

erroneously assessed the entire hire charges and finance charges under

the Interest Tax Act which is reversed by the C.I.T. (Appeals). What

could be assessed under the Interest Tax Act is only the interest

received, under whatever name assessee may call it, for the hire

purchase arrangement. In other words, irrespective of the

nomenclature adopted for accounting the interest portion of the loan, it

is assessable to tax under the Interest Tax Act. Since the issue is

covered by judgment of this court abovereferred, we allow these

2

appeals by setting aside the orders of the Tribunal and restore the

matter to the Assessing Officer for recomputation of liability based on

the order of the C.I.T.(Appeals) to the extent it is consistent with the

judgment of this court abovereferred, after issuing notice to the

assessee and after serving copy of this judgment on the assessee.

C.N.RAMACHANDRAN NAIR
Judge

C.K.ABDUL REHIM
Judge
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