Ramachandran Nair, J v. C.n.ramachandran Nairjudge

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.N.RAMACHANDRAN NAIR & THE HONOURABLE MR. JUSTICE K.SURENDRA MOHAN TUESDAY, THE 3RD MARCH 2009 / 12TH PHALGUNA 1930 ITA.No. 175 of 2008() --------------------- ITA.17/COCH/2004 of I.T.A.TRIBUNAL,COCHIN BENCH .................... APPELLANT/APPELLANT: ----------------------------- THE COMMISSIONER OF INCOME TAX, TRICHUR. BY ADV. SRI.JOSE JOSEPH, SC, FOR INCOME TAX RESPONDENT(S): RESPONDENT ------------------------- M/S. KALLUR CHIT FUNDS AND FINANCE (P) LTD., KALLUR. ADV. SRI.SHOBY K.FRANCIS FOR R1 THIS INCOME TAX APPEAL HAVING BEEN FINALLY HEARD ON 03/03/2009, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: C.N.RAMACHANDRAN NAIR &K.SURENDRA MOHAN, JJ.....................................................................I.T. Appeal No.175 of 2008 ....................................................................Dated this the 3rd day of March, 2009. JUDGMENT Ramachandran Nair, J. Heard Standing Counsel appearing for the appellant and counselappearing for the respondent-assessee. The first issue that is, liabilityfor interest tax on finance charges recovered by hire purchase companyis covered in favour of the Revenue by decision of this court inCOMMISSIONER OF INCOME TAX V. KERALA STATEFINANCIAL ENTERPRISES LTD. (220 CTR 286). Following thesaid judgment, we reverse the order of the Tribunal and restore theassessment under Interest Tax Act on the hire charges and financecharges recovered by the respondent. So far as the next contention i.e.department's claim for assessment of interest received from defaultsubscribers is concerned, we do not think the claim is tenable becauseinterest taxable under the Act is only interest received on loans andadvances made in India. Subscriber is liable to pay interest onaccount of non-payment of the kurry subscription in time. So far as the kurry subscriptions are not in the nature of loans or advances, nointerest tax is payable on the interest payable for the belated payment ofsubscription. Appeal is, therefore, allowed in part with direction to theassessing authority to revise the assessment as indicated above. C.N.RAMACHANDRAN NAIRJudge pms K.SURENDRA MOHANJudge