Supreme Court of India
M/s. State Bank of Patiala through General Manager v. Commissioner of Income Tax, Patiala
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1 Supreme Court bench has cited this judgment.
What the Court ordered
We hold that the amount recovered by the G assessee from the constituents (borrower) cannot be taxed as interest in the hands of the assessee.
Judgment, page 19
From the headnote
Interest Tax Act, 1974: c s.2(7) - Interest payable on default in payment of amounts due under the discounted bill of exchange - Liability to pay tax on such interest under the Act of 1974- Held: Tax not payable - Interest is chargeable to tax under the Interest Tax Act only if it arises directly from a loan or advance - This is clear from the use of the word "on" ins. 2(7) of the Act - Interest payable "on" a discounted bill of exchange cannot therefore be equated with interest payable "on" a loan or advance. s.2(7)- Guarantee fees paid to the Deposit Insurance and Credit Guarantee…
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Where later benches applied it
Of those, 1 relied on
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