M/S U.P STATE INDUSTRIAL DEVELOPMENT CORPORATION LTD.,KANPUR vs. ASTT. COMMISSIONER OF INCOME TAX-VI, KANPUR

ITA 3/LKW/2004Status: DisposedITAT Lucknow14 October 2025AY 1995-9623 pages
AI SummaryAllowed

What did the Tribunal hold?

The ITAT held that the assessee was neither a credit institution nor a finance company under the Interest Tax Act. Consequently, the provisions of the Act were not attracted to the interest income received on delayed payment of premium by allottees or on advances given to UPSEB.

What were the facts?

The assessee, U.P. State Industrial Development Corporation Ltd., received interest income. The tax authorities sought to levy interest tax, but the assessee contended it was not a 'credit institution' or 'financial company' as defined under the Interest Tax Act. The CIT(A) partly allowed the appeal, excluding interest on bank deposits and employee loans but including interest on loans to UPSEB and delayed premium payments.

What were the issues?

Whether the assessee qualifies as a 'credit institution' or 'financial company' under the Interest Tax Act, and whether the interest income received falls within the definition of 'chargeable interest'.

Which sections of the Income-tax Act were involved?

Section 2(5),Section 2(5A),Section 2(5B),Section 2(7),Section 5,Section 10,Section 36(1)(viii)

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Cases cited in this judgment(2)Show list

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Income Tax Appellate Tribunal, LUCKNOW ‘B BENCH, LUCKNOW

Before: SH. SUBHASH MALGURIA & SH. NIKHIL CHOUDHARY

For Appellant: Adv & Shubham

PER NIKHIL CHOUDHARY, A.M. These two appeals have been filed by the assessee against the separate orders of the ld. CIT(A)-2, Kanpur, both dated 23.02.2004, in which the ld. CIT(A) has partly allowed the appeals of the assessee against the orders of the ld. Assessing Officer, passed under section 8(2) of the Interest Tax Act, 1974 on 1.03.2002. Since the issue involved in both these assessment years is similar and the cases were taken up for argument together, the same are disposed of by way of a common order. The grounds of appeal preferred in the two assessment years are as under:

A.Y. 1995-96 “1. BECAUSE the notice under section 10 o

The order continues below.

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