Supreme Court · 2015 INSC 843 · Decided 18 November 2015

M/S. State Bank of Patiala Through General Manager v. Commissioner of Income Tax, Patiala

Court
Supreme Court of India
Citation
2015 INSC 843 · [2015] 12 S.C.R. 243
Case number
CIVIL APPEAL No. 5212/2007
Decided
18 November 2015
Bench
A.K. SIKRI, R.F. NARIMAN (2-judge bench)
Outcome
Disposed off
Case type
Civil
Acts & sections cited
Income Tax Act

Headnote

Interest Tax Act, 1974: B 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 only if it arises directly from a loan or D 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

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