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Judgment
K.S. Jhaveri J.(Oral)—These appeals involve identical questions on law and were also ordered to be heard together vide order dated 17.09.2009 passed in Tax Appeal No.117/2009. Therefore, they are decided by this common judgment.
These appeals under Section 260A of the Incometax Act, 1961 have been admitted in terms of the following substantial question of law:
"Whether the Appellate Tribunal is right in law and on facts in confirming the order passed by the CIT(A) deleting the interest of intercorporate deposits from the chargeable interest under the Interest Tax Act, 1974 ?"
For the purpose of this judgment, Tax Appeal No.117/2009 is taken as the lead matter. In this case, the assessment was completed under section 8(2) of the Interest Tax Act, 1974 on 31.01.2000 at Rs.85,94,43,576/. Thereafter, the chargeable interest was revised by CIT(A), vide order dated 14.02.2001. Subsequently, the assessment was reopened under section 10 of the Act and total chargeable interest was determined at Rs.64,84,39,803/, vide assessment order dated 18.03.2004. Thereafter, the chargeable interest was revised to Rs.45,63,54,520/- by CIT(A), vide order dated 13.11.2003, against which the assessee as well as the Revenue preferred appeal before the Tribunal. Vide order dated 30.03.2005, the Tribunal set aside the order of CIT(A).
In compliance of the order, the assessment was completed on chargeable interest at Rs.46,98,76,608/-, against which the assessee had preferred appeal before the CIT(A). Vide order dated 02.08.2007, the CIT(A) confirmed the addition of Rs.1,35,21,788/- and directed the Assessing Officer to exclude the interest received on intercorporate deposits amounting to Rs.10,64,384/- as per the directions of the Tribunal vide order dated 30.03.2005, which was not excluded while framing the assessment after it was set aside by the Tribunal. In appeal preferred by the Revenue, the Tribunal confirmed the order of CIT(A), vide order dated 31.03.2008. Hence, this appeal.
We have heard learned counsel for the respective parties and perused the documents on record. The question raised in these appeals is already settled by a judgment of the Delhi High Court rendered in the case of Commissioner of Incometax v. Visisth Chay Vyapar Ltd., (2011) 339 ITR 157 (Delhi) ((2012) 20 taxmann.com 377 (Delhi)] wherein, it has been held that the expression �advance� occurring in section 2(7) along with the expression �loan� should take its colour from �loan� and cannot be given wider interpretation to include deposit as well, otherwise, money deposits given for investments, etc., would also qualify as �advances� and interest thereon would become exigible to the Interesttax Act. Such a situation was never contemplated by the legislature. Hence, intercorporate deposit is not in the nature of loan or advance within the meaning of section 2(7) and therefore, not chargeable to the interesttax under section 5. We concur with the view taken by the Delhi High Court in the aforesaid decision and consequently, answer the question in favour of the assessee and against the Revenue.
Consequently, all the appeals stand dismissed. No order as to costs.