IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.N.RAMACHANDRAN NAIR & THE HONOURABLE MR. JUSTICE C.K.ABDUL REHIM MONDAY, THE 27TH JULY 2009 / 5TH SRAVANA 1931 ITA.No. 614 of 2009() --------------------- ITA.8/COCH/2005 of I.T.A.TRIBUNAL,COCHIN BENCH .................... APPELLANT: ------------------------------ THE COMMISSIONER OF INCOME TAX, TRICHUR. BY ADV. SRI.P.K.R.MENON,SR.COUNSEL, GOI(TAXES) SRI.JOSE JOSEPH, SC, FOR INCOME TAX RESPONDENT(S): --------------- M/S.VARTHAKAKSHEMAM HIRE PURCHASE & LEASING CO.(P)LTD., RICE BAZAR, TRICHUR. THIS INCOME TAX APPEAL HAVING COME UP FOR ADMISSION ON 27/07/2009, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: C.N.RAMACHANDRAN NAIR & C.K.ABDUL REHIM, JJ. .................................................................... I.T. Appeal No.614 of 2009 .................................................................... Dated this the 27th day of July, 2009. JUDGMENT Ramachandran Nair, J. The main issue i.e. liability for interest tax on the interest component of hire charges and finance charges received is covered by judgment of this court in COMMISSIONER OF INCOME-TAX V. KERALA STATE FINANCIAL ENTERPRISES LTD. (220 CTR 286). So far as default interest is concerned, this court has held that this is additional interest charged under hire purchase agreement which also attracts tax under the Interest Tax Act in the judgment in I.T.A. No.57 of 2009. Following the judgments abovereferred we allow the appeal filed by the Revenue by reversing the order of the Tribunal and that of the first appellate authority and restore the matter to the Assessing Officer for recomputation of liability based on judgments 2 abovereferred after issuing notice and after serving a copy of this judgment and copy of the judgment in I.T.A. No.57/2009 on the assessee. C.N.RAMACHANDRAN NAIR Judge C.K.ABDUL REHIM Judge pms