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. 613 of 2009() --------------------- ITA.17/2003 of I.T.A.TRIBUNAL,COCHIN BENCH .................... APPELLANT: -------------------- THE COMMISSIONER OF INCOME TAX, COCHIN. BY ADV. SRI.P.K.R.MENON,SR.COUNSEL, GOI(TAXES) SRI.JOSE JOSEPH, SC, FOR INCOME TAX RESPONDENT(S): --------------- M/S BELL LEASING & HIRE PURCHASE LTD., BHAGHEERATHA, SANTHWANA, CHITTOOR ROAD, ERNAKULAM, KOCHI -18. THIS INCOME TAX APPEAL HAVING COME UP FOR ADMISSION ALONG WITH ITA NO.618/2009 & CONN. CASES ON 27/07/2009, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: C.N.RAMACHANDRAN NAIR & C.K.ABDUL REHIM, JJ. .................................................................... I.T.A. Nos.613,618,631,633,634,636, 637,646,650, & 658 of 2009 .................................................................... Dated this the 27th day of July, 2009. JUDGMENT Ramachandran Nair, J. The question raised namely, liability for interest tax on interest received under hire purchase and finance arrangement, stands decided against the assessee by our decision in COMMISSIONER OF INCOME-TAX V. KERALA STATE FINANCIAL ENTERPRISES LTD. (220 CTR 286). However, in this case we notice that the officer erroneously assessed the entire hire charges and finance charges under the Interest Tax Act which is reversed by the C.I.T. (Appeals). What could be assessed under the Interest Tax Act is only the interest received, under whatever name assessee may call it, for the hire purchase arrangement. In other words, irrespective of the nomenclature adopted for accounting the interest portion of the loan, it is assessable to tax under the Interest Tax Act. Since the issue is covered by judgment of this court abovereferred, we allow these 2 appeals by setting aside the orders of the Tribunal and restore the matter to the Assessing Officer for recomputation of liability based on the order of the C.I.T.(Appeals) to the extent it is consistent with the judgment of this court abovereferred, after issuing notice to the assessee and after serving copy of this judgment on the assessee. C.N.RAMACHANDRAN NAIR Judge C.K.ABDUL REHIM Judge pms