- (1.) Being aggrieved by the order of the learned Tribunal for the assessment year 1996-97, the financier preferred this appeal which was admitted by the Hon'ble Division Bench on the following two grounds: (a) Whether on a true and proper construction of the hire purchase agreements and the provisions of Section 2(7) of the Interest Tax Act, 1974, the hire charges received by the Appellant are interest on loans and advances chargeable to Interest Tax? (b) Whether the purported findings of the Tribunal that the transactions were loan/financing transactions or that the Appellant was not the owner of the vehicles and upholding the assessment of the hire charges as interest chargeable under the Interest Tax Act, 1974 are based op any material and/or have been arrived at by ignoring the relevant materials and/or by taking into consideration irrelevant and/or extraneous materials and/or are otherwise arbitrary, unreasonable and perverse?
(2.) The fact of this case is that the Appellant had entered into a hire purchase agreement on or about 1st August, 1995 with one Indu Bhusan Ghosh Dastider under various terms and conditions which include payment of Rs. 20,000/- as initial payment by way of hire and then subsequent payment of 18 instalments @ Rs. 2,060/- per month excluding the first instalment of Rs. 2,180/-. It is thus, clear that payment of the instalments would have to continue till 18 months commencing from 6th September, 1995. The Assessing Officer on the strength of the definition of Section 2(7) of the Interest Tax Act, 1974 (hereinafter referred to as "Act of 1974") has held that it is a financial transaction and in the garb of hire purchase agreement the loan was advanced. So, the Act of 1974 is attracted in this case. The Tribunal has upheld this finding.
(3.) We feel the first question on which this appeal was admitted needs to be addressed first, and thereafter we shall look into the second question.;