COMMISSIONER OF INCOME TAX Vs. SUNDARAM FINANCE LTD.

JUDGEMENT

(1.) THE assessee has filed this appeal assailing the order of the Income Tax Appellate Tribunal 'C' Bench, Chennai, dated 10.4.2007 made in I.T.A.No. 146/Mds/2003 for the assessment year 2000 -2001 and the same was admitted on the following question of law:

(2.) 1. The brief facts of the case are as under: The assessee is a finance company. It received interest on advances made for the purchase of goods. During the relevant assessment year, the assessee company has recognised a sum of Rs.3,61,98,668/ - as interest on trade advances. The claim of the assessee that the interest earned is not on loans and, therefore, interest tax is not exigible was rejected by the Assessing Officer and accordingly, the interest earned by the assessee was brought to tax.

(3.) THE main contention of the learned counsel for the assessee, which has been accepted by the Tribunal, is as follows: