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As per ld. Assessing Officer, the assessee, if it had taken funds from a financial institution it would have ended up paying substantial interest and they were saving interest by taking deposits from customers. He :- 7 -: ITA Nos.1829-1833/Mds/2014.

thus came to a conclusion that assessee company was making payments to its customers out of an obligation created towards them by virtue of terms and conditions of the promotion schemes. According to him, such obligation came within the definition of interest u/s. 2(28A) of the Act. Relying on the judgment of Hon'ble Jurisdictional High Court in the case of Viswapriya Financial Services and Securities Ltd vs. CIT 258 ITR 496, ld. Assessing Officer held that financial incentives offered by the assessee were nothing but interest on payments received from customers. Ld. Assessing Officer also took a view that incentives would also fall within the meaning of ''other charges'' specified u/s. 2(28A) of the Act. Since assessee had failed to deduct tax at source as required under section 194A of the Commissioner of Income Tax, ld. Assessing Officer considered the assessee as one in default and directed the assessee to pay tax at the rate of 10% on the incentives given in excess of H5,000/-. He also directed the assessee to pay interest u/s. 201(1A) of the Act.

(iv) Facts in the case of Viswapriya Financial Services and Securities Ltd (supra) decided by the Jurisdictional High Court were entirely different and did not apply to a gold incentive scheme.

However, ld. Commissioner of Income Tax (Appeals) was not impressed by the above arguments. According to him, Board's circular No.202, dated 05.07.1976 explained the scope of the definition of :- 9 -: ITA Nos.1829-1833/Mds/2014.

17. Coming to the judgment of Jurisdictional High Court in the case of Viswapriya Financial Services and Securities Ltd (supra) relied on by the ld. Assessing Officer, the company there was engaged in retail finance service where the investors were guaranteed 1.5% return on their monthly deposits. Such returns were paid every month to the investors. Investors were also entitled to the principal amount at the end of the scheme paid. Hon'ble Jurisdictional High Court held such returns to be nothing but interest. However, in gold schemes conducted by the assessee, there were no monthly payment of returns in cash nor was the scheme members entitled to get their money back. Thus facts of the case before Hon'ble Jurisdictional High Court were vastly different.