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T. N. K. Govindarajulu Chetty vs Commissioner Of Income-Tax, Madras on 17 April, 1967

The same principle would apply if interest is payable under the terms of an agreement and the Court or the arbitrator gives effect to the terms of the agreement and awards interest: T.N.K. Govindaraju Chetty v. CIT (1867) 66 ITR 465 (SC). But where the interest is merely in name but constitutes part of the compensation or part of the damages, it is not "interest" chargeable to income-tax.
Supreme Court of India Cites 14 - Cited by 90 - J C Shah - Full Document

Commissioner Of Income-Tax, Gujrat I vs Saurashtra Cement And Chemical ... on 17 August, 1972

The case of Saurashtra Cement (supra) was distinguished on the ground that in that case the issue was whether there was any business connection or not. Moreover, in case of Saurashtra Cement, delivery was given outside India, whereas in the present case, delivery of vessel was given in India, The case of Orient Trading was distinguished on the ground that in that case, the issue was distinguished on the ground that in that case, the issue was whether amount paid as interest on hundi and late payment of purchase price on the same, should be regarded as interest paid on borrowed capital. AO observed that definition of the term "interest" in the Act is an inclusive one, and hence has a wide scope. In the instant case, he observed, there is no limitation that interest should arise only from borrowed capital.
Gujarat High Court Cites 1 - Cited by 149 - P N Bhagwati - Full Document
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