Interest Tax Act, 1974:

s.2(7) - Interest payable on default in payment of

amounts due under the discounted bill of exchange -

Liability to pay tax on such interest under the Act of 1974-

Held: Tax not payable - Interest is chargeable to tax under

the Interest Tax Act only if it arises directly from a loan or 

advance - This is clear from the use of the word "on" ins. 2(7)

of the Act - Interest payable "on" a discounted bill of

exchange cannot therefore be equated with interest payable

"on" a loan or advance.

s.2(7)- Guarantee fees paid to the Deposit Insurance

and Credit Guarantee Corporation does not form part of

definition of interest ins. 2(7) of the Act of 197 4.

Words and phrases: Expression 'means and includes'

- Connotation of.