Per Singhal, J.M. - Since common issue is involved in these appeals, the same are being disposed of by the common order for the sake of convenience. The short issue involved in these appeals is whether the interest received by the assessee in respect of various investments and deposits made by it is chargeable to tax under the provisions of Interest-tax Act, 1974 (in short Act).

2. Briefly stated, the facts are that the assessee, which is a subsidiary of General Insurance Corporation of India, is engaged in the business of general insurance. It is governed by the provisions of the Insurance Act, 1938. The assessee is required to invest its funds only in the approved investments specified in section 27B of this Act. During the years under consideration, the assessee received interest chargeable on various investments and deposits and filed its return of interest chargeable to tax under the Act declaring interest chargeable to tax at Rs. 16,42,34,600, Rs. 19,99,50,713 and Rs. 22,90,13,766 for assessment years 1993-94, 1995-96 and 1996-97 respectively. However, the assessee had not declared interest received on the following investments and deposits :

Interest on :

1.Deposits, bonds and securities

2.Special deposits with RBI

3.Deposit with IDBI

4.Fixed deposits with banks

5.Certificate deposits with banks

6.Stock invested with banks

7.Call money

8.Loan to DDA

9.Bills discounting schemes with banks

10.Loans to UTI

According to the assessee, such interest did not fall within the ambit of ‘loans’ and ‘advances’ which is chargeable to tax under section 5 read with sections 2(5) and 2(7) of the Act. However, the Assessing Officer was of the view that interest was chargeable to tax. Hence, he included the above interest in the interest chargeable to tax and thus, assessed the assessee on the total interest of Rs. 1,00,62,97,800 for assessment year 1993-94, Rs. 1,30,65,84,140 for assessment year 1995-96 and Rs. 1,73,73,60,660 for assessment year 1996-97. The assessments made by Assessing Officer have been confirmed by the first appellate authority. Hence, the present appeals have been preferred by the assessee before the Tribunal.

3. The learned counsel for the assessee has submitted before us that the issue involved in the present appeals is covered in favour of the assessee by the recent decision of the Tribunal in the case of Punjab National Bank v. Dy. CIT [2003] 87 ITD 11 (Delhi) as well as by another decision of the Tribunal in the case of Sahara India Savings & Investment Corpn. Ltd. v. Asstt. CIT [2001] 79 ITD 56 (All.) while the learned DR has supported the orders of lower authorities by relying on the decision of the Tribunal in the case of State Bank of Hyderabad v. Dy. CIT [1998] 66 ITD 464 (Hyd.). In reply, it is submitted by the learned counsel for the assessee that the decision of Hyderabad Bench has been considered by Delhi Bench in the case of Punjab National Bank (supra) and, therefore, the assessee is entitled to succeed. Alternatively, it has been pleaded that where two views are possible then the view favourable to the assessee should be adopted.

4. At this stage, it was pointed out to the parties that these decisions are relevant only with reference to interest on debentures, bonds and securities and not with reference to interest on various deposits made by the assessee. Hence, they were asked to argue on such aspect of the issue. The counsel for the assessee merely submitted that reasonings given by the Tribunal with reference to interest on debentures, bonds and securities would also govern the issue relating to interest on deposits. Similar arguments were made by the learned DR by referring to the decision of Hyderabad Bench of the Tribunal.

5. Rival submissions of the parties have been considered carefully. As far as the issue relates to the interest on debentures, bonds and securities, we find that the same is squarely covered in favour of the assessee by the decision of the Tribunal, Delhi Bench in the case of Punj