Allowing the appeal of the assessee the Court held that;  the liquidated damages earned by the assessee were admittedly on account of defaults committed by the borrowers. According to the terms of agreement with the borrowers in case of default in redemption or payment of interest and all other moneys (except liquidated damages) on their respective due dates, liquidated damages at the rate of 2.10 per cent. per annum were levied and payable by the borrowers for the period of default. Though the term “liquidated damages” was used in the agreement, it actually signified the interest claimed by the assessee. This term “interest” would come within the word “charge” as provided under the definition of interest.( AY. 2002 -03)