Inter-corporate loans - Under same management - Whether section 370/295 applies to inter‑corporate deposits treating them as ‘loans’ - Companies Law - Letter : No. 13/5/84‑CL‑VI,

Letter : No. 13/5/84 ‑ CL ‑ VI, dated 4 ‑ 6 ‑ 1985. Subject:- Inter-corporate loans - Under same management - Whether section 370/295 applies to inter ‑ corporate deposits treating them as loans The issue relating to applicability of the provisions of section 295/370 in respect of inter-corporate deposits has been reconsidered in this Department in consultation with the Law Ministry. It has been advised by the Law Ministry that deposits kept by one company with another company is loan as envisaged under section 295/370 and, therefore, the provisions of section 370 are attracted in such a case. In this connection, your attention is invited to the decision of the, Rajasthan High Court in Totalal v. State AIR 1963 Raj. 6.