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TMI Blog2002 (7) TMI 74X X X X Extracts X X X X X X X X Extracts X X X X ..... nterest payments made to the directors and shareholders on the credit balances in the current accounts held by them with the assessee in terms of section 40A(8) of the Act? - 2. Whether, on the facts and in the circumstances of the case, the Income tax Appellate Tribunal was right in law in holding that the interest payment made to the directors and shareholders on their deposits with the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... circumstances of the case, the Income-tax Appellate Tribunal was right in holding that no disallowance of interest should be made on interest payments made to the directors and shareholders on the credit balances in the current accounts held by them with the assessee in terms of section 40A(8) of the Act? 2. Whether, on the facts and in the circumstances of the case, the Income tax Appellate Tri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sioner of Income-tax (Appeals) on appeal, deleted the disallowance of interest made by the Income-tax Officer and that order was also confirmed by the Income-tax Appellate Tribunal. It is against the order of the Income-tax Appellate Tribunal, the present reference has been made. Heard Mr. J. Naresh Kumar, learned junior standing counsel for the Revenue, and Mr. R. Meenakshisundaram, learned co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n which interest was paid on the amounts lying in the credit balance of the shareholders. There is also no evidence to show that there was an agreement to treat the credit balance of the account holders as deposits. The Madhya Pradesh High Court in CIT v. Kalani Asbestos (P.) Ltd. [1989] 180 ITR 55, has taken a similar view. Hence, we hold that the Appellate Tribunal was correct in law in holding ..... X X X X Extracts X X X X X X X X Extracts X X X X
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