9911796707
TMI Blog1986 (10) TMI 49X X X X Extracts X X X X X X X X Extracts X X X X ..... rs' : As on 30-6-1979 As on 30-6-1980 Rs. Rs. A.L. Thakur 84,524.19 86,489.44 P.L. Thakur 90,800.00 75,820.60 J.L. Thakur 82,376.58 88,514.44 K.L. Thakur 60,585.76 75,453.34 R.L. Thakur 1,24,879.05 1,03,666.93 --------------------- --------------------- 4,43,165.58 4,29,944.75 --------------------- --------------------- 4. During the relevant assessment years, the assessee paid the following interest on the aforesaid balances : 1980-81 1981-82 Rs. Rs. A. L. Thakur 10,582.19 12,766.44 P.L. Thakur 12,000.00 12,022.60 J.L. Thakur 8,196.58 15,016.44 K.L. Thakur 8,428.76 11,615.34 R.L. Thakur 16,532.05 15,184.93 --------------------- --------------------- 55,739.58 66,605.75 ------- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt of the directors filed by the assessee I find that the transactions were very few in between and were not in the nature of current account. Therefore this ground of appeal fails for both the years." 7. Being aggrieved by the order of the Commissioner (Appeals), the assessee has come up in appeal before the Tribunal. At the outset, the learned counsel for the assessee was fair enough to state that he was aware of the fact that the order dated 5-8-1985 of the Tribunal in the case of Kaloomal Shorimal Sachdev Rangwalla (P.) Ltd. v. First ITO [1985] 14 ITD 248 (Bom.) (SB) was against the assessee. However, he hastened to state that it would be his endeavour to impress upon the Tribunal that the said order in the case of Kaloomal Shorimal S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessee-company. Reliance was placed on the decision in the case of Ram Prashad v. CIT [1972] 86 ITR 122 (SC). He also invited the attention of the Tribunal to the articles of association of the assessee-company as well as relevant pages of the Ramayya's book on Company Law. At the instance of the Tribunal, the learned counsel for the assessee also filed copies of the balance sheets as on 30-6-1979 and 30-6-1980. In this view of the matter, he strongly argued that the disallowances made under section 40A(8) were bad in law and should, therefore, be deleted from the total income of the assessee, in each of the years under appeal. 8. The learned representative for the revenue on the other hand strongly relied on the order of the Tribuna ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e such categories of amount as may be prescribed in consultation with the Reserve Bank of India.' This section, therefore, contains an express provision which includes in the term 'deposit' monies borrowed by a company also. If a deposit and a loan were synonymous there would be no need for such a provision. Similarly under section 227(1A)(d) it is provided that auditor shall inter alia inquire 'whether loans and advances made by the company have been shown as deposits'. These provisions indicate that it may not be possible to interchange the terms 'loan' and 'deposit' under Companies Act unless there is an express provision to that effect or the context makes it clear that the terms are interchangeable." He, therefore, urged that even ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Relying on the decision of the Hon'ble Supreme Court in the case of Shree Sajjan Mills Ltd. v. CIT [1985] 156 ITR 585, he submitted that if we were to accept the submissions of the assessee then we would make the nonsense of the provisions of section 40A(8) which the Hon'ble Supreme Court has depreciated while interpreting the provisions of section 40A(7) in the said case. He also submitted that in interpreting the provisions of section 40A(8) we should keep in mind that the opening words 'notwithstanding anything to the contrary contained in any other provisions of this Act' mentioned in sub-section (1) of section 40A. He also submitted that in interpreting various provisions of section 40A we should also keep in mind the object and purpos ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rovisions of section 58A more particularly the meaning of 'deposit' mentioned in the Explanation to the said section which is in para materia with the definition of 'deposit' mentioned in clause (b) of the Explanation to section 40A(8). The relevant extract on this issue has already been reproduced above which clearly shows that in the context in which the expression 'deposit' is used in a statute, it is quite possible to hold that a deposit and a loan are synonymous. Since such is a case in the present appeals, we fail to appreciate how the assessee can get any benefit from the said decision in the case of Pennwalt India Ltd. At this stage it is pertinent to note the following extract from the auditors' report to the members : "The compa ..... X X X X Extracts X X X X X X X X Extracts X X X X
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