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TMI Blog1984 (6) TMI 63X X X X Extracts X X X X X X X X Extracts X X X X ..... of Rs. 3,33,235 which was paid an interest on deposits. The ITO in view of provisions of s. 40A(8) of the Act disallowed 15 per cent of the said amount of interest and thereby disallowed a sum of Rs. 49,984. 2. Being aggrieved the assessee carried the matter in appeal before the CIT(A) and contended that out of the total amount of interest as aforesaid a sum of Rs. 2,01,258 related to interest ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... read as follows: 40A (8)(b) "deposit" means any deposit of money with, and includes any money borrowed by, a company, but does not include any amount received by the company— (vii) by way of security or as an advance from any purchasing agent, selling agent or other agent in the course of, or for the purpose of, the business of the company or as advance against orders for the supply of g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f place to mention that the Tribunal in case of M.E. Private Limited vs. ITO (1981) 11 TTJ 299 (Bom) have explained the scope of s. 40A(8) of the Act. In para 4 of its order it is held that there is a difference between deposit and the "deposit in current account" and that the expression "deposit" in sec. 40A(8) does not apply to deposits in current account by directors. On the parity of reasoning ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f appeal against the levy of interest. He therefore declined to consider the assessee's claim on merit. 6. After hearing the parties we are of the view that the CIT(A) had clearly overlooked the decision of their Lordships of the Gujarat High Court in case of Bhikhoobhai N. Shah vs. CIT 1978 CTR (Guj) 172 : (1978) 114 ITR 197 (Guj) in which it is held that the assessee can challenge its liabili ..... X X X X Extracts X X X X X X X X Extracts X X X X
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