9911796707
TMI Blog1984 (7) TMI 127X X X X Extracts X X X X X X X X Extracts X X X X ..... Rs. 16,674 + Rs. 510) in the asst. yrs. 1979--80, 1980-81 and 1981-82 respectively have been disallowed under s. 40A (8) of the IT Act (for brevity the 'Act') by the ITO: Name .. Asst. yrs. . . 1979-80 1980-81 1981-82 . Rs. P. Rs. P. Rs. P. Puspa Devi Sarla 1,549.00 — — Bansidhar Sitaram and Co. 58,545.00 19,783.00 43,550.00 Anandi Devi Kalyani 308.00 333.00 359.00 Amit Kumar Daga 1,419.00 1,268.00 1,428.00 Godavari Devi Daga 25,278.60 23,615.72 24,220.59 Kamala Devi Daga 3,090.00 3,312.00 3,551.00 Lila Bhoopal 8,893. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t. 3rd March, 1983 in the case of this assessee-company itself for the asst. yr. 1982-83. 4. Learned departmental representative, on the other hand, argued that the principal amounts on which interest was paid to different persons, were nonetheless deposits within the meaning of Expln. (b) to s. 40A (8) of the Act and such deposit does not find place in the list of exemption given in the said Explanation. He, therefore, vehemently opposed the cross objections and supported the orders of the ITO and the CIT(A). 5. Minute analysis of s. 40A(8) and the meaning of "deposit" show that interest paid on any deposit or loan except those enumerated in Expln. (b) come within the restrictions placed by the section. "Deposit" has been defined as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... were the cash credits in the current account or in the course of business of the company. To constitute a current account or an account in the course of business of the company, there must be transaction on each side creating independent obligation on the other. Mere credit entries with adjustment entries live payment of interest and deduction of tax at source cannot make the account a current account or an account in the course of business transaction. Such account cannot be taken out of ambit of the word "deposit". Since the assessee claimed deduction in full, burden lay on it to prove that the interest was not paid on deposits. The assessee-company has filed copies of accounts of the persons payment of interest to whom is in question. Mi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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