1986 (11) TMI 98

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.... is taken to the disallowance under s. 40A(8) of the IT Act, 1961 of interest to the extent of Rs. 10,536 out of interest paid to the three directors of the company. 2. Shri P.N. Monga, ld. Advocate, authorised counsel of the appellant has very vehemently contended that the disallowance was not permissible under the provisions of s. 40A(8). According to him, moneys borrowed by a private limited....

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....the Finance Minister who moved the Finance Bill and the Notes on clauses subsequently issued by the CBDT had to be looked into in order to find out the exact intention of the legislature behind any particular enactment and that if the speech of the mover of the Finance Bill was clearly indicative of the intention that interest to the extent of 15 per cent was to be disallowed only on deposits rece....

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....e deciding the appeals in the abovementioned cases. 3. On the other hand, Smt. Sushma Trivedi, ld. Departmental Representative has supported the order of the CIT(A) and contended that the disallowance of interest to the extent of 15 per cent was wholly justified being in accordance with the language of s. 40A(8) of the Act. 4. We have considered the rival points of view. According to us, the....

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....mpany. The word 'deposit' has been defined in Expln. (b) of s. 40A(8) and it means 'any deposit of money and includes any money borrowed by a company.' Certain deposits received from Central Govt., State Govt., Local Authority, Govt. of Foreign State, or loans from a banking company or a cooperative society engaged in the business of banking and amounts received from other companies or from the em....