2002 (7) TMI 74

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....SUBRAMANIAN J.-At the instance of the Revenue, the Income-tax Appellate Tribunal has stated the case and referred the following common questions of law with regard to the interpretation of section 40A(8) of the Income-tax Act, 1961, in relation to the assessment years 1981-82, 1982-83 and 1983-84 of the assessee. "1. Whether, on the facts and in the circumstances of the case, the Income-tax App....

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....sessing Officer found that the assessee-company had made certain payments of interest to the shareholders and directors of the company. The Income-tax Officer held that the provisions of section 40A(8) of the Act were attracted to the payment of interest to the directors and the shareholders and disallowed 15 per cent. of the interest so paid. The Commissioner of Income-tax (Appeals) on appeal, de....

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....n, and, in our opinion, it does not include a mere credit balance lying in the current account of the shareholders or the directors of the company. The legal relationship between the company and the deposit holders is far different from the legal relationship of the company and the shareholders and the terms of deposit would be different from the terms on which interest was paid on the amounts lyi....