2000 (1) TMI 36

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....ct, 1961, the Tribunal has referred the following common question for the assessment years 1981-82 and 1982-83 for our opinion : "Whether, on the facts and in the circumstances of the case and on a correct interpretation of section 40A(8) of the Income-tax Act, 1961, the Tribunal was justified in law in holding that section 40A(8) of the said Act is not applicable on the interest paid on the su....

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....d held that in the case of current deposit of the director in the company, the provisions of section 40A(8) are not applicable. The admitted fact is that Shri Hari Prosad Lohia was a director in the assessee-company and interest has been paid to him on the deposits made by him. The Tribunal following the decision of the Madhya Pradesh High Court in the case of CIT v. Kalani Asbestos (Pvt.) Ltd.....

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....ure by way of interest in respect of any deposit received by it, 15 per cent. of such expenditure shall not be allowed as a deduction. Explanation.---In this sub-section,--- (a) 'banking company' means a company to which the Banking Regulation Act, 1949 (10 of 1949), applies and includes any bank or banking institution referred to in section 50 of that Act ; (b) 'deposit' means any deposi....

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....When the Legislature did not intend for exclusion of the current deposit in the definition of "deposit", there is no justification to stretch or narrow down the definition of deposit, given in the Explanation in that sub-section in the Act itself. When a plain reading of the language in the definition of "deposit" clearly provides that "deposit" means any deposit of money, there is no question of ....