1996 (3) TMI 74

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....sment years 1980-81 to 1983-84 connectible with applications registered as R. A. Nos. 86 to 89/(Ind) of 1985, for our opinion : "Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that the sums received from the directors and shareholders of the assessee did not amount to 'deposits' within the meaning of section 40A(8) of the Act and that no disallowance of interest under section 40A(8) of the Act was called for ?" The facts lie in a narrow compass. The assessee is a private limited company known as Kalani Asbestos Cement Private Limited, Indore. During the course of assessment, the Income-tax Officer noticed that for each of the assessment years under appeal the assessee had claimed vari....

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....order passed by the Tribunal and presented applications under section 256(1) of the Act which were registered as R. A. Nos. 86 to 88/(Ind) of 1985. These applications were rejected by the Tribunal on December 6, 1985 (annexure "D"). The Department then filed an application before this court under section 256(2) of the Act which was registered as Miscellaneous Civil Case No. 141 of 1986. This court directed the Tribunal on September 22, 1988, to state the case and refer the question as proposed in the aforesaid case. The Tribunal has stated the case and referred the aforesaid question. We have heard Shri D. D. Vyas, learned counsel for the applicant/Department, and Shri S. C. Bagdiya, learned counsel for the non-applicant/assessee. Ear....

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....e question is submitted in compliance with the directions issued by this court, we heard the parties at length. Counsel for the applicant was unable to show to us as to how the sums received from the directors and shareholders of the assessee amounted to deposits within the meaning of section 40A(8) of the Act. This provision has now been omitted with effect from April 1, 1986. This aspect was earlier considered by the Union of India. The Press Note took into account section 58A of the Companies Act, 1956, and the Press Note issued on that linchpin by the Ministry of Law, Justice and Company Affairs, indicated that the amount received from the directors and shareholders of a private limited company did not represent deposits but such amo....