1984 (6) TMI 63

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.... interest under s. 40A(8) of the Act. The assessee had claimed deduction of interest of Rs. 3,33,235 which was paid an interest on deposits. The ITO in view of provisions of s. 40A(8) of the Act disallowed 15 per cent of the said amount of interest and thereby disallowed a sum of Rs. 49,984. 2. Being aggrieved the assessee carried the matter in appeal before the CIT(A) and contended that out of....

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....ns. In order to appreciate the controversy we refer to the aforesaid provisions which read as follows: 40A (8)(b) "deposit" means any deposit of money with, and includes any money borrowed by, a company, but does not include any amount received by the company— (vii) by way of security or as an advance from any purchasing agent, selling agent or other agent in the course of, or for the p....

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....agents is not disputed by the authorities below. In this connection it may not be out of place to mention that the Tribunal in case of M.E. Private Limited vs. ITO (1981) 11 TTJ 299 (Bom) have explained the scope of s. 40A(8) of the Act. In para 4 of its order it is held that there is a difference between deposit and the "deposit in current account" and that the expression "deposit" in sec. 40A(8)....

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....ee challenged this decision before the CIT(A) who held that the assessee had no right of appeal against the levy of interest. He therefore declined to consider the assessee's claim on merit. 6. After hearing the parties we are of the view that the CIT(A) had clearly overlooked the decision of their Lordships of the Gujarat High Court in case of Bhikhoobhai N. Shah vs. CIT 1978 CTR (Guj) 172 : (....