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TMI Blog1997 (7) TMI 101X X X X Extracts X X X X X X X X Extracts X X X X ..... -This is a reference under section 256(1) of the Income-tax Act. At the instance of the assessee, the following question is referred to this court for opinion : "Whether, on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal is justified in holding that the appellant company is not a financial company within the meaning of section 40A(8) of the Income-tax Act, 1961? ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Income-tax Appellate Tribunal, Hyderabad. On June 15, 1987, the Tribunal dismissed the appeal taking the view that the assessee is not a financial company within the meaning of the said provision. It is out of that order that the above question has arisen. Sri K. V. S. Bhaskara Rao, learned counsel for the petitioner, strenuously contends that the assessee satisfies the requirement of section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as under : "(iv) a loan company, that is to say, a company [not being a company referred to in sub-clauses (i) to (iii)] which carries on, as its principal business, the business of providing finance, whether by making loans or advances or otherwise ;" A financial company among others, includes (1) a loan company which is explained to be a company not being a company referred to in sub-clauses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ; secondly, the principal business of the company must be that of providing finance ; and thirdly, that providing of finance may be either by way of loans or advances or otherwise. The expression "or otherwise" has to be construed ejusdem generis, that means it must be construed in the same sense in which the words preceding the expression under interpretation are used. Now, in this case, providin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection 45-I(c)(v) of the Reserve Bank of India Act. A perusal of section 45-I(c)(v) of the Reserve Bank of India Act shows that the definition contained therein was for the purpose of Chapter III-B of that Act. Obviously, that definition has no application for the purposes of the Income-tax Act. On this aspect, the Tribunal has rightly held so. For the above reasons, we answer the question in th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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