TMI Blog1990 (4) TMI 78X X X X Extracts X X X X X X X X Extracts X X X X ..... the tax at the rate applicable on Industrial Unit. " The grounds taken by the assessee are as under : " (1) The learned CIT(A) erred in confirming the disallowance of interest u/s 40A(8) of the Income-tax Act for a sum of Rs. 12,543 being interest on loan account of the directors and shareholders of the appellant. Your appellant submits that in the facts and circumstances of the case, the account maintained by the aforesaid persons are not deposit account as envisaged u/s 40A(8) of the Income-tax Act and hence nothing should be disallowed under the above proviso. It is submitted that the addition made on this score be deleted now. (2) The learned CIT(A), erred in holding that the charging of interest u/s 215 of the Act is consequentia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s regards the next ground he submitted that according to the tax on declared income there was no shortfall in the payment of advance tax. Hence no interest should be charged in view of the judgment of the Hon'ble Gujarat High Court in the case of CIT v. Bharat Machinery Hardware Mart [1981] 7 Taxman 309/[1982] 136 ITR 875. 3. The learned D.R. submitted that disallowance made out of interest paid on loan account of Directors and shareholders is perfectly valid in view of section 40A(8). This issue is clearly covered against the assessee by the decision of the Tribunal in assessee's own case for the preceding year. The facts relating to the year under consideration are identical. Therefore, the first ground of assessee's appeal deserves t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tors there is only one entry of deposit throughout the year. Such fresh deposit made only once during the year in some accounts is in addition to the opening credit balance while in few other accounts such deposit has once been made throughout the year in which there is no existing opening balance. In the account of Shri Piyushkumar O. Desai, withdrawals have been made out of old deposit by three cheques dated 5-11-1982 and 6-11-1982. The debit in various other accounts solely consists of income-tax deducted at source out of the amount of interest credited in these deposit accounts. There is a distinct difference between moneys on current accounts and moneys kept as deposits. A "current account" in common parlance refers to a "running accou ..... X X X X Extracts X X X X X X X X Extracts X X X X
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