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11. The section does not clearly define what a 'deposit' for the purpose of Section 40A(8) is. There is, however, definition of this expression in Clause (b) of the Explanation reproduced above. According to this 'deposit' means a deposit of money with a company. When a 'deposit' is defined as a deposit, it virtually means that the statute takes it for granted that the meaning of the expression 'deposit' is clear. It must have the general or any other acceptable meaning. There could, however, be deposits of various types and deposits of various things. The Explanation would appear to serve only to indicate certain purposes instead of giving a general definition of the expression 'deposit'. The first is that it clarifies that a deposit means only deposit of money with a company. It also acts as an inclusive definition including 'any money borrowed by' a company and also excluding the amounts received by the company in the nine types of amounts dealt with in the Explanation. These exclusions follow a pattern and cover (7) amounts received from the Government, (2) loans from banking company, co-operative society, specified institutions, etc., (3) from other companies, employees, etc., and (4) by way of security from agents, subscription, mortgage, etc. A clear reading, therefore, of the Explanation would indicate that from the normally well understood meaning of the word 'deposit' one has to concentrate on deposit of money with a company. To this must be added money borrowed by the company and from this must be taken away the specified amounts mentioned in sub-clauses (i) to (ix). An inclusive definition generally includes in an expression what it does not normally connote. When, therefore, the expression 'deposit' is stated to 'include' any money borrowed by the company prima facie it would appear that the word 'deposit' is understood not to include borrowings. By a legal fiction, borrowings by a company are, thus, sought or understood to be included. The Explanation, thus, makes clear two things : by a fiction it includes money borrowed meaning thereby that 'deposit' would only mean amounts kept on deposit voluntarily by the outsider and not amounts the company seeks from the outsider by way of borrowings ; secondly, the word should cover items like amounts received from the Government, loans from the banks or other companies, from employees by way of security, etc. The one characteristic common to these items numbering 9 is that they represent a one time receipt, e.g., a 'loan' means a single receipt ; a security deposit would be a single receipt ; a subscription or an amount received from a company would also be a single receipt. By excluding, therefore, only items of single receipts it would appear that 'deposit' as understood should normally "relate to only single receipts. If there are a series of receipts or out of an amount received or borrowed adjustments are made, withdrawals are done leaving a balance, etc., the balance may not constitute a deposit for the purpose of the section. This fact, in our view, is of importance while considering the question whether a current account with a balance would constitute a deposit-an important argument urged by the learned counsels for the assessees.

7. While borrowing is included in the definition, sub-clauses (iii) and (iv) show that a loan would also be a deposit. Sub-clause (v) shows that but for the exclusion any money received by the company from any other company would also be treated as a deposit. Sub-clauses (vi) and (vii) show that but for the exclusion, even a security deposit received from an employee or security or advance received from an agent or any advance against orders for supply of goods or for rendering of service would be a deposit under the section for disallowance of interest vide Sub-clause (viii). It is clear that but for the exclusion, subscription paid for any shares, stock, bond or debenture pending allotment would be a deposit under the section.

24. Section 40A(8) was, however, not amended to exempt deposits by directors from the definition in the Act. The conclusion is inescapable that under the Act, deposits by directors continued to be included in the definition of deposits for disallowance of interest, though under the deposit rules, they did not amount to deposit for calculating the limits of borrowing. The failure to amend the definition in Section 40A(8) appears to have been a conscious decision.

25. The difference between a loan and a deposit under the Limitation Act is purely for the purpose of limitation and rulings under that Act cannot be of assistance to decide the point at issue.