R. L. SANGANI, J. M.: This appeal by assessee relates to asst. yr. 1980-81. assessee is company carrying on business of manufacturing Trailer Tract parts of Tractors. assessee paid Rs. 1,20,761 to M/s Larsen & Toubro Ltd. which was holding company in relation to assessee-company. On 12th Feb., 1971 Board of Directors of Larsen & Toubro Ltd. passed resolution in which it was observed that said company had substantial interest in assessee s company. It was resolved that three Directors of M/s Larsen & Toubro Ltd., vis. Mr. H. Holck-Larsen Mr. N. M. Desai and Mr. Gunnar Hansen would serve as members of committee as Directors of assessee-company and that remuneration payable to them exclusive of sitting fees as members of committee would be held by them in trust for company (L&T) and shall be made over by, them to said company. Those three Directors acted as trustees of M/s. Larsen & Toubro Ltd., and received Rs. 1,20,761 as commission from assessee-company in capacity of such trustees. In fact, cheque for that amount had been give direct to M/s. Larsen & Toubro Ltd., by assessee-company. stand of assessee throughout this proceeding is that said amount has been paid by assessee-company t o M/s Larsen & Toubro Ltd., who admittedly came in category of "person who has substantial interest in company", as defined in s. 2 (32) of IT Act, 1961. ITO held that provisions of s. 40 (c), which are as under: "40 Notwithstanding to contrary in s. 30 to 39, following amount shall not be deducted in computing income chargeable under head profits and gains) of business or profession." xxx xxx xxx (c) in case of any company (ii) expenditure which results directly or indirectly in provision of remuneration or benefit or amenity to director or to Person who has substantial interest in company or to relative of director or such other person, as case may be. would apply. He applied limit of Rs. 72,000 for allowance under said provision and disallowed balance of Rs. 48,761. Against said order, assessee filed appeal before CIT(A). CIT(A) held that M/s. Larsen & Toubro Ltd., came within category of "person who has substantial interest in company" and as such, provisions of s. 40 (c)(i) were applicable. He, accordingly, confirmed disallowance under said provision made by ITO. assessee has now come in appeal before us against confirmation of said disallowance. Contention of assessee before us is that words "person who has substantial interest in company" in s. 40 (c) (i) refers to living person and not to incorporated company. This, according to assessee is because of facts that in last part of cl. (i) of s. 40 (c), there is reference to "relative of such person". According to assessee, only living person could have relative; company could not have relative. According to assessee, company was excluded from category of "person who has substantial interest in company" in s. 40 (c) (i) of Act. According to assessee, no disallowance could be made under said provision. ld. Departmental Representative has relied on definition given in s. 2(32) of Act and contended that company would be included in expression "person who has substantial interest in company." We have considered rival submission. We find that expression "person who has substantial interest in company" has been specifically defined in s. 2 (32) of Act. According to that definition, such person in relation to company means "persons" who is beneficial owner of shares carrying not less them twenty per cent of voting power. word "persons" underlined above has been defined in s. 2 (31) of Act as including (i) individual (ii) HUF (iii) company, (iv) firm, (v) AOP or BIO and (vi) local authority and every artificial judicial person not falling within any of preceding sub-clauses. When we read definition of person in s. 2 (31) in conjunction with definition of expression "person who has substantial interest in company" in s. 2 (32), there is no doubt that company is included in latter expression. context does not require that said definition in s. 2 (32) r/w s. 2(31) should not be applied whole construing said expression as occurring in s. 40 (c) (i) of Act. expression "relative of such person" in s. 40 (c)(i) on which emphasis is laid on behalf of assessee, has been used with view to extend operation of provision regarding disallowance pertaining to expenditure resulting in provision of remuneration, benefit or amenity to relatives of living person who has substantial interest in company and not for restricting expression "person having substantial interest in company" to living individuals only by excluding company, firm, HUF, AOP, Local Body, etc. M/s. Larsen & Toubro Ltd. is holding company in relation to assessee-company and as such, it comes in category of "person who has substantial interest in company" (assessee- company) with result that provisions of s. 40 (c)(i) would be applicable. We, therefore, reject submission of assessee on this point. Before parting with this matter, we may point out that ld. Representative of assessee had referred to order of D Bench of Tribunal at Bombay dt. 24th Sept., 1980 in ITA No. 1143/Bom/1979. Perusal of said decision indicates that said Bench of Tribunal had differed from t h e view taken by another Bench of Tribunal in ITA Nos. 53-54 & 55/Bom/1977-78 in case of M/s. Filtrona India Ltd. decided on 7th April, 1978. Thus, it is obvious that there is difference of opinion amongst two Benches of Tribunal We have already given our reasons for view which we have taken. We do not find it necessary to discuss further decision in ITA No. 1143/Bom/79. We may mention that in that case reference was made to another decision of Tribunal in ITA No. 73/Bom/75-76 where in it had been held that commission paid on account of sole selling agency would not attract provisions of s. 40 (c). Tribunal in that case followed said decision and not on that basis also it was held that s. 40(c) was not applicable. Besides, Tribunal further observed that since amount paid was not excessive, s. 40 (c)(i) would not apply. Thus provisions of 40 (c) (i) were held to be not applicable on account of several reasons and not solely on ground that company did not come in category of "person who has substantial interest in company". view expression on this aspect must be regarded as obliter. In any case we have give our reasons and for those reasons, we hold that disallowance under s. 40 (c) (i) was justified. issue which we have discussed was subject matter to ground No. 3 in memo of appeal. Grounds on and two were not pressed by ld representative of assessee at time of hearing of this appeal before us. In result, appeal fails and is dismissed. *** TRACTOR ENGINEERS LIMITED v. INCOME TAX OFFICER