Meaning of ” Lent”

Case Name : CIT/CWT vs. Polisetty somasundaram charities

Citation : [1990] 183 ITR 377 (AP)

Court : Andhra Pradesh High Court

Section : 13

Meaning : The words ‘lend’ and ‘invest’ bear a distinct interpretation in the context of the set up and synonymity is ruled out. In commercial parlance, lending is asso-ciated with advancing money for an agreed rate of interest returnable within a specified period or on demand. Though the expression ‘invest’ in a broad sweep takes in lending also, it can be considered as confined to laying out the amount in a venture or institution with a profit motive and with no promise of assured return. In the process of investment, an element of risk is involved and the expectation or return of profit is not assured and the depletion of capital itself is not an abnormal feature. In the case of lending, the return by way of interest is generally assured and the element of risk is minimal. In commercial parlance, the lending is associated with advancing the money for an agreed rate of interest returnable within a specified period or on demand. Though the expression ‘invest’ in a broad sweep takes in lending also but it should be considered as confined to laying out the amount in a venture or institution with profit motive and with no promise of assured return. It is not feasible to survey the multifarious modes of investment and it is sufficient to indicate prominent modes to convey the width of the expression ‘invest’. The investment involves laying the amount in partnership firm, shares in the joint stock company, real estate business and such other concerns or business.