Loan taken on deposit - tax impact

1. Yes.Company has regarded it as loan from the lady.

2. Any excess over and above loan amount or interest paid over it to bank will be treated as income of the lady.

1. If the individual is under tax audit he can claim the interest expenses as deductions while computing his profit chargeable to tax. 
2. However, interest should have actually been paid as per sec 43B in order to claim the deductions. 
3. With respect to principal portion, deductions will not be allowed under sec 80C as only housing loan repayment will be allowed as deductions. 
4. Interest will be taxable in the hands of a person who had given a loan under the head Income from Other Sources. 
Please correct me if the above solution has an alternative view.