FAR 91.215 states that a mode C transponder is required for...
all aircraft in all airspace above the ceiling and within the lateral boundaries of a Class B or Class C airspace area designated for an airport upward to 10,000 feet MSL
My flight instructor and I disagree on how this regulation is interpreted. He says that I need a transponder to fly underneath class C. I understand it to mean that I only need and transponder if I am both above and within the lateral boundaries (i.e. overflying the airspace).
Which is the correct interpretation?