1987 (4) TMI 33 - HC - Income Tax

Summary

The High Court of Madhya Pradesh addressed a question regarding the deduction of interest paid to a partner of a firm. The Tribunal allowed the claim for interest, but the matter was referred to a Full Bench due to differing opinions among High Courts. The Full Bench held that interest paid to a partner in a representative capacity is not liable to be added back under section 40(b) of the Income-tax Act. The case was certified to involve a substantial question of law for the Supreme Court to decide.