whether in a case where a firm has received as well as paid interest to a partner, it is the gross interest paid by the firm to the partner or the net interest (i.e. the gross interest paid by the firm to the partner minus the interest paid by the partner to the firm) will be added back under the provisions of section 40(b) of the Income-tax Act, 1961, in computing the income of the firm.

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... DT Dated:- 25-9-1975 Order-Instruction - Circulars - Income Tax - INSTRUCTION NO. 882/CBDT Dated : September 25, 1975 Section(s) Referred: 40(b) Statute: Income - Tax Act, 1961 A reference is invited to Board's Circular No. 33-D (XXV-24) of 1965 (F.No. 9/55/64-ITA-I dated 8-11-1965) by which Board's Circular No. 55 of 1941 on the above subject was modified. 2. The Board had .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... o the partner will have to be added back to the Income of the firm. The earlier clarification issued in the circular referred to above, to the effect that where the firm pays interest as well as receives interest from the same partner, only the net interest can be said to have been received or paid by the firm and only such net interest should be taken into consideration, is not in accordance with .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X