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TMI Blog2005 (1) TMI 710X X X X Extracts X X X X X X X X Extracts X X X X ..... questions of law under section 256(1) of the Income-tax Act, 1961 (hereinafter referred to as "the Act") for opinion to this Court:- "1.Whether the Tribunal was legally justified in holding that the interest paid by the firm to the HUFs of the partners is to be allowed under section 40(b) of the Income-tax Act, 1961 placing reliance in the case of Ram Lal & Sons, 124 ITR157 (All.) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... id to the partners. 4. The firm had not charged interest on the loans advanced to M/s. Shiv Refiners. There was an opening balance of ₹ 54,750 in the said account. The Income-tax Officer had worked out the interest @ 15 per cent amounting to ₹ 5,213 and added it to the income of the respondent-firm. 5. Feeling aggrieved, the respondent preferred an appeal before the Commissioner of I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dual capacity in the firm. In this view of the matter, we are of the considered opinion that the Tribunal was justified in upholding the order deleting the addition of interest paid to the Hindu undivided family under section 40(b) of the Act. 8. So far the second question is concerned, we find that it has come on record in the order of the Commissioner of Income-tax (Appeals) that the loans adva ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of interest on the loan advanced to M/s. Shiv Refiners. The Tribunal was, therefore, justified in deleting the addition of interest on the loan advanced to M/s. Shiv Refiners.
9. In view of the foregoing discussion, both the questions referred to us are answered in the affirmative, i.e., in favour of the assessee and against the Revenue. There shall be no order as to costs. X X X X Extracts X X X X X X X X Extracts X X X X
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