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TMI Blog1994 (4) TMI 7X X X X Extracts X X X X X X X X Extracts X X X X ..... . L. BHAT C. J. --- The following question of law has been referred to this court under section 256(1) of the Income-tax Act, 1961, by the Income-tax Appellate Tribunal, Jabalpur Bench, at the instance of the assessee : " Whether, on the facts and in the circumstances of the case, the Tribunal was correct in applying section 40(b) to the interest paid to the kartas of the three Hindu undivided fa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icer held that the father's capital was inherited by the three sons in their individual capacities. He rejected the alleged partition set up by the three sons and held that the payment of interest was made to the three sons in their individual capacity and, therefore, the amount of interest is not liable to be deducted from the income of the firm under section 40(b) of the Act. The appellate auth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... interest on his personal deposit. It was held that the interest was not liable to be added to the income. Our attention is invited to the Explanations to section 40(b) of the Act with effect from April 1, 1985. The Full Bench, considering the Explanations held them to be clarificatory of the law and not mandatory of the law. We are bound by the above decision which with great respect appears to b ..... X X X X Extracts X X X X X X X X Extracts X X X X
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