9911796707
TMI Blog1995 (2) TMI 38X X X X Extracts X X X X X X X X Extracts X X X X ..... t of its order dated February 13, 1986, in respect of the assessment year 1982-83 under section 256(1) of the Income-tax Act, 1961 "Whether, on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal was justified in law in holding that the interest of Rs. 30,000 paid in Sarsoon Trading account to Anil Kumar Ajay Kumar, Alwar, was disallowable under section 40(b) of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... business of Anil Kumar Ajay Kumar is separate and the interest paid to them cannot be considered to be interest paid to the partners. The Appellate Assistant Commissioner came to the conclusion that it is a case of payment of interest to a partner and, therefore, the provisions of section 40(b) would be attracted. Against this order, a second appeal was preferred to the Income-tax Appellate Tribun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aid directly in respect of capital contributed or any sum received by the firm or it could indirectly be where the goods have been purchased from the partner. In both the situations, the provisions of section 40(b) could be attracted. The capital which is being contributed and on which the interest is paid does not stand on a different footing than any amount which is lying to the credit of the pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... if the same is paid on the amount which is credited in the books by way of capital or otherwise. The amount of interest which has been paid to the partner is not disputed as the said proprietary concern was owned by the partner and, therefore, any payment of interest would amount to payment of interest to the partner which is specifically disallowable under the provisions of the Act. In these ci ..... X X X X Extracts X X X X X X X X Extracts X X X X
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