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TMI Blog1990 (7) TMI 6X X X X Extracts X X X X X X X X Extracts X X X X ..... referred to as " the Act on the following question : " Whether the Tribunal erred in law in its direction that interest paid to the partner in his individual capacity was allowable in his individual capacity when the partner represented the Hindu undivided family in the firm?" The assessee is a partnership firm having Hindu undivided families as its partners. In the assessment year 1977-78, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted. Even if the person is not a partner of the firm but has lent the money belonging to a partner to the firm, section 40(b) would be attracted. Where, however, the person lending is not a partner, and the money lent does not belong to a partner, section 40(b) has no application. Mr. Arjun Agrawal, learned counsel for the assessee has fairly placed all the decisions at hand on the question befor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 137 ITR 593 (Mad) and T. M. N. M. Somasundara Nadar Sons v. CIT [1982] 137 ITR 815 (Mad). (c) N. T. R. Estate v. CIT [1986] 157 ITR 285 (AP). (d) CIT v. Narbharam Popatbhai and Sons [1987] 166 ITR 534 (MP) [FB]. (e) Gajanand Poonam Chand and Bros. v. CIT [1988] 174 ITR 346 (Raj). (f) CIT v. Moti Lal Ramjiwan and Co. [1989] 175 ITR 25 (Raj) (g) CIT v. Tej Cloth Weaving Factory [1989] 178 ITR 4 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ded family for loans taken from their individual separate funds stand on a stronger footing. However, in order to get the deduction, the firm has to clearly prove the source from which the loan was taken. The Assessing Officer is to take into consideration the presumptions available in general Hindu law to come to correct conclusion for applying section 40(b). We are satisfied that the Tribunal h ..... X X X X Extracts X X X X X X X X Extracts X X X X
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