9911796707
TMI Blog1990 (2) TMI 27X X X X Extracts X X X X X X X X Extracts X X X X ..... referred to as "the Act"), the Income-tax Appellate Tribunal, "B" Bench, Patna, has referred the following question to this court for its opinion : "Whether, on the facts and in the circumstances of the case, the assessee is entitled to get adjustment of the interest received from the firm out of the interest paid to the firm and the net amount of interest only is to be added back under the prov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be included in the income of the firm. Aggrieved by the order passed by the Income-tax Officer, the assessee preferred an appeal before the Appellate Assistant Commissioner. That appeal was dismissed. On further appeal before the Tribunal, the Tribunal upheld the contention urged on behalf of the assessee that only the net interest should be taken into consideration. In this view of the matter, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2 (Mad). The contention deserves to be upheld. Under the provisions of section 40(b) of the Act, any payment of interest made by a firm to any partner cannot be deducted in computing the income of the firm chargeable to tax. The claim of the assessee-firm that two of its partners had independent account with the firm and that as the firm had received interest from these partners, that amount of in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... back under the provisions of section 40(b) of the Act in computing the total income of the firm. The reference is answered accordingly in favour of the Revenue and against the assessee. As none has appeared on behalf of the assessee, the parties shall bear their own costs of this reference. Let a copy of this judgment be forwarded by the office of this court to the Assistant Registrar, Income-t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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