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TMI Blog1987 (9) TMI 20X X X X Extracts X X X X X X X X Extracts X X X X ..... t the instance of the Revenue, is to answer the following question of law, namely : " Whether, on the facts and in the circumstances of the case, and on a correct interpretation of the provisions of section 40(b) of the Income-tax Act, 1961, only the net and not the gross amount of interest paid to each of the partners in the instant case shall be deducted in computing the assessee-firm's income ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed to Rs. 16,769. The assessee claimed that only the difference between these two amounts, i.e., Rs. 8,457 was required to be added in accordance with section 40(b) of the Act and not the gross amount of interest. The Income-tax Officer rejected the contention. However, the Commissioner of Income-tax (Appeals) accepted the assessee's contention and thereafter the Tribunal also upheld the assessee' ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... interest received from the firm was from another partner of the firm. However, in a case like the present, where interest was paid by the firm to a partner from whom it had received interest, this view of the Allahabad High Court does not appear to have been dissented from in any other decision. No decision taking contrary view has been cited before us. Learned counsel for the Revenue referred ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... also supported by the fact that in Sri Ram Mahadeo Prasad v. CIT [1953] 24 ITR 176 (All), the action of the Tribunal in upholding the disallowance only of the net amount, after adjusting the amount of interest paid by the same partner to the firm from the amount of interest received by him, was upheld. The decision is SriRam Mahadeo Prasad v. CIT [1979] 120 ITR 149 (All) following Sri Ram Mahadeo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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