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TMI Blog1991 (2) TMI 172X X X X Extracts X X X X X X X X Extracts X X X X ..... he three years relevant to these assessments. These payments were disallowed by the Assessing Officer under section 40(b). In appeal, the Commissioner (Appeals) upheld the action relying on the decision of the Karnataka High Court in the case of N.M. Anniah Co. v. CIT [1975] 101 ITR 348, the decision of the Delhi High Court in the case of K.C. Raj Co. v. CIT [1980] 121 ITR 911 and the decision of the Madras High Court in the case of Dwarkadas Rameshwar Goenka v. CIT [1981] 127 ITR 397. The assessee is on further appeal to the Tribunal challenging the view taken by the Commissioner (Appeals). 3. Facts are absolutely clear. Manilal Mulji was a partner representing his HUF. The amounts advanced to the firm were his individual funds and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hibition contained in section 40(b) to the assessments after 1-4-1985. The High Court of Rajasthan, Madhya Pradesh and Andhra Pradesh have held that section 40(b), even without the aid of Explanation 2, would give the same meaning and the Explanation 2 is merely clarificatory of the existing law, and not a new enacting provision. 5. There were differences in the judicial thinking and the Karnataka High Court had, in the cases referred to above, interpreted section 40(b) to mean that the bar contained therein is attracted to a case where a partner has dual capacities, one as an individual and another as representative of a different assessable entity. The High Courts of Bombay and Full Bench of the Gujarat High Court had taken opposite vi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n of Explanations 1 and 2, no one can attribute a different meaning in the absence of a decision of the Supreme Court so far as Karnataka is concerned. Normally an Explanation only explains the meaning of the provision to clear up any ambiguity, if any. But there may be Explanations which would explain or whittle down the scope of the main provision. The real question is how the enacting part in clause (b) of section 40, as it stood prior to the introduction of Explanations, is required to be construed. If that is the question, the Bangalore Bench of the Tribunal is bound by the decisions of the Karnataka High Court rendered in the cases of N.M. Anniah Co., Khoday Eswarsa Sons and Shri Ramanjaneya Textiles and we cannot construe the pro ..... X X X X Extracts X X X X X X X X Extracts X X X X
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