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TMI Blog1980 (2) TMI 109X X X X Extracts X X X X X X X X Extracts X X X X ..... e appeals are consolidated and disposed of by this common order. 2. The assessee has raised the following common grounds of appellant. (i)... The CIT (A) has erred in holding the view that s. 154 was rightly invoked on the facts of the case when disallowance of interest paid to Sri Madhusudan Agarwalla in different capacity than the capacity in which he was a partner as a debatable point. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... considering the objections raised by the assessee, rectified the mistake under s. 154 of the Act and added the interest paid to-Sri Madhusudan Agarwalla in respect of his individual loans. 3. Aggrieved by these orders the assessee filed appeals to the CIT (A) and contended that the ITO was not justified in adding back the interest under s. 154 of the Act who confirmed the orders of the ITO. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s the interest on the capital of HUF was separately. As the credited to the account of the HUF, and not in account of Verraiah as a partner of the firm, s. 40(b) has no application and the orders of the Appl. Tribunal in so far as upholding the disallowance of interest under s. 40(b) is not correct. The Allahabad High Court in Madho Prasad, Pilibhit vs. CIT (2) had held that where the Karta of an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a partner has to be disallowed. The rectification order was set aside by the AAC which was confirmed by the Appl. Tribunal. The High Court held that the order of the App. Tribunal was in conformity with law. 5. We have given our dispassionate and objective consideration to the submissions of the representatives of the rival parties and the judicial principle as enunciated by the aforesaid High ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Naraindas (3) Karnataka High Court in CIT vs. Moolchand where the said high Court held that Tribunal was right in the view that there was no referable question of law as s. 154 could not be invoked where conceivably there could be more than one view and, according to one view, deduction of interest paid to the HUF of which the partner is the Karta, is allowable. In short, this is not a mista ..... X X X X Extracts X X X X X X X X Extracts X X X X
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