MAHESH KUMAR SULTANIA v. INCOME TAX OFFICER
[Citation -1985-LL-1209-7]
| Citation | 1985-LL-1209-7 |
|---|---|
| Appellant Name | MAHESH KUMAR SULTANIA |
| Respondent Name | INCOME TAX OFFICER |
| Court | ITAT |
| Relevant Act | Income-tax |
| Date of Order | 09/12/1985 |
| Assessment Year | 1981-82 |
| Judgment | View Judgment |
| Keyword Tags | partner in a representative capacity • interest earned • issue in appeal • interest paid • karta |
| Bot Summary: | U. S. DHUSIA J.M.: The issue in this appeal filed by the assessee for the asst. 1981-82 arises out of an addition of Rs. 9830 on account of interest due on loan advanced by Mahesh Kumar Sultania in his personal capacity, Mahesh Kumar Sultania is the Karta of the joint family and also a partner in the representative capacity in the assessee firm. The ITO under aegis of s. 40(b) disallowed the interest and added in the income of the firm. Where an individual is a partner in a firm on behalf, or for the benefit, of any other person, interest paid by the firm to such individual or by such individual to the firm otherwise then as partner in a representative capacity, shall not be taken into account for the purposes of this clause: Since this is an explanatory provisions, the provision will be retrospective and will apply to the year in appeal as well. It is not disputed by the ITO that the interest was not on the personal loan advanced by Mahesh Kumar. If it was the interest earned by Mahesh Kumar on his individual account, interest derived on it could not be considered as liable for disallowance under aegis of s. 40(b). Accordingly, I reverse the findings of the lower authorities and direct that the interest amount of Rs. 98,30 should not be added to the income of the firm. |