INCOME TAX OFFICER v. ACHHARU MAI BASANTA MAL
[Citation -1985-LL-1230-3]

Citation 1985-LL-1230-3
Appellant Name INCOME TAX OFFICER
Respondent Name ACHHARU MAI BASANTA MAL
Court ITAT
Relevant Act Income-tax
Date of Order 30/12/1985
Assessment Year 1981-82
Judgment View Judgment
Keyword Tags representative capacity • interest payment
Bot Summary: F. C. RUSTAGI, J. M.: These two cross matters, appeal by the Revenue and the cross objection by the assessee, were heard together and are disposed of by this consolidated order for the sake of convenience. In the Revenue's appeal, the action of the AAC in allowing interest payment to Shri Nawal Kishor in the capacity of individual' and having held that t h e same is not hit by the provisions of s. 40 of the IT Act. In this case, it is the HUF in a representative capacity, of which Nawal kishore was the partner. He was fair enough to admit that this issue has been dealt with at length by the Andhara Pradesh High Court in the case of N. T. R. Estate vs. CIT 49 CTR, in which Explanation added to s. 40 which was effective for the asst. We have extracted the relevant observations in our order of even date in ITR. No. 732/Chandi/83in the case of ITO vs. M/s Kanahaya Lal Rameshwar Dass Co. Patiala. In the light of the same, we should not hesitate to review even our earlier view and confirm the action of the AAC in this case, though for different reasons, i.e. on the basis of Explanation, since Nawal Kishore was partner in the representative capacity of his HUF and the account on which the interest was paid was 'individual', no addition under s. 40 was warranted and it was rightly deleted by the AAC. In the cross objection, the assessee has only supported the order of the AAC, since the Revenue fails in its appeal, C. O. becomes infructuous and the same as such in dismissed. In the result, both the appeal of the Revenue and the C. O. of the assessee are dismissed.


F. C. RUSTAGI, J. M.: These two cross matters, appeal by Revenue and cross objection by assessee, were heard together and are disposed of by this consolidated order for sake of convenience. In Revenue's appeal, action of AAC in allowing interest payment to Shri Nawal Kishor in capacity of individual' and having held that t h e same is not hit by provisions of s. 40 (b) of IT Act. 1961, is challenged. In this case, it is HUF in representative capacity, of which Nawal kishore was partner. Here also, earlier decisions of Tribunal were relied upon and certain alleged inconsistencies were pointed out by ld. Departmental Representative. However, he was fair enough to admit that this issue has been dealt with at length by Andhara Pradesh High Court in case of N. T. R. Estate vs. CIT (1985) 49 CTR (AP-85), in which Explanation added to s. 40 (b) which was effective for asst. yr. 1985-86, have been held to be procedural and retrospective in nature by their Lordships. We have extracted relevant observations in our order of even date in ITR. No. 732/Chandi/83 (asst. yr. 1982-83)in case of ITO vs. M/s Kanahaya Lal Rameshwar Dass & Co. Patiala. In light of same, we should not hesitate to review even our earlier view and confirm action of AAC in this case, though for different reasons, i.e. on basis of Explanation, since Nawal Kishore was partner in representative capacity of his HUF and account on which interest was paid was 'individual', no addition under s. 40 (b) was warranted and it was rightly deleted by AAC. In cross objection, assessee has only supported order of AAC, since Revenue fails in its appeal, C. O. becomes infructuous and same as such in dismissed. In result, both appeal of Revenue and C. O. of assessee are dismissed. *** INCOME TAX OFFICER v. ACHHARU MAI BASANTA MAL
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