https://www.taxtmi.com/caselaws?id=71089 Explanation 2 to section 40(b), inserted by the Taxation Laws (Amendment) Act, 1984, was treated as retrospective because it was explanatory in nature. On that footing, interest paid by a firm to an individual partner in his personal capacity was outside the disallowance under section 40(b) where the partner was admitted only in a representative capacity and the payment did not arise from that representative relationship. The interest on the personal loan therefore could not be disallowed as a partner-related payment, and it was not includible in the firm's income. en-us Mon, 09 Dec 1985 00:00:00 +0530 Thu, 21 Apr 2011 12:19:05 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=71089 Explanation 2 to section 40(b), inserted by the Taxation Laws (Amendment) Act, 1984, was treated as retrospective because it was explanatory in nature. On that footing, interest paid by a firm to an individual partner in his personal capacity was outside the disallowance under section 40(b) where the partner was admitted only in a representative capacity and the payment did not arise from that representative relationship. The interest on the personal loan therefore could not be disallowed as a partner-related payment, and it was not includible in the firm's income. Case-Laws Income Tax Mon, 09 Dec 1985 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=71089