whether in a case where a firm has received as well as paid interest to a partner, it is the gross interest paid by the firm to the partner or the net interest (i.e. the gross interest paid by the firm to the partner minus the interest paid by the partner to the firm) will be added back under the provisions of section 40(b) of the Income-tax Act, 1961, in computing the income of the firm. https://www.taxtmi.com/circulars?id=10371 The statutory prohibition in section 40(b) against deducting interest paid by a firm to a partner requires adding back the gross amount of interest paid; no statutory basis exists to adjust or net interest received from the partner, so netting is not permitted. The Board's revised instruction supersedes earlier guidance permitting netting and applies to pending assessments. en-us Thu, 25 Sep 1975 00:00:00 +0530 Fri, 17 Jun 2011 18:47:00 +0530 TaxTMI RSS Generator whether in a case where a firm has received as well as paid interest to a partner, it is the gross interest paid by the firm to the partner or the net interest (i.e. the gross interest paid by the firm to the partner minus the interest paid by the partner to the firm) will be added back under the provisions of section 40(b) of the Income-tax Act, 1961, in computing the income of the firm. https://www.taxtmi.com/circulars?id=10371 The statutory prohibition in section 40(b) against deducting interest paid by a firm to a partner requires adding back the gross amount of interest paid; no statutory basis exists to adjust or net interest received from the partner, so netting is not permitted. The Board's revised instruction supersedes earlier guidance permitting netting and applies to pending assessments. Circulars Income Tax Thu, 25 Sep 1975 00:00:00 +0530 https://www.taxtmi.com/circulars?id=10371