https://www.taxtmi.com/caselaws?id=292474 A surviving partner who took over the business of a dissolved firm was not entitled to deduct interest paid to retiring partners on the capital paid over to them under Section 10(2)(iii) read with Section 26(2) of the Income-tax Act, 1922. The Madras HC held that, on a plain reading of the provisions, the capital standing to the credit of the retiring partners became the capital of the successor and did not assume the character of borrowed capital in the hands of the surviving partner. As the payment was not referable to borrowed funds, the interest did not qualify as a deductible business expense. en-us Mon, 30 Apr 1934 00:00:00 +0530 Fri, 25 Dec 2020 10:36:46 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=292474 A surviving partner who took over the business of a dissolved firm was not entitled to deduct interest paid to retiring partners on the capital paid over to them under Section 10(2)(iii) read with Section 26(2) of the Income-tax Act, 1922. The Madras HC held that, on a plain reading of the provisions, the capital standing to the credit of the retiring partners became the capital of the successor and did not assume the character of borrowed capital in the hands of the surviving partner. As the payment was not referable to borrowed funds, the interest did not qualify as a deductible business expense. Case-Laws Income Tax Mon, 30 Apr 1934 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=292474