https://www.taxtmi.com/caselaws?id=24314 Interest paid by a firm to a partner is not disallowable under section 40(b) where the partner was admitted in a representative capacity, but the money was advanced by him in his individual capacity. The controlling principle is that the disallowance rule applies to payments made to the partner in the capacity in which he represents the firm, and not to a separate personal loan transaction. On those facts, the interest payment was held outside section 40(b) and therefore allowable in the firm's computation. en-us Thu, 02 Mar 1989 00:00:00 +0530 Tue, 19 Jan 2010 11:44:13 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=24314 Interest paid by a firm to a partner is not disallowable under section 40(b) where the partner was admitted in a representative capacity, but the money was advanced by him in his individual capacity. The controlling principle is that the disallowance rule applies to payments made to the partner in the capacity in which he represents the firm, and not to a separate personal loan transaction. On those facts, the interest payment was held outside section 40(b) and therefore allowable in the firm's computation. Case-Laws Income Tax Thu, 02 Mar 1989 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=24314