https://www.taxtmi.com/caselaws?id=25607 Interest paid by a firm to partners on capital contributed by them is not deductible while computing capital gains under section 48(ii) of the Income-tax Act, 1961. The statutory deduction under capital gains computation is confined to cost of acquisition, cost of improvement, and expenditure incurred wholly and exclusively in connection with the transfer. Interest payable to partners under the Partnership Act, 1932, even if linked to capital used to acquire the asset and paid out of profits, does not form part of the cost of acquiring the capital asset. The deduction was therefore disallowed. en-us Thu, 11 Sep 1986 00:00:00 +0530 Fri, 29 Jan 2010 16:55:58 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=25607 Interest paid by a firm to partners on capital contributed by them is not deductible while computing capital gains under section 48(ii) of the Income-tax Act, 1961. The statutory deduction under capital gains computation is confined to cost of acquisition, cost of improvement, and expenditure incurred wholly and exclusively in connection with the transfer. Interest payable to partners under the Partnership Act, 1932, even if linked to capital used to acquire the asset and paid out of profits, does not form part of the cost of acquiring the capital asset. The deduction was therefore disallowed. Case-Laws Income Tax Thu, 11 Sep 1986 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=25607