https://www.taxtmi.com/caselaws?id=26800 The court upheld the disallowance of interest paid by a firm to Hindu undivided families of partners under section 40(b) of the Income-tax Act, 1961. The judgment emphasized that the transfer of capital to family accounts to evade provisions was not permissible, and interest payments to such accounts were subject to disallowance, irrespective of the partners' capacity within the firm. The court clarified that the Board's Circular regarding interest payments to Hindu undivided families applied only to loans, not capital contributions, affirming the Income-tax Officer's decision to disallow the interest. en-us Mon, 17 Dec 1984 00:00:00 +0530 Mon, 08 Feb 2010 15:27:13 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=26800 The court upheld the disallowance of interest paid by a firm to Hindu undivided families of partners under section 40(b) of the Income-tax Act, 1961. The judgment emphasized that the transfer of capital to family accounts to evade provisions was not permissible, and interest payments to such accounts were subject to disallowance, irrespective of the partners' capacity within the firm. The court clarified that the Board's Circular regarding interest payments to Hindu undivided families applied only to loans, not capital contributions, affirming the Income-tax Officer's decision to disallow the interest. Case-Laws Income Tax Mon, 17 Dec 1984 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=26800