https://www.taxtmi.com/caselaws?id=29489 The High Court of Madras ruled in favor of the assessee-firm, overturning the disallowance of interest payments made to a partner under section 40(b) of the Income Tax Act, 1961. The court found that since the interest was paid to the joint family and not directly to the partner, the disallowance was not justified. The court rejected the argument that the account related to a Hindu Undivided Family (HUF) was not clear, noting that the department itself treated the interest as HUF income in a previous order. As a result, the disallowance under section 40(b) for the assessment years 1971-72 and 1972-73 was deemed incorrect. en-us Wed, 29 Jul 1981 00:00:00 +0530 Sat, 13 Mar 2010 12:41:57 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=29489 The High Court of Madras ruled in favor of the assessee-firm, overturning the disallowance of interest payments made to a partner under section 40(b) of the Income Tax Act, 1961. The court found that since the interest was paid to the joint family and not directly to the partner, the disallowance was not justified. The court rejected the argument that the account related to a Hindu Undivided Family (HUF) was not clear, noting that the department itself treated the interest as HUF income in a previous order. As a result, the disallowance under section 40(b) for the assessment years 1971-72 and 1972-73 was deemed incorrect. Case-Laws Income Tax Wed, 29 Jul 1981 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=29489