https://www.taxtmi.com/caselaws?id=468809 Interest received by a partner from a firm is treated as business income under section 28(v) of the Income-tax Act, and related interest expenditure may be deductible under section 37(1) if a direct nexus with earning that income is established. The disallowance could not be sustained merely by characterising the income as exempt share of profits or by relying on precedent on a different factual matrix. Because the Assessing Officer had not verified whether drawings from one partnership firm were actually used to fund the capital contribution in another, factual examination was required and the matter was remanded for verification of nexus and consequential allowance if proved. en-us Tue, 11 Feb 2025 00:00:00 +0530 Thu, 21 May 2026 18:59:13 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=468809 Interest received by a partner from a firm is treated as business income under section 28(v) of the Income-tax Act, and related interest expenditure may be deductible under section 37(1) if a direct nexus with earning that income is established. The disallowance could not be sustained merely by characterising the income as exempt share of profits or by relying on precedent on a different factual matrix. Because the Assessing Officer had not verified whether drawings from one partnership firm were actually used to fund the capital contribution in another, factual examination was required and the matter was remanded for verification of nexus and consequential allowance if proved. Case-Laws Income Tax Tue, 11 Feb 2025 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=468809