https://www.taxtmi.com/caselaws?id=61337 Interest paid to a partner must be tested by the capacity in which the partner represents the firm and by the nature of the account to which the payment is credited. The Explanation to section 40(b) was treated as a procedural amendment and therefore retrospective from assessment year 1985-86. On the stated facts, the partner represented a Hindu undivided family in the firm, while the interest related to an individual account, so disallowance under section 40(b) was not required and the appellate deletion was upheld in favour of the assessee. en-us Mon, 30 Dec 1985 00:00:00 +0530 Wed, 12 Jan 2011 12:37:03 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=61337 Interest paid to a partner must be tested by the capacity in which the partner represents the firm and by the nature of the account to which the payment is credited. The Explanation to section 40(b) was treated as a procedural amendment and therefore retrospective from assessment year 1985-86. On the stated facts, the partner represented a Hindu undivided family in the firm, while the interest related to an individual account, so disallowance under section 40(b) was not required and the appellate deletion was upheld in favour of the assessee. Case-Laws Income Tax Mon, 30 Dec 1985 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=61337