1990 (1) TMI 141

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....e of interest paid to the partner Sri S. Venkatachalam, who represented the HUF of which he was the karta. Interest was paid on funds belonging to the HUF. According to the ITO, it was hit by the provisions of Sec. 40(b). The AAC agreed with the ITO. 2. The submission of the assessee in effect was that the disallowance was not warranted. The assessee has not entered personal appearance and has ....

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.... that the sum of Rs. 11,407 and Rs. 15,529 being interest paid by the assessees to Shri N.L.R. Lakshmanan, partner, cannot be added back under section 40(b) of the Act, for the assessment years 1973-74 and 1974-75 ? 2. Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that the provisions of Section 147(b) cannot be validly invoked ? " The Madra....

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....ditor of the assessee-firm was not interest paid to the karta of the HUF, who was a partner in the firm in his capacity as the karta, and was, therefore, not liable to be disallowed under section 40(b) of the Income-tax Act 1961 ('the Act') as seen from CIT v. Sajjanraj Divanchand. Having regard to the above circumstances this Court will not be justified in directing a reference on question No. 1.....

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....t, 1984 from 1-4-1985, which have been considered to be applicable to earlier years also because they only explained the provision of law as it always stood. These decisions were arrived at having regard to the intention conveyed by certain Circulars of the Board reproduced in 149 ITR St. 127 as also the interpretation placed by several High Courts on the scope of the Explanation (See CIT v. Narbh....